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The Move to Vertical Marketing

In most of the discussions about changing partner business models, the concept of verticalization is front and center. But fear of limiting the market to serve a smaller pool of prospects keeps most partners from taking the full plunge into specialization. And while it may seem illogical to find more customers by marketing to fewer prospects, it's working for a growing number of partners.

'A Mile Wide and an Inch Deep'
When Greg Lemon, partner at Kraft Enterprise Systems, a Gold Dynamics ERP partner, first received the Microsoft "go vertical" message four years ago, he took it to heart. "We fell into the category of VAR that is a mile wide and an inch deep," Lemon said.

As with most partners, the challenges faced during the recession caused Kraft to reexamine its approach to the market. Microsoft made a strong case for the success of partners who were proving their value to a defined market through industry specialization.

"While the majority of our clients fell into the service, distribution and manufacturing buckets, we found ourselves chasing ancillary deals in industries where we weren't really competitive," Lemon noted. "We knew that we needed a mindset change to transform our marketing to reach our target buyer."

The Value of Industry Expertise
Lemon hired a marketing firm to help with strategy and execution and an editor to build content for an inbound marketing approach. The results of the effort were disappointing.

"What I learned was that it was difficult to work with someone that didn't understand my business. There wasn't a central vision and no one really owned the marketing strategy," Lemon said. "Execution was arduous."

During a Microsoft partner roadshow, Lemon was impressed with the vision of Reed Overfelt, CEO of Full Quota, a marketing services firm focused on technology companies. An ex-Microsoft general manager, Overfelt and his team worked with Kraft to clearly identify a target market and tactical marketing approach.

With a Web site focused on service and project-based companies in the region, Kraft launched a targeted campaign managed by Full Quota. In the first month after launch, 1,100 visitors made their way to Kraft's Web site -- 50 times the company's historic average of 20 to 25 visitors per month.

Consistent Execution
Consistency is the key to marketing results. Most partners are challenged to make the regular commitment to marketing. When times are good and everyone is busy, there is no time to worry about marketing. When the billable hours backlog starts to erode, panic sets in to get marketing back on track. 

With content support from Full Quota and execution managed through Hubspot software, Kraft established a consistent marketing program that requires a regular but manageable time commitment. 

Kraft is already seeing results. "Be careful what you ask for," Lemon warned. "We have an activity increase that we have to manage. And we already have a large opportunity in the works that will need to be implemented before the end of the year."

Invest Wisely
For most partners, adequate investment in marketing requires a significant mind shift. "Partners should spend 3 to 5, even 7 percent of revenue on marketing," Lemon said. "You have to invest wisely. Spend money purposefully, investing in people who know your buyer and have a proven track record of execution.

"As Microsoft says, gain a vertical presence and be good at what you do. Bring repeatable value to the market. Use that same logic when you look to spend on marketing. Spend money with someone who knows your business." 

Vertical Approach
The changing business models that partners face require a new approach to marketing. More partners are heeding Microsoft's call to go vertical and focusing on their strengths. Instead of limiting their prospects, partners are finding the vertical approach accelerates results.       

Have you found success with vertical marketing? Add a comment below or send me an e-mail and let's share the knowledge.

Posted by Barb Levisay on September 27, 2012 at 11:57 AM