What are the main issues you face when you target new vertical markets where you don't have any experience in that area. Also, how do you overcome these problems?
I get asked those questions frequently. But usually it's after the decision has already been made and the poor salespeople are struggling to gain a foothold in the new vertical market.
If you're considering moving your company in a new business direction, here are my suggestions:
Your biggest issue will be credibility. Corporate decision makers don't want to be your first client in a vertical market. They don't want to have to educate you since it takes up their precious time.
Even though you're a good company, they know that your lack of experience could lead to time-consuming and costly errors. They don't want to risk this happening.
1. Move into the market slowly.
Don't bet your company on success in the new vertical. Study the industry. Learn their terminology. Know their competitors. Double check for "fit". I've seen way to many companies leap into new markets because they sense greater opportunity there than in their current market space.
2. Define the business case.
Uncover how they're currently handling things related to your offering. What are the common status quo scenarios? What business objectives will they have difficulty achieving unless they change the status quo? What are the financial ramifications of these? Then define the value they'll get from changing to your product/service.
Potential clients need to hear a strong value proposition that clearly articulates the business outcomes they'll realize by using your offering. Use business terminology, not techie talk.
3. Create linkage.
If possible, try to create a link between your current customer base and your new one. If all your clients are schools and now you want to move to theme parks, you need to be able to clearly articulate why it's relevant.
As an example, last week I had lunch with a good friend who spent over 20 years in marketing with a large accounting firm. She was laid off a while back. Now she wants to work with technology companies.
After analyzing both industries, combined with her experience we realized that her expertise was in helping company's implement strategic changes in their marketing. That positioning makes sense to potential decision makers - and minimizes the "you don't have any experience with companies like mine" objection.
4. Pursue smaller opportunities first.
This significantly reduces the decision maker's perceived risk in moving ahead with a new player in the market. Then, make sure you do a superb job on delivering on what you promised. After that, pursue additional opportunities within the account to expand your footprint.
5. Train your salespeople on all the above.
Without this knowledge, they will flop. That I can guaranteed 100%. Ultimately these people have to make it happen. Don't send them into the field with some worthless PowerPoints explaining your technology in excruciating detail. They need to be able to have intelligent business conversation with decision makers.
6. Create field-ready sales tools.
Focus especially on the early stages of the sales cycle. Your sales reps are going to have a tough time setting up meetings. Show them how to integrate their value proposition into phone calls, voicemails and emails.
Give them relevant white papers and case studies that are closely aligned with this new market segment. They must be able to show your company's expertise to customers, so this is a necessity - even if you're moving to a new market.
Create a "question matrix" that outlines what they should be looking for on calls and the questions they should ask to uncover this information. Develop customer-focused PowerPoints to use on follow-up meetings.
It takes a lot of hard work to succeed in a new marketing segment. Implement the above suggestions and your chances of success increase. Rush blindly ahead and you'll most likely waste tons of money, put your firm in financial distress, frustrate your sales force and create incredible internal animosity.