by Steve Pearl for The Imaging Channel
Have you ever considered implementing a vertical marketing strategy for your company, but felt it too much of a burden to really pull off? A recent conversation with the CEO of an imaging software retailer brought this to mind. He stated that incorporating a vertical strategy for his business was basically an inefficient use of time, money and resources. Why focus on specific industries, he said, when more than 75 percent of his customer base has common challenges?
Devoting valuable resources to developing industry training, communications, website expansion, and hiring specialized sales staff to address issues facing only a fraction of his customer base didn’t make sense to him. He also felt that focusing his sales staff on particular companies would leave others feeling neglected. Essentially, he believed that focusing on customer commonalities could achieve a far better outcome than focusing on their differences. He had a point. Most of his customers did indeed have similar challenges, no matter what industry they were in, and regardless of whether software was used for rules-based routing, cost recovery, variable data or document management, it all addressed common tasks across industries. Therefore, he decided to focus his entire marketing and communications strategy on the common problems faced by his clients, regardless of the industry they were in, with an emphasis on the products offered by his firm.
After this conversation, I couldn’t help thinking about the Pixar film “The Incredibles” and the lesson it touches on — “If everyone is special, then no one will be” — and how that lesson could apply to business.
There is no question that implementing and maintaining a successful vertical strategy can be daunting for any size company. Many businesses have made attempts to go vertical, only to find that these were flash-in-the-pan efforts that start strong but quickly fail. After all, a successful vertical strategy is not just about using specialized market lingo, creating industry links on a web page or putting out an industry newsletter. Plus, the dynamics of industries are constantly changing … who can keep up?
If you’re a small- to medium-sized imaging solutions provider, does implementing a vertical market strategy make sense? The answer is a resounding YES.
In order to effectively influence higher level executives, it is required to demonstrate that you have both the knowledge and experience required to meet the challenges commonly found in their respective industries. There is no better way to accomplish this than through vertical marketing by telling vertical stories, since it is this approach that provides you with the avenue and opportunity to communicate how you can be depended upon to solve industry-specific problems.
Unfortunately, in the real world, an ad-hoc vertical “strategy” is typically implemented at the time a prospective customer requests a case study or references for other companies in their industry. The sales staff often find themselves in a frantic state — quickly trying to produce a document to save a deal, or just asking the customer if they could please get back to them at some future time. To be most effective, a proactive approach is needed; one that allows a dealer or reseller to be able to produce proof of their knowledge and experience continually, not just when they are asked in order to close a deal.
To implement a successful and proactive vertical strategy, a variety of approaches can be used, some more extensive than others. One approach is to hire specialized sales staff for each of the industries to be focused on. For example, if the priority is on the financial, health care and manufacturing markets, a larger dealership may hire specialists from within those industries to help guide the company’s efforts to ensure that their offerings and communications strategies are well aligned with the needs of those industries. Obviously, this approach requires a substantial resource commitment, and it was likely this type of “all-in” strategy that the aforementioned CEO was objecting to. For small to mid-sized businesses, an effective and sustainable vertical strategy can still be accomplished with limited resources. What is needed is to be able to learn from your customers, and to achieve this, the following needs to be accomplished:
Categorize your customers by business type
Do you really know who your customers are, outside of what they buy from you and how large they are? It used to be enough to know that if a customer buys product X, then they are a perfect prospect for product X+1, and whether they were a bridge builder or an educator made little difference. It’s funny how once imaging products became ubiquitous, our customers all fell pretty much into one industry category: “buyers of our products.” Of course, now that we are all so well entrenched in the age of solution sales, not knowing what our customers do for a living is no longer an acceptable situation … correct? Well, this may seem like an obvious statement but, surprisingly, many companies do not track this information or, if they do, nothing worthwhile is done with it. This is because, in spite of how well we can all recite the virtues of solution selling, many of us are still perfectly comfortable living anchored in the past. How can this be? Because many imaging resellers are still habitually concerned with knowing primarily the overall size of the customer and what they buy — size defined by number of employees, number of devices, annual revenue, leasing information … and that’s where it typically stops. This information is then used to determine overall business potential. This is particularly ironic, since having such a myopic view of a customer will never result in achieving the full business potential, from either that customer or the industry the customer represents.
