IT and Business Insights for SMB Solution Providers

6 Tips for Adopting a Vertical Focus

Channel veterans give practical advice for securing market share through industry specialization. By Geoffrey Oldmixon

VENDORS, DISTRIBUTORS, and magazines like ChannelPro have been exhorting people to “go vertical” for ages. But where should a VAR or MSP get started? ChannelPro talked to three industry veterans with managed services specializations in vertical markets. They offer these six practical tips.

1. Know Your Stuff
It all starts with accumulating know-how, and Seana Fippin, president of Brentwood, Calif.-based Red Box Business Solutions, warns that it’s easier said than done. “There are an awful lot of factors that go into it,” she says.

Seana Fippin, Red Box Business Solutions

For one, you must get a working knowledge of the top industry-specific line-of-business (LOB) software systems. Automotive dealerships, a Red Box niche, use LOB applications from three manufacturers: Reynolds and Reynolds, CDK, and Dealertrack. “You have to have the skill set that understands legacy systems, how they work, and how they integrate with [other] technology,” Fippin says.

You also have to understand the business, adds Michael Goldstein, president of LAN Infotech, an IT solution provider in Fort Lauderdale, Fla., with vertical expertise in the legal, nonprofit, and medical industries. “The biggest misconception is that you can just get an app and be the widget expert. You have to understand how to talk to the client,” he stresses.

2. Learn from the Source
Don’t be afraid to go behind the scenes for inside information. Before he grew a managed services operation from 12 dental offices to over 200, C.J. Ezell asked an early client, “What makes dentistry different?”

“He basically let me look over his shoulder for a day and shadow him,” recalls Ezell, founder of Fairpoint, Ala.-based PointClear Networks. “It allowed me to see how the technology we installed impacted their workflow, and to identify places in their workflow where technology could help them.”

C.J. Ezell, PointClear Networks

3. Survey the Landscape

Like any good venture, a vertical industry focus should be based on some essential market research data. Goldstein, for example, didn’t know there was a federal courthouse near his office, which meant there were many law firms nearby.

“I believe in the concept of concentric circles,” Goldstein says. “You do a five-, 10-, and 20-mile radius of your office. If you’re near a hospital, there are doctors’ offices. If you’re in a residential-type district, there are a lot of nonprofits or churches, synagogues, and mosques. Figure out where your concentration is.”

4. Get in Good with a Vendor Rep
According to Ezell, LOB software sales reps can make lucrative partners. “We figured out early on how to approach sales reps and say, ‘We want to help your clients make their practices more successful.’ It’s to their [vendors’] advantage to work with a local resource. We get leads all the time from vendor reps.”

About the Author

Geoffrey Oldmixon is a freelance writer based in Western Massachusetts.

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