It is our general belief that an organization’s long-term growth is best achieved by pursuing a strategy rather than simply following whatever opportunities arise. Being strategic means carefully seeking and selecting only those opportunities that support your business outcomes and vision. To achieve their vision and planned business outcomes, many of our customers employ a combination of target market strategies. The two most prevalent strategies are: vertical and niche. The important nuances between vertical and niche growth strategies have implications for the solutions you create and how you go to market. That’s the focus of this article.

Let’s clarify what we mean by these two terms, because we regularly hear the term “niche” used to define a vertical market. Vertical markets are a category of business. Verticals can include industries as broad as medical devices or financial services or can specify a subsegment of a larger group, such as community banks within the larger market of financial services.


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Niche markets refer to a selection of customers with specific needs that are not necessarily in the same industry. A niche strategy might apply if your product and/or services (solutions) are best suited to a specific platform. Targeting a niche market might mean selecting companies who run their business using Nimble for their customer relationship management (CRM), QuickBooks for their accounting, or Hootsuite to schedule social media. In a niche strategy, the number of prospective customers can range in number and cross industries. In the examples above, the technology they use is what defines the target market. 

These differing strategies will affect how you design your services and/or products and will also inform how you approach your Marketing and Sales. In either case, there is more to the strategy than merely how you package your offer, or how you tweak website copy and your sales enablement assets. 

How Vertical Segmentation Might Transform the Landscape of Your Business

vertical marketing, niche marketing, vertical market strategy, niche market strategy, marketing strategies, marketing strategy, vertical markets, niche marketers, growth strategy, segmentation, market segmentation , business outcomes, outcomesImagine you’re a patent and trademark firm. Your team might include a deep bench of patent attorneys with electrical engineering or computer science degrees and deep experience in the technology industry. Let’s say you also have an extensive roster of computing and software customers. After extensive research, the firm sees a growing opportunity in the medical device industry and decides this is a vertical worth pursuing. Such a decision takes more than sales enablement and some copy modifications. It has far-reaching implications for your organization. For example, to be successful in penetrating this new vertical will require adding people familiar with the medical device industry, and ideally lawyers who have existing relationships with medical device companies.

Such a firm will need to decide whether to hire these attorneys from within the industry, from other firms, or perhaps partner with a firm with the same deep experience in the medical device industry as your firm has in the technology industry. Pursuing this new vertical will also impact your Marketing, such as which events you choose to sponsor or attend. This example is applicable to almost any professional services organization. 

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If your company sells a physical product, vertical segmentation prompts other considerations. Let’s say your company produces piping for residential construction. Based on your research and recent legislation, you decide you want to pursue commercial construction and expand into process piping. Process piping consists of interconnected piping systems such as tubing, pipes, pressure hoses, valves, separators, traps, flanges, fittings, gaskets, strainers and other components that work together to move, distribute or control the flow of fluids and is often associated with industrial factories. The pipe you’ve manufactured for residential construction falls under different codes than pipe used in power or chemical plants, where the materials may be subject to high-pressure process fluids.

Therefore, choosing to manufacture process piping will have broad implications beyond the materials and equipment you use. In this scenario, your sales force will need more than a new deck and battle cards. They will need to acquaint themselves with the new ecosystem of competition, buyers, influencers, approvers, and suppliers that will likely look completely different than the familiar landscape of residential supply. The vertical growth will also impact the customer buying journey, and more broadly, your Marketing strategy and tactical approach.

Advancing a Niche Market Strategy Doesn’t Rule Out Vertical Growth

vertical marketing, niche marketing, vertical market strategy, niche market strategy, marketing strategies, marketing strategy, vertical markets, niche marketers, growth strategy, segmentation, market segmentation , business outcomes, outcomesA niche strategy allows your organization to take a more horizontal approach. The buyer roles and the customer buying journey may remain the same as you expand into a niche market. Imagine you’re a firm that offers equipment manufacturing financing. For example, you offer traditional financing such as a standard loan or line of credit on construction equipment, restaurant equipment, farm equipment, and so on. Given some economic trends, your firm decides to offer equipment leasing as well. This has implications for your company in that you are now moving into the equipment ownership business, which impacts the types of partners you choose.

Pursuing this niche might require your company to consider its game plan for maintenance, storage, and liability, as well as sales training and enablement in order to achieve its desired business outcomes. The target market could be a slightly different subsegment of the larger market you catered to previously, and your branding might need to shift proportionally. Despite these additional considerations, the verticals you pursue, the ecosystem you operate in, and the salespeople you hire won’t necessarily change.

Sometimes it makes sense to combine verticals and niche strategies. If your company has a vertical industry focus, it is often helpful to dive deeper into the vertical as looking for niches can provide good growth opportunities. Keep in mind that this adds complexity and impacts every facet of your business. vertical marketing, niche marketing, vertical market strategy, niche market strategy, marketing strategies, marketing strategy, vertical markets, niche marketers, growth strategy, segmentation, market segmentation, outcomes, business outcomes

Whether you choose to pursue a vertical market, a niche market, or a combination of the two, the key is to choose a segmentation strategy that meets your accessibility and opportunity criteria as well as business outcomes. Considering the overall market picture and your place within it can give you the perspective needed to choose which dimension best suits your growth and expansion, and how to strategize accordingly.

We have a service expressly designed to help you find profitable new segments and verticals. It’s called MarketSmart Segmentation Service Other companies have benefitted greatly from this service. 

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