Time to Get Vertical!

With the enterprise IT marketing going to hell in a hand basket, many people are asking what they can do now to keep the wheels on the bus.  One way to make sure you stand out is to shift the efficiency vs. effectiveness formula in the direction of effectiveness.

That means that everything you do needs to be more about being effective than just being efficient.  A horizontal sales and marketing focus is efficient.  You can hit lots of companies in lots of markets with a horizontal technology message — bits, bytes, flops and all the rest.  But, you can’t be very effective in any one customer segment with this approach.vertical

Verticalizing your sales force is pretty expensive, and depending on the size of your operation, may not bring you the effectiveness you’re looking for.  Before going that route, consider verticalizing your marketing.  What does that mean?

Let’s look at what marketing means.  In a classic sense, it’s the “four p’s” of product, pricing, placement and promotion.  Let’s take each one in turn.

Product
Even a horizontal product can be given some vertical content.  At Sybase we had an also-ran application server (Sybase EA Server) which had little or no chance against WebLogic, WebSphere and other app servers.  In 1998 we decided to add some vertical content in the form of financial messaging – FIX, SWIFT, OFX, etc.  Voila!  We now had something to sell to our customers in the financial vertical.  There is not a doubt in anybody’s mind who was involved with Sybase Financial Server that we had a big impact on moving the horizontal application server with this strategy.

There’s also the third-party add-ons to your product if you can find them.  Sybase made a lot of money being resold inside of trading and risk management systems on Wall Street.  These were database licenses that they would not have gotten otherwise.

Pricing
This one is harder.  It’s not easy to charge different groups of customers different prices for the same product.  In some markets it may even be illegal.  Skip pricing…

Placement
For enterprise tech, this means channel.  You can impact placement by recruiting vertically embedded channel partners – integrators with a focus on a key vertical such as healthcare or government.  Service partners with vertical specialties are incredibly valuable in penetrating markets.

Promotion
This is really the content and promotion section.

Most horizontal technology products and services vendors have some content on their site about their markets or “industries” they specialize in.  Most of it is crap.  It’s a throwaway that RBS uses your security solution, or that Verizon embeds your linux in their switches.  That they bought from you is no big deal.  What’s often missing is anything about your specific differentiation related to a customer’s market.

For example, if your columnwise database format makes realtime risk calculations 10x faster, driving more profitable algorithmic trading – that’s relevant!!  Or if your security products have been certified for standards specific to the target industry – fantastic!

The promotion side – programs such as PR, advertising, events, direct, web/emarketing, etc. – can be a big area of verticalization.  While your competitors spend money fighting their way into the same 5 CRM publications, you could be getting coverage in American Banker, or Securities Information News.  Instead of buying a booth at “Enterprise 2.0″ and other lame-o horizontal tech chose (ugh – LinuxWorld!), how about sponsoring a Wall Street CIO breakfast or showing up at the SIFMA conferences.  Be careful though!  Don’t bring your horizontal game to a vertical playing field.  You need to target your message in your programs too.

Being more effective at vertical marketing is more work than most people understand – and the results are predictable for those who do this halfway.  However, if you take a wholistic approach to vertical markets and do it right, perhaps you’ll establsh a leadership position in a key segment that helps you weather the downturn.

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