You launch a company. You get traction. Everyone needs your product. Not everyone wants the same version of your product. Many of your customers don’t have time to configure it for their industry, even though your product is D-I-Y (do it yourself). Then you realize that your competition is offering similar variations of your product.
Launching a vertical go-to-market strategy may be the fastest way to win new customers and hold onto the ones you already have. Your customer success team tells you that your largest customers want hand-holding and solutions for their industry. New feature releases from your product and engineering teams certainly patch some of their needs. You realize that this is a new ballgame requiring deeper industry solutions. In order to survive in a “me-too” marketplace, you need to land-and-expand your enterprise market presence. As they say, go big or go home.
You need to get started during the initial growth phase of your startup, especially if you live in the highly-competitive SaaS world.
1) Watch out for the Walmart coming to your neighborhood: When your largest competitor or partner decides to clone your product, you realize that specialization may be the best way to survive. You beat them by becoming more agile and customer-centric. You frequently release features which are hard to duplicate overnight. You enter markets which are difficult for the larger enterprise to navigate. You become best friends with your customers, and save them from shopping at Walmart. 🙂
2) Awareness to the new reality: You’re no longer selling just your products; you’re involved in a solution sale — solving your customer’s biggest problems through increased customization. Would it be possible to increase customization enough to re-sell an upgraded version of your product to hundreds of enterprise customers? That may be the end goal if you want to become another Salesforce or SAP. You stay glued to the SMB market with a retail sales approach only if it continues to grow.
3) Preparing a new conversation: You’re going to be talking to a different decision-maker than you’re used to, possibly a channel partner or business department instead of the IT department. If you primarily work with IT, you need to have a different pitch ready when you are selling to the Marketing or Sales department. If you are talking to a Marketing department handling a specialty like Life sciences, you better have industry experts on-hand. And you may need to build a proof-of-concept just to get to 1st base with this different audience. This prep work involves a huge commitment from every facet of your company.
4) There are potential sacrifices to your identity in some industries: You might have to give up your brand in favor of a partner or customer’s label. A large company like Apple may not want your label appearing anywhere.
5) If you can’t build a vertical off your core application, maybe it’s time to partner: Veeva succeeded by offering CRM for the Pharma and Life Sciences industry. Veeva was built on Force.com. Inspired by Veeva, Vlocity is another company building verticals on top of Salesforce. You don’t need to build on Force.com, but it might be easier to focus on industry features if your platform is known to be scalable.
This is part 1…time to do some homework before beginning part 2, Executing your vertical marketing strategy.