Visit any web site, read any piece of collateral or examine any marketing program, and you won’t find too many b-to-b organizations marketing just products anymore. The age of solutions is upon us, and vertical-specific solutions have rapidly become the approach of choice to capitalize on this growing craze.
Most organizations correctly understand that the value of a vertical focus is in its ability to leverage and target specific features and benefits to specific needs within specific markets, but it’s never that easy. Vertical marketing is not just a messaging approach; rather, it is a long-term shift in strategy that requires a collaborative effort with sales to truly make it work. In this article, we discuss five key gates that all organizations wanting to go vertical must navigate; a companion brief will review the most common mistakes they make when trying to do so.
Every vertical market comprises many sub-verticals, each of which is its own “industry within an industry” with highly specific business drivers, buying processes and macro factors that will greatly affect the proclivity to buy what you sell. When b-to-b marketing or sales leaders tell us they target the “financial services” market, our first question revolves around asking whether they have taken subsequent cuts. Is it banks? Insurance companies? Brokerage houses? Buy side? Sell side? And most important, what are the selection criteria that have been used to prioritize one or more against the others? The creation of an agnostic ranking framework helps to ensure that the best sub-verticals are selected, not the ones that for one political reason or another carry the loudest voices.
The success of any vertical marketing initiative can be directly correlated by the specificity that an organization segments a broad vertical, and then selects the best sub-vertical candidates to target its messaging, human resources, training and programs. Doing this on macro vertical level likely won’t be granular enough, and will also spread your marketing dollars and resources so thin as not to be impactful in any marketplaces.
Two: Solutions Delta
Few issues within specialized marketplaces can be solved through the purchase of a single product; vertical positioning is the most powerful when a complete industry-specific solution is offered (hence the notion of solution marketing rather than straight product marketing). SiriusDecisions refers to the gap between the requirements that an individual product purchase meets and the true solution to a problem as the “solutions delta,” and it is a term that will be highly relevant in your vertical analysis.
Few organizations have an existing product that by itself solves a sub-vertical need, unless it was initially developed specifically for that purpose. For example, unless you have intentionally developed a straight-through-processing solution for online trading, it is unlikely an existing product in your portfolio has the right capabilities. If you’re lucky, more than one of your current products can be combined to satisfy this requirement; ancillary services and third-party partners could also be wrapped around these products to fill in the gaps that even combinations of products cannot close. If this isn’t the current case in your organization, messaging to specific problems within an industry will be difficult, as you will not be able to eventually fulfill no matter how well you reflect marketplace realities in your collateral, programs and sales pitches. In some cases, the delta may even cause you to fall short in terms of regulations/compliance in certain sub-verticals, obviously a total disaster. To go vertical, products will have to be enhanced or adapted, or partnerships with complementary vendors will need to be forged.
Three: Domain Knowledge
There are many reasons that someone in a particular marketplace will buy something: There might be a catastrophic event that forces their hand in an immediate sense, or they are convinced over time by influencers that they trust that a change needs to be made in the way they have grown accustomed to doing business. As a marketer, you must be able to understand these potential catastrophic reasons and the sub-vertical-specific impacts of waiting until disaster occurs to find a solution, as well as to align yourself with the specific influencer communities that can credibly assist you to drive change. This understanding of buying triggers is absolutely critical, and it is where the gathering of domain-specific knowledge truly begins.
With buying triggers in hand, you can begin the gathering of domain knowledge that relates to the way that prospects buy within a specific marketplace. This will lay the ground for everything from collateral development to program delivery to the assignment of human resources that will act as domain experts within a buying cycle as necessary. Each must be tailored by audience and role within the cycle in order to be as effective as possible.
The first step in marketing any vertical solution is to review your messaging architecture. In our research brief, “Marketecture: The First Solutions Evolution,” we discussed how to recast your organization’s product and services mix to better fit known problems and issues within a target market. This involves auditing your existing messaging and positioning and updating them to communicate value to individual marketplaces/sub-verticals. Taking this step will transform your organization’s messaging as well as impact how it is delivered by sales.
The next step is to learn the language of the marketplace(s) you are targeting. After you have developed new messaging and positioning, we strongly recommend validating it with any customers you have in the space, and refining both as necessary. Smaller organizations should focus their energies on crafting messages for one sub-vertical at a time, while larger organizations with more resources can create multiple messages simultaneously.
Five: Sales Readiness
Vertical success does not start and end with marketing; sales must also be able to internalize and communicate value propositions, business needs and capabilities against relevant audiences that it will manage within buying processes. A sales readiness function can play a key role in moving sales to a solutions mentality by working with product marketing to gather the content and training materials necessary to equip sales to sell vertical solutions and to release this information in a sales playbook that can be more easily absorbed by the field. This playbook should include all the messaging, positioning and competitive data sales needs to learn to communicate value and overcome objections with individual opportunities.
Sales readiness also will coordinate the training and education of field and channel sales, particularly your organization’s industry experts. These resources should be coached on your sales processes, and carefully monitored in terms of how and when they are used; a rules/process system must be in place to make sure that valuable cycles are not wasted on inferior opportunities, or at the wrong times within quality opportunities.
Executed incorrectly, vertical marketing can be very dangerous business for b-to-b organizations. Although you may find a quick boost with better messaging in the short term, long term you will be challenged to deliver on implied promises, a fact that competitors can and will expose. Taking a measured approach to sub-vertical selection and execution not only ensures sustainable success in the short term, it becomes the foundation for future solutions expansion.
About the Author:
SiriusDecisions, a leading source for business-to-business sales and marketing best-practice research and data. SiriusDecisions Executive Advisory Services, Consulting Services, Benchmark Assessment Services, Learning and Events provide senior-level executives with the sales and marketing operational intelligence required to maximize top line growth and performance.
©Sirius Decisions, August 2008. Reproduced with permission.