Are you tired of being a jack of all trades? If you want more clients, less competition, and greater profitability, there is a better way. It is focus. Targeting vertical markets allows you to better focus on potential new customers. It allows you to really specialize, focus on your clients and their industry. As a result you will be able to provide a more complete solution. Your deep understanding of the vertical will enable you to add value to the client.
Targeting everyone by a more horizontal approach can be tempting, but it turns you into just another company offering your services. With a horizontal approach you will fail to differentiate yourself from your competition. But, when you specialize in a vertical, you develop a deeper understanding of the market and a stronger relationship with your clients.
Focusing on a vertical you will really understand your clients. Not only that, but you will understand how your solution works best for the legal, manufacturing, construction, or whatever vertical you decide to focus on. Companies that sell horizontally are experts at their own product offerings, but those with vertical focus are not only experts at their own technology, but at the needs of the vertical. As opposed to horizontal providers, vertical focus helps you understand the vertical, learn their terminology, and recognize their practices. A horizontal service provider might want to sell to several different industries, but would have no understanding of the real intricacies of the market.
It is also easier to market to a vertical. Developing your marketing materials, identifying appropriate trade events and professional organizations, and communicating your value proposition can be done much more effectively with a vertical focus compared to a jack of all trades approach.
The vertical approach will also make you more profitable. Clients talk and network within their own verticals which can lower new client acquisition costs. Vertical word-of-mouth advertising will make your marketing efforts more cost effective. The insight you gain from your vertical focus will enable your team to execute each project faster and more efficiently, making your firm more profitable.
Your deep understanding of the vertical makes competing against your firm extremely difficult. As a vertical provider you will know more about the market than your competitors, and you are the better choice for the client. In addition, you can charge more than generalists.
The vertical focus is not without its challenges. It requires complete focus on your chosen industry, but that same focus is what makes you the better choice over generalists.