- By understanding current trends and the changes the industry is undergoing, you can adopt a solid process for uncovering vertical market opportunities in your go-forward strategy.
- PSPs can enjoy many benefits by adopting a vertical market approach, including higher revenues, better margins, and competitive differentiation.
- Developing an extensive understanding of your current customers can have a dramatic effect on your vertical market approach.
By Karen Kimerer
Today's customers are seeking trusted partners with a keen understanding of their industry as well as their unique needs. Implementing a vertical market approach enables print service providers (PSPs) to speak their customers’ language and proactively bring them new ideas to improve the impact of their communication spend. As opposed to a horizontal market approach (which involves developing a specific product offering that touches many industries), a vertical market approach involves serving specific customers with specific needs.
Many vertical industries have experienced structural changes because of evolving business practices. Traditional brick-and-mortar retail establishments are being challenged by online buying practices. Consolidation across many vertical industries is accelerating. As if all this wasn’t enough, the COVID-19 pandemic added to the list of disruptions in early 2020. Staying close to industry trends requires ongoing investments. A well-defined approach that can identify the vertical industries that stand out with opportunity is a solid strategy for business growth. This article explores the demand for printed products and communications across key vertical markets.
The Benefits of a Vertical Market Approach
Why is a vertical market approach a solid path to new business opportunities? The answer to this question might seem obvious to some—decision-makers don’t want to take the time to educate sellers about their specific market and needs, and it’s easier to work with a subject matter expert. Although these are good reasons, PSPs can also achieve a number of internal advantages by implementing a solid vertical market approach. These include:
- Higher revenues due to a clearer vision of key documents used within the industry
- Better margins that improve your supply chain
- Lower cost of sales because you can be more streamlined, focused, and productive
- Increased velocity of order delivery because your workflow is tailored around an industry need
- Larger average size orders due to expanded offerings
- A competitive advantage that enables you to be seen as an industry expert
First Things First!
Even if you’ve already become convinced that a refined vertical market approach makes sense for your organization or are reevaluating the current markets you serve, there are some fundamental discoveries that must be followed before you can move forward with intention. Ask yourself the following questions:
- Who do you serve today? Do you have notable customer wins in specific vertical markets? Of the products and services, which are on the rise or decline?
- What value do you deliver to your customers? How does your solution help them engage with their customers or attract and retain employees? Do your offerings help them improve productivity, build brand strength, or increase their revenues? What is your organization doing to help them manage risk, improve product quality, and reduce costs?
- Which markets do you want to move into, and how can you learn more about them? What are their communication trends? Is the industry growing or declining? Are there prevalent print applications that you can serve? How can you deliver unique value?
Developing an extensive understanding of your current customers can have a dramatic effect on your vertical market approach. Taking this essential step can help pinpoint adjacent products, specific needs, and the value you can deliver.
Wait, There’s More!
Let’s suppose you’ve taken the time to find your area of focus and you now feel great about the opportunities that exist in your industry of choice. Highly successful PSPs understand that their efforts cannot stop here. Before pursuing the opportunity with gusto, complete the following steps:
- Create a Market Profile: There are many segments within each vertical market, so it is important to specify the focused audience based on number of employees, annual revenues, or number of locations.
- Identify Key Contacts: If an industry is new to you, bear in mind that the key contacts you must reach might have different titles or roles than you have worked with in the past.
- Identify Industry Influencers: Networking is a sure path to success and can help your company stand apart from its competitors. Learn what you can from your industry peers, and make sure to share your knowledge as well!
- Refine Your Messaging: Specifically communicate the value that your organization can bring to a specific industry, and how you can help your customers achieve their own specific goals.
- Train Your Employees: To master the vertical market approach, everyone on your team must understand your purpose in the vertical you are focused on, the value you can deliver, and why customers would choose you over a competitor.
The Bottom Line
Truly committing to a vertical market approach involves a great many disciplines. Understanding the dynamics of the market you serve requires continual research and ongoing investments in education. All too often, a lack of research can result in inaction or contentment with the status quo. Take the time to follow a consistent and repeatable process, and don’t forget to measure and monitor your results so you can be even more effective in the future!
Karen Kimerer of Keypoint Intelligence has experienced the many challenges of expanding current market opportunities and securing new business. She has developed a systematic approach to these opportunities, addressing the unique requirements of becoming a leader in our changing industry. She is well-versed in 1:1 marketing, web-to-print, direct mail, book publishing, supply chain management, data segmentation, channel integration, and photo products.