Vertical Markets – The Best of All Worlds for Buyers and Sellers

0317_KonicaThese days, the way people shop retail has changed. E-commerce plays a bigger role, and with so many specialty stores, a full-line discount store or department store isn’t seeing all the traffic it once did. In fact, the change has been so drastic that we have seen many retailers exit the industry. Shoppers have an abundance of specialty stores in which to find their specific item or to speak to a specialist who can help them find that item. (Think Apple Store or your local cycle shop).

We can do our shopping in a store that offers a lot of items or in the virtual stores that e-commerce provides (Amazon). We can still drill into a specific department so we can browse when we have a need but don’t know exactly what we want, or we can walk into that specialty shop and speak to the product users who have specific knowledge of the various models and their components because we know what we want and want to understand the options.

The two approaches both have merit, and how we shop depends on how much we know. For the person who wants the bicycle and is walking into the local cycle shop, learning from a specialist reduces the time needed to do research at home and understand the different capabilities of a bicycle built with a different frame, derailleur or wheels. But for the shopper who needs some household items and really doesn’t have a direction, the ability to browse the category is the better option.

How We Buy 

In business, we experience the same type of shopper or buyer. An organization may know that their operations are not very efficient and want to invest in Enterprise Content Management (ECM). But what does that mean? Does it mean they want to expand their SharePoint capabilities and use that platform for ECM? Does it mean they have an abundance of paper documents and need to get their back office files in digital order? And how much functionality does the organization need – are they a large enterprise or an SMB?

Where the buyer needs to start the buying process will depend largely on their viewpoint and knowledge level. The seller must have a conversation in order to know the best way to sell.

Verticals Are Important Road Signs on the Sales Journey 

With the B2B buying experience, our prospective customer comes with a few hints to help us be a better “shopkeeper” and provide the options they need. The first hint is the prospect’s industry. Every organization is classified into a specific industry and, while we describe them as verticals [education, healthcare, manufacturing, etc.], they are simply part of a specific group with specialized needs.

Inherent in many verticals are similar problems and challenges. This automatically gives us as sellers more information about what the buyer’s organization may need. On the flip side, the buyer knows if they are speaking to a consultant who has experience in their industry, they can have greater confidence the seller will understand the nuances of their needs.

However, for the symbiosis to be effective, the seller has to be similarly aligned with a vertical specialist that can support their focus. Can the specialist be a whole company? Yes. A company that decides to focus on one to two verticals can align their organization from marketing to sales to implementation with people experienced with the vertical.

Is “Browsing Around” Dead? 

With technology changing rapidly and business software solutions designed to handle many functions, a solutions purchase may not be an “off-the-shelf” option. We still need to do discovery to determine the specific business problems of each customer. It is at this initial discussion stage where having a vertical focus helps the seller better serve the customers. While there are common business problems that all industries share, it is how that problem exists for a certain vertical that becomes the critical point of understanding for the buyer and gives the seller an edge.

For instance, we know every company is concerned about data security for digital records. But we also know the healthcare vertical has a patient obligation for confidentiality that goes beyond protecting a credit card number used for a sale. Within the healthcare industry, electronic records, patient confidentiality, information security, interoperability and government regulations (HIPAA and HITECH) make this vertical’s sensitivity greater than most.

Working regularly with specific verticals and understanding their historical needs and newest regulations allows for a quicker ramp-up time to understanding a particular customer’s problems, and gives the buyer more peace of mind that the seller’s understanding is right in sync with them.

“I Want a Blue One With a Carbon Frame” 

Does that mean we cannot help a specific vertical if we never have before? It does not. The vertical alignment is only the first indicator of possible issues that differ from another customer’s problems or, at least, the intensity of a specific issue is different.

During every subsequent conversation, we refine the specific requirements for that particular customer so we can build the right solution to satisfy their needs. For instance, with financial services, various segments have government reporting requirements that often drive the need to have more organized digital data than paper-based operations – to accommodate audits, regulators and litigation. The mortgage provider is also looking into workflow processing for their mortgage process.

The value of the vertical alignment, however, does enable a seller to specialize and focus on certain industries where they can become experts.

Specialized Confidence 

We all are more confident speaking to the employees in the cycle shop when buying a bicycle because they know their industry, know the products, know the functions, know the capabilities of a cycle that is going to be used a specific way, and what you will get for the price you are willing to pay. The same is true with B2B sales for software. A seller with a solid understanding of the industry, the products that are in use and the functions that are needed can provide a perfectly fitted solution. And while more sophisticated needs may mean more expensive products, with a vertical specialist the buyer feels more comfortable and confident.

Whether the seller is large or small, a verticalized seller has subject matter experts on the sales team to support the specialized focus. They identify new products and services that fit the vertical and understand the aspects of the solution that will resonate well with the specific business needs. This enhances the seller’s capabilities.

Workplace of the Future (WOTF) 

As we move forward into a more connected workplace, with the focus of the traditional office environment changing from where you are to what you get done, we can expect to see certain verticals as drivers of technology, making it critical for businesses to position themselves for the future. Why?

• They must be ready to have what their verticals need.

• They have to be insightful and proactive to maintain their leadership position.

• They have to be identifying the trends that are important to their targeted vertical, if not setting the trends.

With active collaboration within verticals, we can expect to see various verticals align with the changes in the more connected workplace. For instance, robots have entered the classroom and have become the eyes, ears and voice of a student unable to come to the physical classroom. These virtual experiences enable students to stay connected with their classes. Today, schools are starting to use robotics as the need arises in their districts, but in the future, the virtual classroom could be a standard option for any student.

Both buyers and sellers can leverage the verticalization of their target audience to their respective benefits. Verticals driving technology to fit their needs will prompt sellers to react, but ideally, the seller will already be innovating to satisfy the IoT and WOTF. In the end, the vertical alignment enables everyone to win.

This article originally appeared in the March 2017 issue of Workflow.

Joanne Novak is a program manager at Konica Minolta Business Solutions U.S.A., Inc. and is responsible for program development with the company’s Business Intelligence groups, including the Intelligent Information Management (IIM) practice. Her responsibilities are to build sales and customer-facing educational and thought leadership insights as well as strategic initiatives for IIM.