Someone once asked a famous mountain climber why he wanted to climb the mountain. His reply: "Because it is there."
At first blush, this kind of thinking seems antithetical to business decision-making, where choices must be justified and results quantified. But look a little deeper and you'll find a kernel of wisdom here, too. Life in the valley, mountain climbers suggest, is not the only life; keep your eyes open to new possibilities and challenges, they say.
Businesses, particularly mature and successful ones, often suffer from a dangerous myopia that blinds them to new opportunities for their products and services. This brings us straight to vertical markets, and why they are so important to business health.
Current economic conditions provide another incentive for pursuing vertical markets. While a number of industries, hammered during the last recession, have recovered, their growth rates may not be as robust as before, or they may have returned with a slew of new competitors that make them more expensive for long-time participants.
As our overview (see page 4) makes clear, a number of companies have institutionalized a strong approach to vertical marketing. Take IBM Corp., which targets 17 vertical industries that are grouped into five major areas-financial services, wholesale distribution, public sector, communications and industrial.
"Every six months or so, we look at trends in these industries to determine where the growth is and where we need to shift our resources," said Ed Abrams, VP-integrated marketing communications at IBM Americas.
As Abrams indicates, researching the fundamentals of an industry segment-and monitoring one's own sales trends in that segment after entering it-is of paramount importance for a vertical marketing strategy to be successful. And be sure to stay alert to industrywide events-new legislation, consolidation, a crisis (such as the impact of Hurricane Katrina on the housing market or the Sept. 11 attacks' impact on the security industry)-that will create an opening for your company. And don't forget the obvious way to research an industry: Subscribe to the leading trade journals and check their Web sites. You'll be surprised how many business development ideas flow from this one step.
In recent months, I've listened to a number of marketers talking about how they entered new lines of business or new markets. One common tactic: Attend the industry segment's top trade shows and talk with many, many people. Pay special attention, these marketers say, to the way these industries refer to your products or services. You may find they use an entirely unfamiliar lingo. Why are these linguistic differences so essential? Because you'll need to update your search marketing terms to capture these keywords. (While you're at it, recheck how your primary industry refers to your products. JohnsonDiversey Inc. hasn't referred to its cleaning products as "floor wax" in decades, but it makes sure this term is in its search engine keyword buys.) And once those vertical market searchers reach your Web site, be sure to provide them with content tuned to their markets, their needs, their problems.
Another vertical marketing tactic: Leverage existing partner relationships. If your channel partners already participate in multiple industries, they may have invaluable insights into how your products or services can be adapted to these sectors. It's a win-win for you and your partners.
Vertical Insight: 2006 Guide to Marketing to Vertical Industries is a collection of the Vertical Insight sections that have appeared in BtoB over the past year. While the stories, columns and case studies we've accumulated provide plenty of useful information-many have been updated for this issue-it's our Vertical Vehicles charts (publications, trade shows/events and Web sites) that really make this package valuable. We believe these lists will help you jump-start your own vertical efforts.