In my WPC session Learn What Successful Cloud Partners Know about Building a Profitable Cloud Business and in my last blog I teed up four key pillars of building an optimized cloud strategy which include:
In my last blog I drilled into how partners are Creating Scale. This week I’d like to drill into the next pillar, Developing Focus. I’ve seen a variety of different approaches to developing focus, but the one I’d like to highlight is to incorporate specialization into your business by targeting key verticals or industries. There is a tendency by partners who are entering the cloud space to want to be all things to all customers. This can be a dangerous strategy because it can result in less standardization, increased delivery costs, and longer sales cycles. It is critical for you to develop focus in your business for two reasons.
Competition is on the rise: In a recent survey conducted by MDC Research* of over 1,260 cloud active Microsoft partners, we found nearly half (48%) are offering project services, managed services, and IP. This rapid transformation of our ecosystem to the cloud means competition is on the rise. Partners need to differentiate themselves to win new business. Often when a customer is selecting from a handful of undifferentiated vendors, the choice is made based on who offers the lowest price.
It will help increase your profitability and revenue: Focusing your business on a vertical introduces repeatability. Your marketing ROI goes up with a market-targeted message, your sales cycles and direct sales costs go down through engaging a consistent prospect, and your delivery efficiency should increase as well. Additionally, if you execute your strategy well, you can command a higher price point from customers.
Here are 3 steps to get you started:
Step 1: Identify your target vertical(s) or industries by evaluating your customer base and conducting research
Often partners don’t start off with a plan to go after a vertical; instead they go out and acquire a bunch of customers, and then when they evaluate their customer base, they realize that they are starting to have success with one or two key verticals. Once you have identified a set of potential verticals or industries to target, it is critical that you invest time into conducting research into the customer needs and pain points within that industry. Look for pockets of government funding that might be available to help offset costs. Understand if there are any special processes or purchasing regulations in place. Find out what kind of growth is expected in IT spending within that vertical or industry by reviewing analyst research and forecasts. Once you have gathered all the data, evaluate what you have learned and make a decision on your target.
Step 2: Capture a case study and invest in thought leadership marketing
To create momentum with your vertical strategy, it will be very important for you to build vertical or industry specific customer evidence to use as a part of your pitch. Another best practice I’ve seen from top performing partners is to invest deeply in thought leadership marketing such as blogs, bylined articles, and developing specific areas of their website focused on verticals or industries to help demonstrate expertise, drive leads, and increase trust. Two great examples of partners doing this successfully include Palmetto Technology Group and Perficient. For more on this topic, check out my blog on thought leadership marketing.
“Thought leadership is all about customizing your message to the customer you’re trying to target to show you understand their industry and their needs. But it’s not enough to just use the jargon – you have to be able to back it up with knowledge. That ultimately means you’re not going to be able to be all things to all people – and that’s ok. Targeting our marketing message has allowed us to narrow in on the specific industries where we really shine – and in turn, allowed us to significantly grow our business in these verticals.” – Sarah Leitner, Director of Marketing, Palmetto Technology Group
Step 3: Refine your sales, marketing, and delivery using customer feedback and by sharing learnings across your organization
In the early days of targeting a vertical it is really important that you closely monitor your successes and failures to determine what is working and what is not and share that information broadly across your team. From a marketing perspective this will involve closely monitoring the performance of SEO and digital marketing efforts in driving leads. From a sales perspective this will involve documenting and sharing the perfect pitch for a given vertical as well as the most effective strategies to overcome objections. Finally, from a delivery perspective, your team can be tuned into opportunities to overcome any industry or vertical specific deployment or integration challenges and can also be looking for opportunities to add other services that are in high demand within a vertical. All of these efforts will contribute to a strengthening of profitability through reduced costs, increased close rates, and more efficient delivery.
I hope this list has been helpful! Stay tuned for my next blog focused on Increasing Value, and follow me on Twitter to get regular updates on profitability resources and tools! If you have feedback, questions, or if you have a compelling story to tell about your company’s transformation, I would love to hear from you! Please reach out via email, Twitter, or LinkedIn.
Until next time,
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