It’s always a tough question – should your MSP go vertical or focus on a broader marketplace?
Some MSPs find it difficult to get a foothold in to a specific market but once they break through they are able to focus their marketing, sales activities and product development on a single community of businesses leading to more sales and more efficiency.
So, here’s our quick checklist for targeting a vertical market.
1. Is the vertical opportunity big enough?
The first step to going vertical is defining which market is right for you and whether there are enough businesses in the specific segment of that vertical for you to provide your services to. Say you’d like to focus on accountants. First decide what is your regional focus? Are you wanting to target accountants in your town? Your city? Your country?
While there may be 10,000 businesses in your selected vertical and in your region. The question is how many are a good fit for your services? Are these businesses mostly “one-man-bands” who are home based, or are they predominantly mid-size or large companies with multiple offices?
It’s an important distinction. If you aren’t interested in really small businesses or don’t have the capacity to service large companies then it’s possible this vertical is not right for you.
Once you’ve settled on the appropriate niche size within your vertical then it’s time for the next step.
Your target vertical’s industry association can be a good source of information on the number of businesses you can target in a particular area and how they are further categorised (speciality, size, revenue etc). Also spend time talking to and networking with industry leaders and influencers to learn more about the vertical opportunity.
2. Where do they hang out?
In the IT industry we often attend large events like IT Nation or vendor industry events like HP Discover, as well as attending local user groups and lunch and learns. Where does your newfound vertical hang out? Are they more likely to be found at small local events or large shows? What industry associations do they belong to and do they have Facebook and LinkedIn groups where they share information with one another? Attending events or contributing to online forums is a great way to get to know your selected vertical market.
3. What tools do they use?
Businesses love to talk to someone in I.T. who understands the software that they use. They are frustrated when they call upon I.T. and the support person doesn’t fully understand what they are going through.
Find out what tools your vertical uses most (and even some of the up and coming tools that may be used in the future). Reach out to these vendors and learn about their offering. Ask how you can help them sell more of their product or how you can make it easier for their customers to use their product. Vendors are usually very happy to have a partner that wants them to succeed and your new customers will appreciate the strong relationships you hold.
4. What are they going through?
Now that you’ve established your market and you have a good idea of what tools they use and where they hang out, it’s time to learn about the challenges they face.
Just like MSP’s are constantly concerned about decreasing margins and high labour costs, verticals all have their own challenges. Perhaps their industry is going through a major change or facing new regulations or perhaps they too are under pricing pressure or struggle with sales.
It doesn’t need to be an I.T. problem – in fact, the broader your knowledge is about their industry the more trust you will build and eventually leverage that trust to promote your services.
Read their industry magazines, attend information events, keep an eye on the newspaper to see whenever their sector is mentioned. The more you understand their challenges the more you’ll be able to determine how best to position your services to help them with their business problems.
5. Build your Expert Brand
You’re no longer a generalist. You’re an expert in your vertical’s I.T. so start acting like it. Instead of just I.T Support you offer Fanatical I.T. Support for Financial Planners. Rather than “Cloud” you provide “Cloud for Accountants”. A good marketer can help you rebrand your website and sales materials to press all the right buttons for your new vertical market.
Start a blog or produce other content that shows you know what you are talking about. Promoting and sharing this content on the social channels and forums your target vertical frequents is an easy and cost efficient way to build your brand and credibility. Customer stories and case studies can be very powerful lead generation tools as they show your services in action and provide the implicit endorsement of a satisfied customer.
6. Apply the the right skills at the right time for the right vertical
Don’t waste time on staffing and dealing with the day to day tech support. Focus on finding the right vertical market and giving them the help they need. Benchmark 365 is always here to help if you need a hand supporting your new customers.
We support companies in over 30 different vertical markets from small business to large enterprise. Our team are experts in line of business applications, sales and marketing techniques that underpin our clients chosen market sector and give them the room to grow.