B2B Selling and Industry Marketing
I would argue that B2B sales and marketing is vertical by definition. This is true even for horizontal companies at the bottom of the stack. In fact, my first marketing role was doing industry marketing for Bay Networks. Our industry efforts were highly effective and appreciated by the field and product teams and the last time that I checked routers are routers………
When I think about the core functions of marketing:
- Segmentation
- Use case definition
- Value proposition creation
- Positioning and differentiation
- Partnering and product development
- Sales enablement
- Lead and awareness generation
I’m hard pressed to think of examples where vertical, or industry, marketing hasn’t played a role. Understanding the customers business is so fundamental to selling that effective messages end-up vertical whether that translation is done by marketing, the sales team or the customer champion.
Likewise effective strategies are driven by the customer’s business drivers which again means understanding industry segments, trends and triggers.
The problem with industry marketing is that its often too complex to tackle for small and mid-size technology companies. The end result is typically over focus on a single vertical segment, and platform (vs. application) selling in non-core markets.
This is a shame since vertical marketing is extremely effective and relatively easy to do. The key is twofold:
- Experience across industries and within key sub-segments
- Getting the horizontal and vertical marketing/sales mix right
Experience goes a long way in getting the company’s focus, positioning and messaging right. It also is fundamental in getting the horizontal/vertical marketing mix right.
To illustrate how experience provides valuable short-cuts to decisions and focus and then helps with the key marketing and sales content, I’ll use myself as an example.
Platform Computing is a horizontal middleware company that sells into many industry segments including:
- Semiconductor and electronics
- Finance, banking, insurance
- Manufacturing:aerospace, automotive, industrial, consumer goods
- Process:pharmaceutical, biotech, chemicals (energy, consumer & industrial)
- Media, gaming, web2.0
- Government: defense, environmental research, scientific research
- Education
As CMO, I effectively had 4 marketing plans to support our key business goals:
- Installed base (all verticals) with emphasis on top 100 accounts
- Financial services (both installed base existing products and new enterprise products (cloud, big data) for new accounts and the installed base
- Channel with emphasis in Education, Biotech and tier 2/3 manufacturing
- Enterprise data centers (non HPC) for cloud and big data
Obviously, there is overlap across these segments and plans but organizationally we were set up to sell this way, so it made sense to plan our marketing this way.
So when I’m with the financial services team I can’t just think about finance, banking and insurance. I need to understand the differences between pension and hedge funds, the differences between retail banking and investment banking, and the differences across the lines of the insurance business.
Likewise, the industrial segment of manufacturing is not a segment per se, its power equipment, transportation equipment/vehicles, factory equipment, etc.
If I need to waste time understanding those businesses, macro-level business drivers, trends and triggers, then I can’t do my real job which is AIDA (see marketing A-Z under advertising) oriented program and content development.
Similarly, if I don’t understand how the ‘tape-out’ process in semiconductors is different than derivatives pricing in finance or mortgage risk analysis in banking, I can’t be an effective management team representative for our markets.
However, since I’ve sized and segmented and sold to 4/5ths of Platform’s market segments in more depth at previous companies, I could use my application-space knowledge to provide more focus and contribute relationships. It also freed me to concentrate on the right platform/application messaging within those industry segments.
The point is that while we weren’t big enough to support dedicated industry marketing (separate from field, corporate or product marketing), we did a good job (thanks to lots of great work before I joined) of industry marketing as part of field, corporate and product marketing.
While I used myself as example, the rest of team are also had both industry and functional expertise which enabled us to easily adapt and use our horizontal plans and content vertically.
The bottom line is that in B2B, you can’t escape vertical marketing so consciously build a team with complementary functional and industry experience. This improves your ability to scale horizontally while insuring sub-segment traction and even dominance. You can have your cake and eat it to but the old adage of ‘good, fast or cheap, pick 2’ comes to mind. Hire a team with deep experience and you’ll get good and fast and over the long-run it’s probably cheaper too.