Taking a Vertical View
What does it take to tackle a niche market? Ken has some advice before jumping in.
- By Ken Thoreson
- June 01, 2008
The first thing most people ask when considering whether to focus on vertical or niche markets is, of course, what are the benefits? Plenty, in Acumen's experience. They include:
- Higher revenues
- Better margins
- Lower cost of sales
- Increased velocity of order flow
- Bigger average order size
If those advantages are enough to convince you that it's time to "think narrow," you may want to start by visiting the Microsoft Partner Vertical Resource Center (within the Partner Portal), which offers a variety of tools and resources for going vertical.
Next, select your target verticals. Create a positioning statement determining what they offer you and what you can bring to them. Then take the following steps to learn about -- and begin moving into -- them:
Create a market profile: List the top five characteristics for the ideal client in each vertical industry or niche market. Undertake basic market research to identify the gross number of clients in the market -- and, more importantly, the number that match the ideal characteristics that you've established.
Identify initial sales targets: Using the market profile, pinpoint the top 150 prospects in each vertical. For example, you might identify all companies with annual revenues of $10 million or more, or that have at least 100 employees, or that have three or more locations, or that serve at least five states (or any other criteria that you consider important). Begin building a database with information on these prospects.
Identify key industry groups: Locate the top local and national industry associations for each vertical. Develop lists of key industry trade shows, relevant monthly meetings and the names of current and past association leaders. Shoot to attend every trade show and at least half the monthly gatherings. Increase your visibility by becoming active on an association committee.
Identify key industry publications: Industry magazines and newsletters can keep you abreast of major issues facing your vertical-market clients and prospects. So subscribe to and read these vehicles -- and try to write for them as well. Obtain their editorial calendars (often available online) and offer to contribute articles or columns that fit in with their coverage and showcase your expertise.
Identify key industry influencers: Find the top consultants, lawyers, accountants and others who service and market to your target industries. Work with them to share contacts and create joint referral networks. Touch base with these sources at least quarterly.
Not sure which groups, publications and influencers carry the most weight in a specific market? Ask your clients and prospects -- and follow their advice.
Identify potentially useful vendors: Make contact with at least five companies that sell related, but non-competing, goods or services to your chosen vertical market. You can find such businesses at trade shows and through ads in industry publications. You may wish to explore developing joint marketing programs-or you may just work out a lead-sharing agreement.
Identify key contacts: Develop a detailed database for each vertical-industry prospect, customer and influencer organization. Include at least five names and titles for each organization, pinpointing a main contact at each.
Develop training and certification programs: To succeed in a vertical market requires your team to stay current on all that industry's issues. Develop ongoing programs to train employees in industry-specific sales skills and, if necessary, certify their knowledge about particular technologies, products or services.
Modify, monitor, measure: Moving into any vertical market will probably involve facing established competitors. That means it's especially important to refine and track the effectiveness of all sales plans, marketing materials, initiatives and events -- and to monitor customer satisfaction as thoroughly as possible.
Ultimately, the secret of succeeding in any vertical market is knowing as much as you can about the industry: its issues, its companies and, most of all, its people.
Ken Thoreson is managing director of the Acumen Management Group Ltd., a North American consulting organization focused on improving sales management functions within growing and transitional organizations. You can reach him at [email protected].