What Are Business Verticals? - IZO

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What Are Business Verticals?

Blog

10-11-2021

If your company is dedicated to services sales, 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 a good vertical strategy can mean big changes in your turnover.

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

What are Business Verticals?

Business verticals are simply an organizational strategy within the sales channel. Verticals can be grouped into sectors, products or services.

To understand it better, it would be like the 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 in order to better personalize the message to your potential customer.

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 clients.

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

SEO consultancy.

SEO consultancy for SMEs.

SEO consultancy for SMEs in the food sector.

SEO consultancy for SMEs in the food sector in Spain.

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

Advantages of Business Verticals

In the end, specialization always tends to result in greater client engagement. By personalizing the experience, the customer has a better perception of your service.

Thanks to verticalization you can organize your sales network much better without them competing with each other. Each salesperson has their own clear objectives and areas of action by verticals.

On the other hand, segmenting communication to different areas allows you to focus on those verticals that are more profitable for your business. In this way, you can focus most of the resources on the profitability of the verticals.

Disadvantages of Business Verticals

If the region or country vertical is one of your main focuses, unless you have a digital service, it will significantly increase your operating costs.

A sudden decrease in market size could be a risk factor for some verticals. This is why it is important to have your business verticals well diversified.

When choosing business objectives by verticals, the concept of "pleasing everyone" has to be sacrificed. We will have to focus on the most profitable verticals and this may result in losing some potential customers from other more generic services. Specialization requires certain sacrifices, such as the sales funnel becoming much narrower at the top of the funnel (TOFU).

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

Write to us at hola@izo.es and we will be happy to help you.

Author: Mario Rodríguez,

Digital Marketing Manager.

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