For B2B tech firms, focusing go-to-market activities around key verticals isn’t a new approach, but significant market trends are making it an increasingly important one. Changes in who’s making tech purchasing decisions, how they’re making those decisions and what they’re expecting from vendors are all helping drive a vertical focus. At the same time, B2B marketers are better equipped than ever before to deliver highly-targeted messages.
In this blog, we explore some of these driving forces behind the rise of vertical marketing approaches.
It sells to be specific
The shift in B2B buying away from IT experts to Line of Business (LoB) professionals is clear, >40% of IT spending in European companies now comes from LoB rather than IT [1]. LoB buyers aren’t interested in the ins and outs of tech. To engage them, vendors need to demonstrate a strong understanding of how tech can be applied to their industry, and what it can do to improve their business.
With more than 68% of their buying journey now spent consuming content prior to contacting a salesperson [2], B2B buyers don’t want to read generic content that has no practical implications for their business, and product-led messages no longer cut it. To get buyers to engage, vendors need to talk about the business issues and the market drivers that are impacting them specifically. Already 66% of B2B buyers say that it’s very important that a solution provider’s website speaks directly to the needs of their industry, and that providers show expertise in their area. [3] Verticalisation enables vendors to demonstrate this deeper understanding.
As vendors increasingly target buyers with business-specific messaging and tactics, a vertical approach not only reflects the trend towards greater B2B personalisation, but also provides a great foundation for building Account Based Marketing (ABM) programmes. With 71% of companies that invest in ABM reporting that their ROI is somewhat or significantly higher than traditional marketing programmes, the attraction of ABM is clear. [4]
Partner pressure
Many B2B technologies companies are investing more in vertically-targeted marketing programmes because it helps them build stronger engagement with their channel partners. Amongst top-ranking MSPs, 78% concentrate to some degree on specific vertical industries, and more than half say vertical market specialisation leads to greater revenue opportunities. [5] It’s easier for vendors who adopt verticalisation to get channel partners aligned with their approach, strengthening sales-driving opportunities.
Simplifying marketing through martech
The growing adoption of sophisticated marketing automation technology is also driving the growth of vertical marketing. Two thirds of B2B companies use one or more marketing automation platforms , and spending is forecast to grow at 14% per annum through to 2023. Martech has simplified many elements of the marketing process, from being able to more precisely segment audiences by industry and persona, through to creating adapted content and communications for those different audiences, and then tracking how audiences are interacting with that content. A 2019 survey of CMOs found that 62% of B2B services firms are already using Artificial Intelligence to support content personalisation.
Not whether, but how
The question is no longer whether to verticalise, but how you should do it to get the best results.
To find out more about the drivers behind the growth in vertical marketing and the steps you can take for success, download our eGuide The Power of Verticals.
References
[1] IDC May 2019 https://www.idc.com/getdoc.jsp?containerId=prEUR145101219
[2] Forrester (2019). Empower Your Channel Partners with a Service-Led Approach to Through-Channel Marketing. Webinar
[3] 2017 Content Preferences Survey Report, Demand Gen
[4] ITSMA and Demandbase (2019). Moving to ABM Maturity: 2019 ABM Benchmark Study
[5] 2018 Channel Futures MSP 501 https://www.channelfutures.com/msp-501/channel-futures-releases-the-2018-msp-501-report
[6] Sagefrog Marketing Group, 2020 B2B Marketing Mix Report, 13th Edition
[7] Forrester “Marketing Automation Technology Forecast, 2017 to 2023 (Global)” (2018)
[8] The CMO Survey August 2019 https://cmosurvey.org/results/august-2019/
