What Are Vertical Sales?
Vertical sales are sales of a product or service to a limited number of market sectors, rather than to all markets. A manufacturing company, for example, might design and produce products tailored to the needs of customers in the aerospace and automotive industries. A professional services company might tailor its services to the needs of clients in the insurance and banking sectors. By contrast, a horizontal sales strategy is suitable for companies that market products that meet the needs of a number of different industry sectors. Companies marketing office supplies or maintenance services, for example, would operate a horizontal strategy.
Companies with a vertical sales strategy develop products and services tailored to the needs of groups of customers with similar requirements. By developing tailored products, they can differentiate themselves from competitors that offer products suitable for all markets. A defense supplier, for example, might specialize in a specific market niche such as components for naval vessels,
By organizing their teams according to vertical markets, sales managers can focus on increasing market share in specific sectors rather than spreading resources across all markets. To succeed in vertical sales, representatives must have an understanding of the specific needs, issues and challenges of the industries they target. Some companies recruit only sales reps with experience in a particular market to ensure they have the market knowledge and contacts to succeed. Representatives with a good understanding of industry challenges can become trusted advisors to customers, making it easier to build relationships and long-term customer loyalty.
Companies selling to vertical markets must make an initial investment in recruiting and training sales representatives and developing industry expertise. By developing strong relationships with customers, companies can increase long-term revenue and reduce the cost of sales. It’s important to identify opportunities for sales of additional products and services to customers in vertical sectors and focus new product development programs on those opportunities.
To support sales in vertical markets, it’s important to integrate marketing campaigns with sales drives. For example, advertising should aim to raise the company’s profile in the target sector as well as generating leads for the sales force. A company's website should include product pages focused on the vertical market, together with pages that describe the company’s capability in the sector.