Key points to consider when going vertical
Channel business leaders share insights into the risks and rewards of operating in specific verticals, the criteria they consider when selecting their targets, avoiding pitfalls and capitalising on niche opportunities.
JALPA SHARMA
MD, DBSL
In the crowded marketplace, differentiation is key to sustainable growth. Rather than casting a wide net, consider niching down and becoming the unparalleled expert in a specific customer segment or industry. This allows you to intimately understand your target audience's unique challenges and tailor your solutions to their needs. The rewards include loyal clients, premium pricing and stronger reputation. Navigating a niche market requires more than simply narrowing your focus. It needs thorough market research, a deep understanding of your target audience and a willingness to adapt and stay ahead of the curve.
PETE JURY
INTERIM MD, ELITE GROUP
Niche markets are smaller, potentially limiting growth and making your business reliant on market trends or regulatory changes. Therefore, ensure you deeply understand the market. When selecting a market, collaboration is key. Do your research and have experts to advise and guide you. Ensure your vendors have the skills and expertise to help you. By understanding the market, you can find areas of high demand and low competition. Over the past decade we have provided unique solutions in many verticals, including travel, retail, automotive and contact centres. We listen to their needs and deeply understand the problems they aim to solve and the benefits they seek.
MARK BODEN
SALES & COMMERCIAL DIRECTOR, FIRSTCOM EUROPE
Key to gaining a competitive advantage in a particular marketplace is aligning customer need with service and product. It's no good bending your business to fit something you aren't suited for. So, our prime driver is finding a niche we can really deliver a difference to. You also need your vendors to buy into that integrated service and product offering. A recent example for us has been the drive to be part of the NHS’ Better Purchasing Framework providing cloud-based telephony services to GP surgeries. It suited our customer profile, skill set and product suite so we can help the vertical to be more efficient.
MARK WILKINSON
GROUP COMMERCIAL DIRECTOR, RAZORBLUE
Navigating niche markets presents both challenges and opportunities due to the diverse landscapes of various industries. In the manufacturing sector our team ensures compliance with stringent health and safety regulations. We also understand the intricate legal frameworks governing financially regulated industries such as pensions and accountancy firms, and the critical importance of cybersecurity in healthcare. Cultivating strong vendor relationships remains pivotal for our benefit and for enhancing the support we offer our clients. Utilising your wider support pool is something I would push all businesses to do. Continuous learning is also paramount. Ensuring teams remain abreast of industry developments is how we can continue to support niche requirements.
PAM BLANCHARD
DIRECTOR, ICA
Specialisation in niche markets allows companies to develop deep expertise and a nuanced understanding of specific customer needs. For UCaaS and CCaaS providers, this means understanding the intricacies of integrating communication platforms and contact center functionalities to deliver seamless and efficient customer experiences. Customers are more likely to remain loyal to a provider that consistently delivers tailored solutions that precisely meet their requirements. This loyalty can result in long-term contracts, repeat business, and a strong reputation within the industry. Train staff to understand the specific needs of niche customers and establish robust support channels to address their concerns promptly and effectively.
JAMES GARGARO
HEAD OF SALES FOR HEALTH, DAISY COMMUNICATIONS
Specialisation in niche markets can provide a competitive advantage but can also pose a number of challenges. Daisy Patient Line being specialists in the NHS/Primary Care sector means that we have to provide 365 support for GP practices who require a lot more care than the average business. Focusing on support is so important in this vertical which is why supplier relationships and product development have been key to Daisy’s popularity in the health sector. Resellers need to ensure that they have the support levels required for this market and not just the usual 9-5 levels.
JAY BALL,
CEO, FLOTEK
Niche specialisation enhances competitive advantage by fostering expertise, client trust and tailored solutions beyond just pricing. Finding unique selling points is difficult until you spend time within the sector and see first-hand their challenges. However, once understood the benefits are unlimited. We usually discover a niche via acquisition, meaning the understanding of the market and how to fully penetrate the sales process is already there. Be conscious that a market sector downturn can have a large impact across your overall business if you allow the sector to take too much share. Our focus is to add sector niches to our overall market stance so we’re never reliant on certain sectors.
RICHARD SCOTT
SALES DIRECTOR, START COMMUNICATIONS
Whether it be bespoke integration into a CRM, pulling omnichannel data together into an interactive data visualisation software, or simply having experience and a track-record within a market, all these things are an advantage to a reseller and can lead to more business. Relationships with vendors are critical to winning in niche verticals, specifically with ones that have experience and pedigree within the sector. When something is non-standard, that is when you need extra support from your vendors and that comes from having a strong working relationship. Resellers should consider the market size and their dependency on a single niche or vertical as specialising too narrowly in one vertical can leave you vulnerable to economic or industry changes.
FRASER FERGUSON
FOUNDER AND DIRECTOR, KUBENET
Breaking the cycle of prospects buying from established vendors can and will be rewarding. Ensuring that you understand the sector is important and having a strong USP that will interest them is key. If you’ve built a solution from the bottom up, then you’ll already have identified a niche market for your offering. Being able to demonstrate the benefits, allied with a service wrap that differentiates you could give you a competitive advantage that established competitors may not have. The big guns will come out fighting so be prepared for that. Start with clients where you can deliver and spend time tweaking for potentially low or no margin, build from there and hopefully the reputation will follow.
PAUL HOOPER,
MD, UPLANDS ONETELCO
Tailoring products or services to meet the needs of a niche differentiates you from broader competitors and less focused campaigns, but these markets often have limited size or may require specialised knowledge. Success factors include a deep understanding of the vertical, agility to adapt to changing demands and effective marketing to reach your target audience. Identifying lucrative niche verticals involves market research, analysing trends and considering factors like growth potential and competition. Partner and supplier relationships also play a crucial role in going niche as strong partnerships can provide access to specialised products, support and resources. You should watch out for pitfalls such as overestimating demand, neglecting broader market opportunities or becoming too reliant on a single opportunity, partner or supplier.
JAMES ROUTLEDGE
SALES DIRECTOR, GLOBAL 4
Knowing a sector inside out offers an advantage over competitors as you can provide a solution that often increases revenue while mitigating potential typical challenges that others wouldn’t know about. You face entering a market where everyone talks, so you must make sure you not only do a good job but also provide fair and reasonable pricing. This allows for recommendations and a greater footprint with a lower cost of sale. Enter for the long-term and provide case studies or references as the circle is often smaller than you think.
IAN DUNSTAN
MD, COBALT
Vertical markets are constantly appearing for us. Innovative and agile businesses will be able to evolve quickly as they are spotted and targeted. A niche we operate in is primary and secondary schools in rural areas where we deliver a solution based on pain points. Our relationships with our vendors are crucial to the success of how we can tailor our solution to niches. The key to working with the niche markets is that your product and customer service must be exceptional. The margin is often higher, but many of the customers know each other so for us this is an opportunity as they all talk.
DAVID WARDELL
DIRECTOR, EVOKE TELECOM
These days, the comms sector is like Race Across the World, with teams ending up on the same bus, and ultimately arriving at the same metaphorical checkpoint. To differentiate is to steal a lead, but to specialise brings about a risk versus reward conundrum. Competitive edge, higher margins and brand identity, versus, in-house skill sets, market fluctuations and dependency risk, all must be evaluated. The answer lies with innovation, differentiated alternatives, advantage and tangible benefits across the value chain. With innovation one can be fleet of foot as opposed to being tied to ‘the wheel of niche’. The secret is less vertical and more difference.