What exactly is Vertical Marketing?
Visualize your marketing model as the root system beneath a tree. The trunk is the broad category of your industry, which then gets subdivided into narrower branches. These branches might be your specific services or product categories. For each branch, you have an ideal customer. Vertical marketing targets these smaller branches. It is sometimes referred to as niche or micro-marketing, or program marketing in the insurance industry. The trick is to identify your ideal customer and then take advantage of untapped sources. Savvy marketers consider vertical marketing one of their most valuable marketing techniques.
What are the advantages of Vertical Marketing?
There are several advantages to using vertical marketing. The ultimate benefit is separating you from your sea of competitors. Figure out what you offer that nobody else does. Target the audience that would be most receptive to that service or product. Then, as you learn your customer, you can better serve their needs.
You speak the language of the market.
Establishing credibility is a proven successful sales technique. Become the sector leader and gain brand recognition. You can do this with quality content. Videos and blog articles are good ways to communicate information from your website. Send out emails with updates and let your clients know what’s new in your industry. Show them that you are on top of things. The idea is to become their go-to resource.
Become a big fish in a small sea.
Operating in a large, competitive market costs both time and money. Vertical marketing can level the playing field. Since you are concentrating on smaller groups, you won’t waste resources. Targeted communications should have a higher response rate. Conversions are easier because buyers in a niche market are closer to making a purchase. Therefore, it takes less effort to move them to a final commitment.
Fish where particular fish are biting.
Vertical marketing places you directly in front of qualified customers. It associates you with trade groups, trade shows and conferences. It is more likely that you will show up in search results online, (pay-per-click is an excellent way to target a specific audience). Search Engine Marketing experts can sift through your client data and craft the perfect ad for reaching quality leads. In the end, the return on your investment outweighs the cost of the ads.
Concentrate your focus.
Operating in a niche market gives you the opportunity for a unified strategy. It shines a spotlight on a particular target, both internally and externally. This effort makes delivering your message easier and more cost efficient.
Consider a battlefield. If you split your troops between three fronts, it is less likely they will win than if they are fighting on only one front. In short, by identifying niche markets, you can integrate all your marketing efforts and focus on one distinct market.
Restrict the competition.
Market leaders set standards for others. The right effort invested in a particular niche gives you a commanding lead in that category. It can insulate you against any competitive activity.
Vertical Marketing in the Insurance Industry
As an industry, insurance is ripe with vertical markets – typically related to as “program business”. There are thousands of markets available – from commercial insurance that targets particular industries to personal insurance that may target particular consumer segments. So, rather than tackling the very competitive insurance market as a whole, with a general mix of personal or commercial insurance, you might instead choose to focus on one or more vertical markets and develop a “program” that incorporates a special skew to a particular industry or industry segment. The good news is that the insurance market is ripe with opportunity. In fact, vertical markets exceed the overall growth of the commercial insurance segment.
Factors to Consider When Selecting Your Niche
After you select a vertical market, it’s time to consider these factors:
- Are you already conducting business in a particular niche?
- Do you have access to a carrier partner (or wholesaler) who can underwrite your efforts?
- Have you conducted research to prove whether the proposed market is for you?
- Does your vertical market lead you to offer services directly to the end buyer?
- Will you need to build a broker network and would it be more efficient to go direct?
- Can you forecast what your marketing expenses may be?
- Do you have the resources to succeed in your chosen vertical?
Evaluate Your Prospective Niche Market
You need to assess how your company can perform within a vertical market. This assessment requires a careful analysis of past performance and future potential.
- Is the market un-served or under-served?
- Is the market growing?
- Do you already have customers in the market who could provide a testimonial for marketing purposes?
- Is the market a good cultural fit for your staff?
- Do you need to consider licensing and liability issues?
- Are potential customers loyal and credit-worthy?
- Which tactics are available to drive immediate business?
- Is paid search engine marketing a possibility for driving leads?
Vertical marketing represents an exciting opportunity for your business. It could also be an answer to the depressed margins you are undoubtedly suffering in certain areas. However, there are a lot of questions to answer before taking the plunge. By doing the proper research ahead of time, you can improve your marketing efforts.
Our team at intouch Business can help you with that. We have the expertise. Let us show you how to improve your insurance marketing strategy.