Identifying Profitable Verticals To Market Your I.T. Services To

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It might seem like the most appropriate strategy for identifying appropriate vertical markets to focus your marketing efforts on would be to look at your existing clients, determine how many clients you have in each vertical, and then select your top two or three.  The potential problem of this method is that you may have many clients in a poor vertical right now, and it wouldn't make sense to focus your efforts on a vertical market that isn't performing that well.

Additionally, you don't want to focus on a vertical that has more users than desktops, such as the manufacturing industry.  It's true that the manufacturing industry has some of the largest head counts within any vertical market, but having a large number of people does not mean they have a large number of computers or servers to support them.  In manufacturing, often the opposite is true – there are more people than computers in operation and, barring some exceptions, this may not make it as profitable a vertical to focus on in the SMB space as others.

There are several perspectives you will want to consider when choosing which vertical markets you plan to focus on, including:

  • The vertical's ability to pay for your services
  • The number of prospects in your target vertical found within your desired service area
  • The suitability of the vertical's environment for your services
  • The vertical's gross revenues and number of desktops
  • Your own familiarity with the vertical
  • Your ability to deliver your marketing message to them at equitable cost.

Determining if a Vertical is a Good Return on Your Investment

Part of the process for selecting a vertical market involves your ability to market to that vertical at an “equitable cost”.  This means that the cost of marketing to the vertical will offer a good return on that investment.  If it costs a few thousand dollars to purchase a qualified list of leads within your target vertical, send out your direct mail and make follow up phone calls to set appointments – the ability to set 10 appointments from the effort might translate into a good return on your investment (ROI) and therefore a good choice for a vertical market.  Why?  Using strong marketing strategies for managed service providers may result in obtaining several new Managed Services Agreements for every 10 appointments you set – and as you know, each new client can be worth thousands of dollars per month for your business.

For more information about how to identify your vertical markets, start reading on page 21 of The Best IT Sales & Marketing Book EVER!

Erick Simpson
MSP University
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