IT and Business Insights for SMB Solution Providers

Leveraging Vertical Markets to Build a Successful Practice

Once you have a proven solution for a particular vertical, you can use it as a template to pitch other companies in the same industry. By Bill Hersh

Differentiating yourself as a reseller is always a challenge for the independent VAR looking to compete against larger-tier entities. It is therefore vital to develop a strategy that will deliver a competitive edge and make it easier to convert leads into customers. One way VARs can distinguish themselves is by offering solutions for specific vertical markets.

Once you can produce a proven solution for a target vertical—for example, healthcare, education, government, legal, real estate, or financial services—you’ll be able to use that solution as a demonstrated template to pitch other companies in the same industry. Many VARs find that the better they can communicate in the specific language of a vertical, the better response they receive from potential customers. It allows end companies to more immediately understand the value of your offering, and more quickly engenders end-user trust.

Here are some tips for developing a vertical market strategy:

Do your homework. Identify a market that makes sense for your business model and thoroughly research that space. Interview target businesses to discover their pain points and IT needs. If a company is forthright about its requirements, terrific—you’ll learn exactly what you need to deliver. If you encounter a business that doesn’t know what it needs, that opens up an opportunity to offer a business assessment to determine the scope of the project. In fact, many resellers offer a free or discounted network assessment as an “in” to pitch potential customers.

Establish your value. Clearly communicate the unique value that your service brings to the vertical solution. Establish yourself as an expert and back up your claims with unambiguous knowledge from your research. If you approach a vertical market as an IT generalist, you will waste not only your time but the opportunity.

Respect regulations. You must be familiar with the regulatory environment of the market you have selected. Verticals such as healthcare and education are especially subject to complex federal, state, and local regulatory oversight. However, an IT provider can become a prized partner by showing the end user how to cost-effectively meet requirements and remain compliant. Conversely, if you are not well versed on industry regulations, you can become a liability to both yourself and your customers.

Integrate with back-office systems. Every industry utilizes business applications and back-office systems that are the gold standards in their fields, including accounting, ERP, and CRM suites. Build relationships with vendors that support the favored hardware and software in your chosen vertical and learn how to incorporate those systems into your offering. This way, a VAR or MSP can intrinsically build around crucial parts of the customer’s operation, instead of being limited to the traditional IT side.

Leverage partner resources. Manufacturers, distributors, and even government agencies often provide partner resources to help resellers enter new markets. Many individual channel companies offer information on the education, government, and healthcare markets, especially regarding HIPAA (Health Insurance Portability and Accountability Act) regulations, which apply to all entities with access to patient records.

Vertical markets offer opportunities for growth and expansion. The effort to build expertise and develop a specialty is surely worth the exertion. So get to work identifying a target market and see where that specialization takes you.

BILL HERSH is solutions coordinator and co-founder of the solutions specialist team at D&H Distributing Co., a Harrisburg, Pa.-based distributor that specializes in SMB solutions.

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