Local government, education, and healthcare represent opportunities for dealers.
According to Investopedia, companies selling into vertical markets are attuned to the needs of customers in specific and often narrow industry segments. While some companies cater exclusively to the needs of a specific vertical, office technology dealers have the flexibility—and even luxury—of catering to the needs of several.
Chelsey Bode, chief executive officer of Pearson-Kelly Technology, identified financial institutions, religious organizations, legal, manufacturing, and healthcare organizations as prime vertical markets for dealers. Agreeing with Bode was John Fahey, vice president for dealer channel enterprise accounts at Konica Minolta. “The top two vertical markets are healthcare and education. Healthcare is the country’s largest employer, the most regulated, and has the highest click-per-employee opportunity. There is also a large opportunity for cybersecurity-related solutions and services. Many dealers already have great experience in the education vertical and could expand their reach.”
“There really isn’t a single vertical that makes more sense than others,” added Erica Calise, director of corporate and government marketing for Sharp. “Dealers tend to sell into vertical markets that they feel are more approachable and where there is a greater comfort level. Local government, education, and health care comprise major opportunities for our industry and represent a lot of the industry’s print volume.”
As you’d expect, there is a catch. Don’t make assumptions.
Never Assume
It’s easy to think all your customers use their printers, copiers, and MFPs in the same way. Never assume. There is often business to be had by learning about and addressing customers’ unique needs. According to Precision Marketing Group, a Massachusetts-based B2B marketing agency, treating all prospects the same way often misses opportunities for building deeper connections and increased sales.
For example, you may already sell to customers in some vertical markets, such as school departments or town/city governments, and public services. It’s relatively easy to sell and install the boxes, but there may be ways to go deeper than basic printing and copying, such as selling large format printers and trimmers, offering document management and ECM software, and more. Equipment and software vendors are ready to help dealers cast a wider net. “We’ve relied on OEM partners for the resources to educate our teams,” observed Pearson-Kelly Technology’s Bode.
Where to Begin
Start by learning what a customer want to do that they cannot do now or which of their projects require process exceptions or incur additional expenses. As a very basic example, the posters on the walls in a school or local zoning maps on the wall of the planning office in a town hall may present an opportunity for offering large format printers in places where you have placed smaller machines. Ask how the posters or maps are produced and in what volumes and sizes.
Go a step further and think about what other applications a customer or prospect may have that would benefit from larger-sheet sizes. Does a customer or prospect not print something because the commercial printer down the street charges too much or has long turnaround times? Would the customer print larger sizes more often if they had in-house capability? If you aren’t already selling wide-format machines, for example, this might be a starting point for a kind of verticality that can be extended to other schools and towns. The local commercial print shops may not be happy, but your checkbook might.
Get Vertical Market Specific
The allure and potential of vertical markets and the decision to focus on any vertical is tied to understanding your customers’ industries. This includes pain points (which likely vary by location), being comfortable with the language, jargon, terminology, and understanding of regulatory or compliance challenges facing that vertical. As with any purchase decision, be sure to ask about budgetary constraints and key players who would need to sign off in the decision process.
You already know the internet can be an excellent resource for initial training. Follow that up with help from a vertical market sales expert. Kate Kingston, president of Kingston Training Group, for instance, encourages searching TED talks, YouTube, and more as stops for finding out about specific markets. “Understanding how a specific industry addresses compliance, remote accessibility, cybersecurity efficiency, and profitability will ensure prospecting, in-person meetings, and partnership reviews provide value to customers, helping secure and keep more new business,” emphasized Kingston.
The accumulated knowledge is all valuable. “Dealers need to train their sales staff on the talk tracks used within verticals and learn the ins and outs of the contracts that are available to them,” noted Sharp’s Calise. “Dealers can get this info from their vendors’ reps or by reaching out to executives who have been in those verticals.”
Vendors usually have knowledgeable professionals in the dealer channel who understand the nuances of verticals, the technologies needed, and often workflows currently in use.
“The trick is understanding the needs and pain points of a given vertical market,” explained Robert Covington, senior product manager at Toshiba America Business Solutions/. For instance, you may have machines placed in law firms or medical practices. Document management, billing, ECM, or managed print services may be attractive to such firms. For instance, the medical or legal ECM software already exists that would deliver the security a company needs for client or patient billing.
Partnering with equipment and software providers is increasingly common and important these days, so you don’t need to be an expert to resell a product you obtain from a third party. Often, a vendor can help close the deal by helping differentiate your dealership and its offerings from those of a competitor or the commodity A4 devices sold at Staples, Walmart, or Amazon. Word has a way of getting around, and as the vertical nature of your business increases, so do market perceptions of its value. As this happens, ask yourself what other verticals hold opportunities for your business.
Expertise in Vertical Markets Essential
“Many dealers appoint vertical market specialists who focus on a particular vertical and how to go after it,” said Toshiba’s Covington. Some dealerships have vertical market experts to assist salespeople on calls. Such specialization can make the deal. Then, this person can be the one who works with customers to build the needed solutions.
Although every opportunity is unique, repeatable success is more likely when your team can demonstrate vertical market expertise. It’s critical your expert has hands-on experience and not just experience selling MFPs in the market. “In our experience, trying to make a territory rep into a vertical expert has been a waste of time,” acknowledged Pearson-Kelly Technology’s Bode.
Is It Time to Focus on Vertical Markets?
The vertical markets that are right for your dealership depend on the marketplace, the size of your operation, and the emphasis you place on vertical markets. “Some small and mid-sized dealers have found a niche in a particular vertical market and made that vertical their business focus. Some larger dealers have dedicated reps for specific vertical markets,” said Sharp’s Calise.
Find the fit that is right for your business, and maybe start with the vertical market where you already have a foothold. Then keep going up. Verticals present opportunities for all sizes and types of dealers. “Dealers that have verticalized will benefit from a strong aftermarket and enjoy more solutions and services revenue,” said Konica Minolta’s Fahey.
Is it time for your business to go vertical?
