Today’s cloud solutions and the related customer needs are changing the service mix, affecting how such services are being sold and, who they’re being sold to. Before software-as-a service (Saas) and cloud computing started to have a major impact, most technology sales teams were organized geographically. It was less expensive in terms of coverage, and as the primary target was a CIO or other IT decision maker, firms settled on a horizontal approach. But the infrastructure for delivering new IT solutions is now more frequently implemented by an outside solution provider, payments are changing from capital to operating expenses, and decision making authority is moving away from IT towards line of business functions.
Of course, business functions buy based on their business needs, not on technology features. To sell them successfully requires a much stronger knowledge of their businesses. Recognizing this, many firms are adding a vertical dimension to their sales organizations so that reps can gain a more in depth understanding of customers’ business needs. Marketing is following suit, to enable sales with the necessary “verticalized” solutions, messaging and collateral. Not surprisingly, Gartner and other analysts forecast that spending on vertical industry offerings will now grow much faster than general enterprise software spending in the coming years.
To be successful in this new environment, it’s important to determine which verticals hold the most promise for sales of your particular solution. The changes occurring require a stronger industry focus. Yet trying to focus widely on a large industry sector (e.g. healthcare) instead of more narrowly on sub-segment (e.g. healthcare providers, or yet more focused – hospitals) risks developing weak and ineffective sales and marketing capabilities. Of course, focusing on the wrong sub-segments entirely, risks poor sales and missed quotas. So before reorganizing it is vital to determine not only which industry sub-segments are important and why, but also to understand the differences between how each sub-segment uses and values the solutions you provide.
When you go-to-market in an entirely horizontal fashion, it’s easy to assume that every customer uses your products or solutions in broadly the same way. However, depending on the offer in question, different industry segments can have significantly different needs and benefit quite differently from one another. For example, Oracle | Eloqua found that more highly regulated financial services industry segments – banking, insurance, investment management etc. – had very different needs when it came to marketing automation than did the technology sector, an initial area of strong focus. The financial services industry is more mature industry and most firms have stronger governance in place regarding prospect, customer and shareholder communications. The promoting of capabilities such as ease of use and rapid response needs to be tempered with assurances about control.
Similarly, when Kronos surveyed Dining Industry management about their workforce management solution needs, they found that the majority of businesses relied on their point of sales (POS) systems to track employee hours. Although adequate in the past, the new healthcare regulations that become affective in 2014 require more stringent management of employee hours in order to differentiate between part-time and full-time employees. New time management capabilities that meet both the budgetary and functional needs of the industry will be required.
A big benefit of developing a stronger industry-segment focus is the ability to become a better thought leader. With a broad or horizontal focus, there are just too many changes occurring to help customers and prospects interpret events. But with deeper industry knowledge vendors/service providers also gain the necessary foresight to be responsive to changes in regulations, competitive offerings, economic and business issues, market trends and other shifts in each specific market. Understanding and reacting to these changes then provides the raw materials for thought leadership content that can be used both to engage customers online as well as to arm sales people with the knowledge they need to be seen as trusted advisors.
Gaining the necessary depth of knowledge required for success can take time. Learning from your customers and prospects is a key ingredient but going in cold and asking “what keeps you up at night” will not endear a sales person to a Line of Business decision maker. Rather it’s important to do your research first. Obviously the Internet and social media, in particular, can provide a lot of information. But finding the key factors that will drive your business can be a time consuming exercise. Think about surveys too. A survey of prospects can provide quicker and more targeted answers as well as actionable intelligence and, if done right, access for sales to key decision makers and influencers.
Learn more about how aKronos uses prospect surveys to identify emerging issues for their thought leadership content and their lead generation efforts. Click on the button below to download the SimplyDIRECT Kronos Case Study.
Are you taking a more vertically-oriented approach to sales and marketing than previously? Tell us about your experiences in coming up to speed on your customer’s business issues.