Get all the growth you deserve—deploy market takedowns in your targeted verticals
Executive Director of Strategy
Research from McKinsey suggests that you’re more likely to thrive if you act aggressively to capture market share now—during the downturn—rather than wait for the recovery to begin. Moving now, with a sharpened focus on customer value, can give you a first-mover advantage that other players can’t match.
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6 indicators that you need to refine your vertical marketing approach
This is where many marketing pros will say, “I already have a strong focus and I know my customers really well.” But if you check even one of the boxes below, you might not be as focused as you thought. And if you check several of them, it’s time to refine your approach to aggressively growing your verticals… now.
☐ You have less than a 5% share of the vertical markets you’re targeting
☐ You are not the #1, #2 or #3 vendor in any vertical
☐ Influencers don’t know you
☐ Publishers don’t seek you
☐ Sales says nobody knows your brand
☐ Your reference list is short and referrals are even shorter
For most marketers, at least two of these are true—and they probably mean you’re spread too thin. That means you don’t have enough budget, time, or focus to really know what your buyers need and add value. As a result, you wind up with:
- A higher cost of marketing per lead
- A higher cost of sales per lead—because your reps have to constantly relearn and do more research, and they likely struggle on solution selling
- A distracted R&D program
- A distracted management team
- Less growth than you deserve with the value you can add
Think about that last line. If your product truly delivers a greater bottom-line benefit, shouldn’t it lead the market? If it’s not at least one of the leaders, you’re not focused sharply enough.
Here’s the good news—more money is not necessarily the answer. (I know that sounds odd coming from a marketing agency, but it’s true.) With the right approach, every dollar you spend will generate higher returns—if you’re focused on the fewest possible markets in a way that creates increasing leverage for those dollars over time.
What’s that right approach? We call it “market takedowns.”
What’s a market takedown?
A market takedown approach is a bottom-up strategy that focuses your sales and marketing on narrowly defined market targets you can own and win. (Read this article for a more complete introduction to the market takedown concept, or watch our brief on-demand webinar.) Three critical components of a market takedown distinguish it from merely targeting a market.
1. You start by selecting beachheads—highly focused markets sized so you can own measurable share and carefully selected to be related to adjacent markets.
2. You don’t attack all the beachheads at once; instead, you start with your most important market—the one that is most adjacent to other critical markets.
3. You must connect emotionally to your buyers, shaping each offer of value to connect to buyers’ most urgent moments to stand out in a sea of sameness.
A market takedown approach gives you the best chance for driving focused results now and generating better returns as the economy pushes forward. Market takedowns give you a better strategy for focusing on and winning your best verticals, because they:
- Help you gain market share, not just revenue growth
- Concentrate your messages on more specific moments that matter (instead of general vertical problem statements)
- Build deeper expertise in your marketing and sales teams, driving better conversion ratios
- Increase brand awareness on fewer dollars through a more concentrated spend and more apparent connections to unique audience moments
- Generate a higher-value pipeline
- Eliminate management and R&D distractions on lower-value markets to win and drive investment where it matters most
Let’s dig into how you can devise a better vertical plan with market takedowns.
A 4-step plan for deploying market takedowns in your targeted verticals
STEP 1. Pick your best verticals
Start with the one to three verticals where you have the strongest distinct offers of value—the most attractive markets in which you believe you have the most competitive product/service offerings. These verticals must be small enough that you can win more than a 5% share with your realistic sales and marketing budgets.
For example, if you typically spend 10% of targeted revenue on marketing and you’re targeting $10 million booked in year 3, then pick a market size no larger than $200 million. This represents a 5% share.
The objective is to own a meaningful share—meaning you’re number 1, 2 or 3 in the market. (Jack Welsh, the famous chairman and CEO of GE, used to tell his management team that if they were not number 1, 2, or 3 in a market, they should shut it down.)
But you’re not done with selecting your vertical markets—now you need to validate your choices by completing the following phrase:
For buyers in [vertical name] who have the urgent need to address:
- Urgent moment #1
- Urgent moment #2
- Urgent moment #3
Only [my solution name] can accomplish [what?] for the buyer’s company.
The crucial part is filling in that [what?]. A CEO I once worked for said, “You don’t know what you’re offering until you can write the press release that goes out the day you hit your objective.” So, write that press release! It might even be fun to play with the wording to motivate your team and get the creative juices flowing.
When you’ve picked up to three verticals—well defined by your revenue objectives, your budgets, and a meaningful market share—they become your “clarified verticals.” Write your press releases and rank them by size/value and need for your solution.
STEP 2. Define a beachhead you can own and win
Inside each of your clarified verticals is a beachhead—a small border area that becomes a stronghold from which to advance into enemy territory. (That’s right—it’s a war out there.) Your beachhead market is smaller than the total clarified vertical, but it’s a critical subset in which you can quickly gain an even greater share. You have to own it; otherwise it’s not your beachhead. (The Allied forces didn’t just arrive at Normandy—they took it.)
Before you take that beachhead, though, line up multiple small, adjacent markets naturally related to your beachhead market; for example, small pharma companies in a certain market are related to larger pharma companies. Or you could define one initial part of a manufacturing plant as adjacent to winning the rest of it.
Adjacent markets let you stay focused, win a beachhead, then spring forward on the strength of references, referrals, case studies, and wallet share plays. The sum of succeeding in these adjacent markets and the beachhead must give you your targeted share in your clarified vertical.
STEP 3. Connect your value to deeply rooted emotional needs
Be honest—when you bought your last car, did you go for the least expensive car with the best gas mileage and lowest total cost of ownership? Probably not. More likely, you went for the car that “felt like you,” or made you feel proud, or was fun to drive.
If “ROI” created a strong emotional bond, we’d all be driving Honda CRVs.
Emotions are the driving force behind most buying decisions. The best value proposition in the world won’t stand out if you don’t create an emotional connection to your buyers and champions.
What’s more, according to the Harvard Business Review, an emotionally connected customer is worth twice as much as a highly satisfied customer. You have to connect with the emotions that make people buy. That means you must know your buyers, not your companies. You must know what works for them, the journey they prefer, and the urgent moments they experience in everyday life.
Connect your value in a uniquely human way and you will own your buyers’ moments, stand out in the sea of sameness, and take your most important step forward in winning the beachhead and being a leader in your clarified verticals.
STEP 4. Align budgets and tactics to pivot quickly and take share
The last step might be the most important: You must get funding for this grand idea.
Fund your beachhead plans bottom up, starting with a clear idea of your specific market math. Market math is defined by deal sizes, sales cycle durations, and the ratios from awareness through a closed deal. With these facts, you can reverse-engineer the flow you need through your pipeline to hit your targets for each year.
As you adjust your market math, you may have to adjust objectives, market sizes, and your specific beachheads. That’s fine—getting this right creates a foundation to deliver the right ROI for your CEO, your head of sales, and your product executives.
When you’ve got the math right, everyone knows the impact of changes in budget, requests for “new ideas,” and the impact of underfunding. (Watch for a coming article on how to model this math for your market takedown strategy.)
Align your budgets to support starting with one beachhead per vertical. (If you start with several, you’ll get distracted, thin out your budgets, and diminish results.) You should imagine your first beachhead market will run for a quarter before you take on another beachhead. And before you add beachhead number two, consider pursuing those adjacent markets first.
Your value in the market deserves more than modest growth that tracks industry growth rates. Your brand deserves to stand out and your organization deserves to win, not just grow. Start stronger in 2021—attack with market takedowns.
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Executive Director of Strategy