The Green Sheet Online Edition
December 22, 2008 • Issue 08:12:02
When I studied marketing back in the dinosaur age, we learned about two primary markets: business-to-business and business-to-consumer. A few years later, marketers were talking about targeting a new segment comprising small to medium-sized businesses - the SMB market.
And then we went vertical, targeting such markets as Internet technology, entertainment and financial services.
Today, a marketing program is not fully developed if it does not incorporate these vertical market opportunities. In the payments industry, focusing on specific vertical markets can deliver significant marketing bang for the buck and help establish brand awareness as quickly and surely as virtually any other approach.
Marketing and sales are most effective when the specific needs and interests of prospects are addressed; these needs and interests change according to the vertical market represented.
Restaurants, for instance, may be more open to payment processing if merchant level salespeople (MLSs) lead with cash advance; they will be tough to close if MLSs have no understanding of restaurant POS systems.
Selling to a landscaper, on the other hand, will likely include a discussion of mobile payment processing, while selling to a bodega or convenience store may be easier if MLSs offer a cash program for the unbanked.
Thought leaders within industry segments will also read certain industry trade publications and newsletters with more attention and regularity than others. Similarly, they will likely attend key tradeshows that attract other industry members and prospects.
To effectively capture market movers and shakers, attendance at relevant tradeshows is almost a necessity, as is familiarity with - and perhaps advertising in - the relevant trade publications. The more able one is to speak the language and understand the quirks of an industry, the more effective sales efforts will be.
But few in our business can afford to target every vertical market. In fact, few can even afford to target one vertical effectively. That is why, as our economy slows, more and more marketers are narrowing their focus even further, choosing small segments of verticals they can afford to reach, mingle with, get to know and eventually capture.
Before the advent of desktop computing, I kept information for all of my contacts on color-coded index cards carefully sorted in a shoebox. (And yes, I will always remember the time I dropped the box.)
Today, database technology and analytics enable us to drill down into market segments, store important data, sort it in a variety of ways and automatically send tightly crafted messages to carefully selected micro-markets.
With the Internet at our fingertips, we can easily identify industry publications, tradeshows, trends and thought leaders, and craft our marketing campaigns accordingly. What is more, we can measure results and tweak strategies to maximize both effectiveness and efficiency. Micro-targeting that used to take years now takes days.
How to target
We'd all like to take our share of vertical markets like government entities, banks, franchises and restaurants. But these industries aren't small, narrow or new. Big fish have already invested heavily to reach the players in these verticals, and economies of scale make it difficult for smaller ISOs to compete. So don't start with the obvious.
Look instead toward micro-targeting, and select smaller subgroups within vertical markets. To identify appropriate market segments, take a good, hard look at yourself and at the world in which you live.
Target industries that make sense for your business model. Is there an area in which you excel? Does your brand incorporate any products or services that speak more potently to certain markets?
Marketing SeñorPay is an obvious example. I would be wasting my time and money if I tried marketing this Spanish-language payment service to all restaurants. But focusing on Mexican restaurants gives me a smaller universe in which to operate.
Since my budget is limited, I'll start by focusing on Mexican restaurants close to home in the Dallas/Fort Worth area. That gives me two strong advantages to include in my marketing messages: I'm right around the corner, and I speak your language. As I learn more about what makes this narrow market tick, I will expand my geographical area with a better prospect-to-close ratio.
Examine the trends
To plan for the future and stay ahead of the competition, keep informed about what is happening in the industry and beyond. The economy changes. Administrations change. Consumer preferences change. Each factor has an impact on the growth and popularity of some products or services over others, and thus on the profit potential of vertical industries.
In our current economy, for instance, automobile sales are down, upscale dining is down and much of retail is down. But it is likely governments and municipalities will be spending more in the near future, liquor stores and hair salons will remain stable, and the funeral business, particularly in light of aging baby boomers, will probably trend up.
The fact is some industries do better in a down economy. To find the best targets for your business, stay aware. If you know what is going on in the world, you'll not only discover growth opportunities, you'll be better equipped to represent yourself well in any business situation.
It is difficult to be efficient and effective when marketing solutions one product at a time. That is especially true when the product is likely considered a necessary evil, as is often the case with payment processing.
Savvy marketers know the best way to attract and convert prospects is to get away from touting product benefits and focus more on the unique needs of their target customers. This is what vertical marketing is about.
Using blogs and select industry Web sites, the diligent marketer can speak pointedly to a very narrow market and in a language its constituents can understand. By addressing the needs and preferences of markets, communications can be built on trust and respect - key ingredients in all sales and loyalty efforts.
Additionally, many marketers find it more profitable to sell platforms than to sell products. Many ISOs, for instance, sell processing only. Once merchants sign the agreements, agents move on to the next product. Nothing is done to cross sell or up sell existing clients.
Instead, offering a variety of products on a single platform takes advantage of existing customer relationships. And it is the platform that conveys your company (including all of its products and services) is uniquely positioned to meet specific customer needs.
For example, our SignaPay tag line, Simple Solutions in a Complicated World, represents our platform. Based on our belief that merchants are becoming overwhelmed by the complexity and constant changes rampant in our industry, we focus on how simple it is to do business with us.
We keep choices limited, keep communications clear and offer pared-down training. Every new product or service is another easy way to keep merchants' businesses running efficiently and profitably. Simple.
Vertical marketing is time-consuming, particularly at the outset. But when it is carried out in a thoughtful, planned way, it can also be very cost-effective. And in the end, establishing a leadership position in any industry is a wise way to get the market to do your selling for you.
Nancy Drexler is the Vice President, Marketing for SignaPay Ltd., an ISO headquartered in Dallas. Reach her at firstname.lastname@example.org.
Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.