Is this what you are doing today with your customers? If it is, then you will need to begin the process of also defining each of your customers by the business they are in. This is the only way to truly understand how to achieve maximum business potential. To assist with this, it may be useful to mirror the way most economists group vertical markets in the United States. They use the following main categories:
Healthcare and social services
Transportation and warehousing
The first four are especially prominent in the imaging industry. You may also categorize your existing and future customers by utilizing NAICS codes (http://www.census.gov/eos/www/naics/), as this is the generally accepted method used to categorize industries in the U.S., and is widely used by marketing companies and advertising firms that offer customer reach-out campaigns utilizing direct mail or social media. Additionally, of course, you will need to establish a method to ensure that all future customers are properly categorized by industry, and that your sales teams gather and report this information for every sale that is made.
Determine the types of solutions your customers buy from you, specific to their industries
The purpose here is to determine patterns and trends in the solutions that are utilized for the industries that you serve. The solution product types purchased for each of your customers, by industry, needs to be added to a database you likely already use for your customers. Use caution in regard to using product names, as the type of solution is often not recognizable from the name of the product, especially if you are a dealer or reseller who sells similar solutions from multiple vendors. One way is to assign a unique code for each of the solutions you sell, such as: DM = document management, CR = cost recovery, VDP = variable data processing, SS = security solution, etc.
Once the above two items are accomplished, you will be able to determine the main industry types your company sells to, by solution. Chances are you already know the key businesses that your customers are in, but you may not know what types of software solutions you sell specific to those industries, or how hardware sales correlate with solutions sold, which will help in prioritizing solution types by industry.
Develop ongoing, industry-specific case studies
What is the most effective way to prove that you know your customers’ businesses and can be trusted to solve their problems? By describing how you already solved similar problems for customers who were in the same industry. After completing the above two items, you will be empowered by being able to produce powerful case studies in a methodical, efficient and continuous basis, and you’ll save an enormous amount of time by not going into frantic mode each time a customer demands this information. You will finally know which of your top customers have been buying your solutions and for which industries, which will then allow you to more effectively focus on illustrating how you are solving industry problems. Now that you are armed with all this new and valuable customer information, you may wonder where to begin. Without a plan of attack, established from the beginning of the analysis process, you may make a very common mistake in not properly utilizing the information you’ve taken the time to gather.
The most efficient method is to focus on your top three customers for each industry, for each of your key solution categories. For example, in the legal market, you may now have data that shows that document management, cost recovery and security are the main solution types that you have sold to that market. This is good stuff, but you now must determine who your top customers are for those solutions (some may overlap, which is even better). Now begin the process of developing case studies, highlighting how you solved a problem for each of those solutions you sold, to the customers you selected. For the education market, you may find that cost recovery solutions are prominent, so you would therefore prioritize a couple of case studies describing how a school you sold to has benefited from the use of your cost recovery solution. Remember, as in all solution sale engagements, the key is to not emphasize products, but rather to emphasize how you solved a critically important problem for those industries you serve.
The developed vertical case studies can now be used to post on the web or social media, to include in proposals, and for running customer outreach campaigns, meant to attract other companies for the verticals you’ve already had some success with.
A good resource to assist you in writing case studies can be found here: https://zapier.com/blog/effective-case-study/.
Some common challenges when creating case studies include:
1) Use of customer names.
You will find that many customers will not allow the use of their name in case studies, which is typically true for certain industries, such as the legal market. Do not let this deter you! For vertical marketing, you are basically telling a compelling story about how your company utilized knowledge and experience to address a business challenge that resonates with others facing common challenges in the same industry. Simply stating up front that this is a case study of a “provider of legal services in the Boston area” may suffice. Actually, many customers will understand the difficulty in providing a company name, since their own company may have similar restrictions as a matter of company policy.
2) Keeping up the effort.
Once the above is accomplished, the development of the vertical case studies must be continued, otherwise the information posted will get stale. Set a goal of creating one or two case studies per quarter, per industry. Sales incentives will help greatly here and should be implemented long term. Do not hesitate to reward the sales staff for the development of a vertical case study, as their cooperation is critical to the continued success of any vertical marketing strategy.
Developing a successful vertical strategy need not be daunting. In many cases it’s just a matter of connecting dots within your own sales company by extracting and utilizing customer data in an efficient and effective manner. It’s worth the initial expenditure in time and will pay great dividends down the road, as your customer will not feel as though they are being treated like everyone else. By being able to implement the above vertical strategy, you will be able to continually prove to your customers and prospects that you truly understand their business. You will make them feel incredible.
This article originally appeared in the April 2016 issue of The Imaging Channel.