Find Your Niche: Vertical Sales

Why move to a vertical- or niche-market philosophy? Well, our research shows doing so can produce higher revenue, better margins, lower cost of sales, increased velocity-of-order flow and higher average order size.

To start, you must first select the market(s) you wish to attack. The key, of course, is to precisely define why you believe your organization can be successful in delivering a product or service to a given market. Develop a list of potential market or industry categories you wish to pursue. Create a list of the top five "ideal client" characteristics. Perform basic market research to identify the gross number of clients in that market and the number that fits your "ideal" target. That will help you sharpen your message and focus. It is also essential that you create a positioning statement.

In addition, research and a commitment to work a vertical market are critical. An organization must become intimate with the markets it wants to pursue. To do so, consider the seven following suggestions--and in great detail.

Target Accounts
Identify the top 150 prospects based on your profile work. These may include companies within your chosen vertical that have revenue greater than $10 million, have 100 or more employees, have three or more locations or are geographically dispersed in five or more states, etc. A database of names and company information must be created. These will be your initial sales targets. Also, develop a detailed database on each prospect that includes a minimum of five titles and names for each company or influencer organization. Identify your point of contact and create the various sales messaging to each position of power.

Hint: Establish call-frequency programs to ensure all potential contacts are being reached on a continuous basis.

Industry Associations
Identify the top industry associations, both national and local. Develop a list of all trade shows, monthly meetings, committees, and current and past association leaders. Attend every trade show, and try to hit a minimum of 50 percent of the monthly meetings of each group. Join one committee and become active and visible within your chosen vertical market. Also, ask your prospects and clients what associations and meetings they find valuable.
Hint: Plot all key events within a market on a yearly calendar.

Industry Publications
Identify, subscribe, read and contribute articles in industry newsletters, magazines, trade newspapers, etc. They will keep you abreast of the issues facing your clients and teach you the lingo or buzzwords used by professionals in these markets. Identify all editorial calendars, which highlight the topics a publication plans to write about, and work to meet and know the editors and writers focused in your market.
Hint: Ask your clients which magazines they read for information about their industry.

Industry Influencers
Determine the top accountants, lawyers, consultants and others who service and market to the same industry. These people are focused in the same pursuit, and you may be able to leverage their contacts and your contacts into a joint referral network. Make sure you call, speak to and mail these individuals on a quarterly basis. You will meet them at industry meetings and client visits.
Hint: Ask your clients and prospective clients who their lawyers and CPAs are. You may find a commonality.

Related Vendors
Find five organizations that are noncompetitive, but sell related products and services into the same selected market. You will find these at the trade shows and by reviewing advertisements in industry magazines. Depending on your product and/or services, you may develop a joint alliance/marketing program or simply a lead source.
Hint: Develop a six-, 12- and 18-month action plan with each alliance that includes defined success metrics.

Training Certification
Develop a program to ensure all employees understand and stay current in all aspects of the markets you will serve. You should concentrate on the following: sales skills, market and/or industry awareness, relevant products and services, and customer knowledge. After all, your team must be students of the businesses they serve.
Hint: Training is not a one-time event, but must be considered a continuous process.

Execution of Processes
An organization moving into a vertical approach must recognize that competition may be greater within a selected market. As a result, a greater focus must be applied to each sales plan, all marketing materials and events. In addition, customer success must be measured and closely monitored to ensure total satisfaction. Contact each potential targeted account a minimum of six times per year. This effort will create awareness and focus.
Hint: The secret of winning in a vertical market is to know all there is to know about the industry, the individuals who are in your chosen market and the issues that face the industry.

Ken Thoreson ([email protected]) is managing partner of Acumen Management Group, a consulting organization focused on improving the sales-management functions within growing and transitional companies.