As I’ve pointed out in previous blogs, competition is on the rise, and it is crucial for partners to think through ways to specialize and differentiate their business in order to protect their price points and margins.
Specifically, our latest research with IDC, shared in Part 2 of the Microsoft Modern Partner Series: Differentiate to Stand Out, shows that one of the best ways of doing this is to establish your business as an expert in a vertical. In fact, about 82 percent of respondents to the study’s survey indicated that a vertical focus is important or very important to their growth strategy.
By establishing your business in a vertical, you will experience a reduction in your competition and a greater ability to protect your price points and margins. Plus, with vertical specialization, you will likely also see an increase in the valuation of your business.
Here are a few steps to help you get your strategy off on the right foot:
Step 1: Identify a vertical focus.
Start by reviewing your customer base to see if you have already started to build up a mass of customers in a particular vertical. Then, get your team together to brainstorm and discuss potential vertical targets. Use that time to share your learning and understanding of the needs of the customers, as well as pros and cons of going after customers in targeted verticals. Then, be sure to research both IT spending and customer needs before coming to a decision. To get you started, here is what IDC tells us the top 10 vertical industries in worldwide IT spending are:
Source: IDC #257386, Worldwide Vertical Markets IT Spending 2014-2019 Forecast.
Step 2: Build your offering & find partners to round out your solution.
Once you have established your vertical focus, put an offer together for your customer. Find ways to address the specific customer needs you identified in step 1 with specific technology solutions. Consider building partnerships with other vertical or industry players to round out the total offering and provide a total solution for your customer.
Step 3: Build and execute your go-to-market strategy.
It is important to build an end-to-end strategy that will help you attract, connect with, and close the sales cycle with prospects in your vertical focus. Think carefully about key components of your go-to-market strategy including sales, hiring, website, SEO, and content plans. According to the IDC research, here are the top five tactics businesses use in targeting verticals:
Source: IDC eBook, sponsored by Microsoft, Microsoft Modern Partner Series: Part 2 - Differentiate to Stand Out, April 2016
Step 4: Collect evidence and find additional opportunities.
Once you have hooked a few customers with your new vertical offering, be sure to collect customer evidence in the form of a case study, blog, or testimonial to demonstrate your expertise and understanding of customers in the targeted vertical.
Through the IDC research mentioned above, we also learned that success in one vertical often leads to competency in others. Look for verticals that have similar characteristics to your original target.
For more tips on how to achieve success by going vertical, check out the new IDC eBook, Differentiate to Stand Out. And if you’ve got questions or feedback, please feel free to reach out any time via email, Twitter, or LinkedIn.