How vertical should you be?

  • 10 Mar 2022

Momentum ITSMA Staff

With 66% of B2B buyers saying it’s important that a supplier’s messaging speaks directly to the needs of their industry, it’s not surprising that 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.

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.

Four key marketing components to consider

Based on our experience we’ve identified four key components of go-to-market (GTM) strategies that should be considered 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 willing and able to create dedicated messaging and content that is very specific to the needs of each vertical? The latter requires more effort, but will greatly increase the relevance to your prospective customer.
  2. Organisations and resources Will you have centralised marketing teams managing multiple verticals, or dedicated resources focused on each industry. Will you rely on generalists to do the selling or organise your sales force into separate vertical teams and help them become subject matter experts in those areas?
  3. Go-to-market approach Will you deploy standard tactics but just have some degree of vertical-specific assets, such as landing pages? Or will you have vertical-specific GTM plans with eparate budgets and tactics tailored for the unique circumstances of each industry?
  4. Products and services Are you going to keep your products and services standardised and just adapt the messaging, or will you be investing 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.

In this blog, we look at the key considerations you need to evaluate when deciding what level of verticalisation is right for you.

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Momentum ITSMA Staff