Vertical Marketing 101

I had two conversations last week with CEO’s about marketing to a vertical segment (such as retail banking, healthcare, or manufacturing).  It got me thinking about my experiences doing vertical marketing and what did and didn’t work.  In my mind, great vertical marketing comes down to executing well in three areas – Messaging, Content and Sales Enablement.  Here are a few tips:

1/ Messaging – Taking a horizontal product and putting a light coat of vertical paint on it is rarely effective because customers won’t find it credible. The best products for a specific segment were designed from the ground up for those segments.  That said, in my experience it IS possible to take what is essentially a horizontal product and market it to a vertical successfully if you are prepared to go very deep into specifics of how the product addresses the unique needs of the market.   If you value statements are things like “lower costs” and “ease of use” you aren’t there yet.  If you start getting into things like how your product can help companies be compliant with their industry regulations (such as HIPAA for healthcare in the United States, Basel II/III for banking in Europe, FERC regulations for energy companies in the U.S., etc.), how your product can deal with a particular problem common to the industry (such as managing a large number of part time employees in retail apparel or reducing carried inventory for manufacturing), you are getting closer.  Not only do you have to illustrate this in your messaging, you will need to prove your deep understanding of the segment in your other content (see below).

2/ Deep Content – Depending on the product and the market you are going after you can try any of the following:

  • Demos – I like “day in the life” style demos where you are essentially showing how the product gets used for a specific user in the vertical (i.e. an insurance claims agent, a bank teller, a law office clerk, etc) performing a specific set of common tasks.  Remember that the pre-populated data and any applications customizations in your demos also needs to make sense for the segment.
  • Customer testimonials and videos – the trick with these is to get into the details of why customers in that specific vertical chose your product over others in a way that speaks to other companies in the same vertical.  Again – “we chose them because they were cheaper” isn’t what you are looking for.
  • White papers, e-books – these can dive into a particular vertical-specific issue and can help customers understand how to evaluate products within their specific industry context.  The more timely this content is, the more prospects will seek it out and find it useful.  For example a discussion of the impact of a new industry regulation or the impact of a certain major recent event (for example a major blackout or natural disaster for Power companies or Utilities, recent legal decisions, etc.) are examples of events where prospects will be looking for analysis, help and guidance.
  • Blog posts and articles – A blog is a place where you can express opinions talk about current events in a way that might not fit neatly into your web pages, ebooks or press releases.
  • Third-party content – If you are lucky enough to have industry analysts covering your space in any depth it pays to work with them both to learn from and influence their content but also (in some cases) collaborate on content where you can do so in a credible manner.
  • Other industry-specific content – there will be other content you can create such as buyers guides or calculators that will be specific for the segment.
  • Segment-specific landing pages – all of the above should be collected in a destination where prospects in that segment can land and be awed by the breadth of your company’s knowledge of their domain.

3/ Sales Enablement – It isn’t enough to have your marketing content go deep in a segment if leads get handed over to a sales force that can’t talk the talk.  Marketers will need to figure out how best to train their field forces so that they have a deep understanding of the specific environment, pains, use cases and users in that segment.  Many companies have people with this expertise (either in product management, product marketing, field engineering or professional services) but often there is no process to package up that information for it to be consumed not just by customers in marketing materials, but also by the sales force.  Some things I’ve done before to try to accomplish this include:

  • Deal analysis and discussion – this can be done as a document or a presentation to the field but the idea is to document in detail the steps of a specific deal from prospect to close including evaluation criteria, deal committee, the evaluation process and how negotiations took place.  I’ve found this works best when it’s a sales rep or field engineer presenting directly to the other reps (rather than having marketing do the talking).
  • Regulations/Issues/language training – marketing can create sales training materials that pertain to a particular industry regulation or business problem. This training can be delivered in online or over the phone (hint: if you create materials and merely email them out to your sales force they WILL be ignored.  I’ve tracked the open rate on emails I’ve sent to my own sales teams, trust me it wasn’t pretty) as long as it’s done live.  Don’t be afraid to repeat this training and make sure you determine how a new rep that comes on board will get trained.  I also like to publish a glossary of industry-specific terms that folks in the field should know in order to talk credibly to prospects.
  • Customer presentations and Q and A’s – Get a customer to attend your regular sales call and/or your sales meetings to talk about a specific set of problems and let everyone in the room ask a lot of questions.  I once had a CIO come and speak to my sales team about why she chose a competing product to illustrate how some of our sales tactics were not hitting the mark.
  • Whiteboard training materials – People define this in different ways but I would call this anything you can do to help sales do more visual storytelling around your products and solutions.  Marketing can create a set of easy to understand diagrams and graphics that sales can use in a discussion with a prospect using a whiteboard, flipchart or on the back of a napkin.

Am I missing anything?

