Go Vertical Young Man7 May, 2013 By: Tom Callinan, Strategy Development
I have extoled the benefits of territory design since I started consulting eight years back for the independent channel. In those eight years a lot has happened in our industry, including the decline of unit placements and prints and the more widespread adoption of industry developed applications and the proliferation of mobile in the workplace. Another change, maybe not as visible to the independent channel, is that the large direct operations have moved to a vertical market approach.
Picture this, the sales professional from one of these direct operations is calling on the CIO at the large health system that has been your account for the last ten years. That direct operations sales professional is well versed in the HITECH Act and knows the hospital systems new EHR system. The conversation is centered on the paper forms that have gone electronic over the last two years as result of these two changes and what future changes are planned. Because the direct operations rep covers a region and calls on numerous hospital systems they drop ideas about how some of their other customers are using technology to change how they handle paper.
A week later your sales professional meets with the same CIO; they’ve met many time before and she simply expects to remind him that his lease is expiring in seven months and discuss the newest features of the latest model of devices. As a differentiator, she presents retaining some of the low volume equipment to “keep the price down and her commission up.”
After the normally congenial part of the conversation the CIO asks your rep what the other hospital systems she works with are doing around HITECH. If this rep is like every other rep I’ve asked in the industry she will have one of two replies: “What is HITECH” or “Do you mean HIPPA.” At that point the CIO has made a decision that he needs a new supplier. Your fate is sealed you just don’t know it yet.
I can all but assure you that the above scenario is playing out across the US every month. That doesn’t mean that it has to continue. If you truly want to “sell solutions” the first thing you need to do is understand the business you are selling to. If you are a dealer principal or executive in a company, think about somebody coming in to sell you something and they barely have a clue how you use it in your business. They treat it like a commodity.
Let’s say they have some new proposal generating software and they’re giving you their canned demonstration that shows a finance interest rate. You think the software has some merit and ask what seems like an innocuous question, “How do you change that to a lease factor.” The sales guy replies, “We don’t handle leasing, do you need that?” That sales professional doesn’t understand your business and he is done, and wasted both his time and yours.
There are vertical markets that provide you with an outsized sum of images. Just about anybody can think of the print for pay scenario; you may not be able to get them financing but they are quick to come to mind! Another well know vertical is K-12, although they certainly aren’t a high profit area for dealerships these days.
If I were setting up vertical markets where would I focus?
• Medical. The industry is under high regulatory constraint as well as market driven change. These factors translate into significant opportunity.
• Higher education. These institutions are local, not driven solely by cost, and buy a lot of devices
• Financial service/Insurance
• Business service
Graphic arts, like service bureaus, are key if you have a production product line and in a metro area with a solid population of these businesses. Pharma is also a key vertical, but concentrated in a few markets in the US.
I’d start with one or two of these verticals and I would develop vertical marketing kits. What is a vertical marketing kit? It is essentially all of the business knowledge you can gather on a certain vertical market.
Some of the key items you would want to understand are regulatory requirements, mission critical documents, common software applications, size of industry and the relative size of the competitors. This is in no way a comprehensive list of attributes but I’d venture to say that you could spend 40 – 60 hours on research simply to have a comprehensive list of the four mentioned. Multiply those by two and you’re at 80 – 120 hours. Then you have to translate that information into business situations you can address to sell your services and products.
Once I have the information I need for my sales professional to have a deep understanding of the vertical I would take them through a rigorous training program. The training sould have specific business examples with talking points; not just features, advantages, benefit talking points... but what business case might be uncovered and then peeling back that business case to five or six levels. Your sales professionals need to be able to have a business case discussion with senior managers and executives at prospect companies.
The industry is going vertical; you can lead the way or follow at your own risk.
Tom Callinan, Principal, Strategy Development, a leading consultancy specializing in business planning, sales effectiveness, advanced sales training, operational & service improvement. A former VP and GM of IKON’s largest business unit, Callinan was founder/CEO of Copifax, Inc., a copier dealership later acquired by IKON in ‘97. He graduated with high honors from The Wharton School, University of Pennsylvania. At Callinan@strategydevelopment.com/www.strategydevelopment.com