What are Business Verticals?

If your company is dedicated to the sale of services, it is important that you know the Concept of business verticals. Why is it so important to apply it in your company? Because it directly affects your business results and proposing a good vertical strategy can mean big changes in your turnover.

In the next few lines I will tell you about the different advantages of this strategy and how it can improve your trading results.

What are Business Verticals?

Business verticals are still an organizational strategy within the sales channel. Verticals can be grouped both in sectors and in products or services.

To better understand it, it would be like that previous segmentation of a database to which you are going to send an email marketing campaign. To each segment you send a slightly different text or content to be able to personalize the message to your potential customer much better.

In the same way, verticalization is a criterion for personalizing the experience. Let's use a digital marketing agency as an example.

Example of Business Verticals

Digital marketing agencies have different types of services such as SEO positioning, SEM, digital analytics, inbound marketing, social media management, etc.

In that specific case, a vertical would be each of the different services offered by the agency. Another vertical could be the different markets it operates in or the different sectors of its customers.

We can group the different verticals to create new, much more specific ones:

SEO consulting.
SEO consulting for SMEs.
SEO consulting for SMEs in the food sector.
SEO consulting for SMEs in the food sector in Spain.

And even if this agency has technological partnership agreements with different SEO tools, each of the above could also be included as a separate vertical.

Advantages of Business Verticals

1. In the end, specialization always tends to result in greater commitments on the part of clients. By personalizing the experience more, the customer has a better perception of your service.
2. Thanks to verticalization, you can organize your sales network much better without them competing with each other. Each sales representative has their clear objectives for vertical areas of action.
3. On the other hand, segmenting communication to different areas allows you to focus on those verticals that are most profitable for your business. In this way, focusing most of the resources due to the profitability of the verticals.

Disadvantages of Business Verticals

1. If the vertical region or country is one of your main focuses, unless you have a digital service, it will significantly increase your operating costs.
2. A sudden decline in market size could be a risk factor for some verticals. That's why it's important to have your business verticals well diversified.
3. When choosing vertical business objectives, the concept of “making everyone happy” must be sacrificed. We will have to focus on the most profitable verticals and that may result in losing certain potential customers from other, more generic services. Specialization requires certain sacrifices, such as the fact that the sales funnel is much narrower by the top of the funnel (TOFU).

If you're thinking about improving any of the verticals of your business, customer experience can help you with all of them. As implementers of technological solutions, we can help you with any project in Customer Experience and Employee Experience.

Write to us at hola@izo.es and we'll be happy to help.

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