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55 thoughts on “Vertical Marketing 101”

  1. Love this post April. I see a lot of companies try to do what I call “vertical veneer” in the hopes that they can differentiate themselves in an industry. Worse they try to do it across 17 different verticals and tell almost the same story across each one. The result is just a bunch of marketing clutter.
    I agree that if you are going to do it all you need go really deep, back it up with content and make sure your sales force is with you.
    Thanks for this great post.
    Alex

    1. Hi Alex,
      Thanks so much for the comment! I agree with you that trying to do too many can have a big negative impact and if you can’t go deeper than “vertical veneer” (I love that term) then you maybe shouldn’t go there at all.
      April

  2. Agree on all counts, including Alex’s ‘vertical veneer’ comment.

    The biggest impediment to executing on this – that I continually face – is getting Management’s buy-in to the amount of work and time this takes. There’s a lot of ignorance that needs curing when it comes to the intricacies and discipline of vertical selling. Just because a product can be used for compliance, frinstance, doesn’t mean you have a cohesive, believable message and method for selling into the FERPA segment. Everyone needs to be able to answer the question, “So how exactly does this help me comply with this paragraph of the regulation?”

    Tj

    1. Hi Tim,
      Thanks for the comment (and sorry about the site being down earlier).
      That’s exactly it – there’s a big difference between simply supporting something that’s interesting for a vertical and being able to really sell it. I also agree with you that it’s a TON of work and you will need to get management buy-in to focus on it. If it’s possible to start small to get the sales force to start to buy in then you will have a powerful ally to help you convince everyone else.
      April

      1. So exactly what was the feedback from those two CEO’s you spoke with? Were they clueless, supportive, skeptical, enthusiastic? Did they give any clues/tips/hints/lies on how to convince them the time and effort is worthwhile?

        1. Both of the CEO’s I met with this week are very, very smart when it comes to this stuff. They were each looking for ways that their marketing folks to get deeper in their verticals and also looking for how they could capture some of the expertise they have in the field and package it up in a way that benefited the rest of their sales force. These particular two CEO’s are really driving the rest of their teams to go deeper because they are already convinced of the value.
          April

  3. Hi April,
    This is a pretty comprehensive and well thought out list. I do have a couple of comments.
    The first relates to industry analysts. I have worked for many years in IT and found companies relying far too heavily on Gartner, Forrester etc. for vertical insights. The issue is understanding the key priorities in the C Suite and arming the sales force with the messages to have a meaningful conversation. In this respect I have found that getting close to the analysts that both the investment community and the C Level execs listen to and working with them in the way you suggested reaps far greater rewards early in the sales and marketing cycle. I work in UK and examples would be Enders Analysis for Telcos and Verdict for retail. When these people speak CEOs listen.
    Which brings me on to the messages for sales people. I have seen numerous examples of companies applying whiteboard techniques. The trouble appears to be two fold; firstly sales people are either good at it, or not. Training seems to have little impact. Secondly, it seems to work better for technical products and services, though I’m not sure I know why. What I have seen work to stunning effect is something called a Big Picture which claims to be able to help you describe anything, however complex in less than 10 minutes. You can check it out here http://www.cognac.co.uk/ and then if you are interested I can share with you some specific ways I have seen it work.

    I enjoy the posts. Keep up the good work

    Paul

    1. Hi Paul
      Thanks for the comment. I agree that some analysts can go deeper than others and marketers have to choose who they work with wisely.
      I’m really interested in visual storytelling techniques and the link you shared looks interesting. I had a conversation a month ago with a head of a large global sales organization that had just finished a whiteboard selling pilot that was very successful and he was rolling it out globally. I personally have never gone so far as to have the reps completely ditch their slides but I am a big fan of trying to provide more ways to help the field tell better stories using simple graphics and pictures.
      April

  4. Hi April,

    Thanks for the great post.

    I have some additions.

    Target marketing and list creation are two areas that deserve some specific attention in vertical marketing.

    Defining a vertical market is rarely as easy as pulling a list based on a four digit or eight digit SIC.

    Typically there are segments within a vertical that will be better prospects and that can be defined based on demographics or the way that your solution is valued. For example, the 800 pound gorillas in a vertical may be poor targets due to their reluctance to consider new solutions. Further these accounts may be poor reference accounts as the gorillas are viewed as not comparable to the environments faced by small vertical competitors.

    Second, many attractive verticals cannot be defined by industry at all but rather by pain points. Lists are best procured from directories, trade show lists, subscription list and not from the usual suspects.

    Thanks for ideas in your post.

    Best,

    Robert Lesser
    http://www.twitter.com/RobertLesser

    1. Hi Robert,
      Those are great points! Many vertical markets are so massive they really don’t look like a segment at all unless you break them down somehow (pain points or by other sub-segments). The one that makes me laugh is when people talk about “financial services” as if retail banking and institutional finance were the same thing. If defined appropriately it’s pretty easy to get down to a list of target accounts.
      Thanks,
      April

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  6. April,

    Excellent post! I spent 6 six years running industry and solution marketing at EMC Documentum and have consulted with clients on vertical solutions.

    There are two major and related challenges to vertical marketing:

    First, it’s important to go as deep as you can afford to go – and you need to go beyond content alone. To be successful, that vertical expertise has to permeate everything in the solution – from the product to implementation methodologies to templates and of course all marketing and sales. The best way to go deep is to hire or get consulting help from industry experts. Hire sales folks from the target industry as well.

    Second, focus is critical. If you can only go deep in one or two verticals, that’s fine. Don’t be lulled into thinking that a vertical strategy has to entail many verticals. It does not.

    Final comment on analysts: especially with technology that’s new to an industry, it’s almost impossible to find analysts that are both credible in the industry and conversant in the technology, even if they tell you otherwise. You should definitely pursue the vertical analysts but know that it will take a lot of work to get them to understand the value of your new technology or solution.

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