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How vertical should you be?

30 October 2020 | Phil Brown

Verticalisation is currently high on the agenda of many CMOs and Sales Leaders. One of the key questions they’re addressing is what degree of vertical marketing is right for their business. It’s by no means always obvious.
In this blog, we look at the key considerations you need to evaluate when deciding what level of verticalisation is right for you.

Understanding the verticalisation spectrum

When considering your vertical marketing approach, it’s helpful to think in terms of a spectrum of options, rather than taking a binary yes/no view.

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At one end of the spectrum is a completely non-verticalised approach, where the same messages are used, the same tactics employed and the same products and services are offered, irrespective of the sectors your target audiences operate in.

At the other end is a fully-verticalised approach, with completely independent strategies adopted for each vertical sector of your target audiences. With a fully-verticalised model, you would have separate business units, separate product functions, separate GTM plans and separate budgets.

The further you go towards the fully-verticalised end of the spectrum, the greater the potential benefit you can gain in terms of increased customer relevance. The downside is that the cost and effort involved also increases. As a result, few companies adopt a fully verticalised approach. Not just because of the often prohibitive cost, but also because such an approach makes it difficult to leverage synergies across sectors.

So how can you find the position on the verticalisation spectrum that’s right for you?

Four key marketing components to consider

 Our experience has identified four key components of go-to-market (GTM) strategies that you should consider when deciding on the optimum level of verticalisation for your business. By deciding how vertical you want to go in each of these areas, you can gain a clear picture of what will work best for you.

  1. Messaging and propositions
    Do you want most of your messaging to remain standardised, with only some headline messages and images, for example, being adapted to each vertical? Alternatively, are you prepared to, and capable of, creating dedicated new content that is specific to each vertical?
  1. Organisations and resources
    Will you have centralised teams with selected vertical focuses, or separate vertical business units and your sales force organised into separate       vertical teams?
  1. Go-to-market approach
    Will you deploy standard tactics but with some degree of vertical-specific assets, such as landing pages? Or will you have vertical-specific GTM plans and separate budgets for each sector?
  1. Products and services
    Are you going to keep your products and services standardised and just adapt the messaging, or invest in developing unique solutions for each sector?

Of course, these four elements are interdependent and should be considered together. There’s little point, for example, investing budget in lots of vertical-specific marketing activity if your sales resources are not aligned to follow-up that activity and have credible conversations with your prospects.

So what level is right for you?

 There’s no default right and wrong answer to the verticalisation question. What will work best for you depends on the particular circumstances of your business and the markets you’re selling into. There are various factors that you need to consider including the resources you have available, how common the challenges are that your products or services help to fix, and the respective sizes of the addressable markets. 

The right answer will also change over time. Businesses may start off by experimenting with some adapted messaging and a few targeted landing pages. If these show signs of success then it builds the confidence to invest             more heavily.

Problems occur when people embark on a vertical approach without ensuring there is clarity and alignment across the business about what that actually means. If everyone has a different perception of what verticalisation means, and sales, marketing and product teams are all pursuing different strategies, it's a recipe for failure.   

So taking the time to consider these questions upfront can not only save you a lot of time and money, but can also ensure that you’re better placed to achieve the successful outcomes you want.

To see our eight guiding principles for planning and implementing successful vertical GTM programmes, download our eGuide The Power of Verticals