Vertical Approach: Taking Your Business To The Next Level
When we see great marketers ruling the world, we often admire their success and follow the techniques they are following. I think that’s where most of the startups make mistakes as the great entrepreneurs’ journey to the establishment were not as beautiful as it seems like today nor they applied the current strategies in their early days.
The vertical approach is a kind of theory which fits for any business models. To know how it solves the problem for the marketers, lets understand few problems first.
Imperfect leads:
Most of the time the question is, why it’s not happening? Marketers often question their own capabilities rather figuring out if they are hitting the right people at the right time for the right reason. No matter if a business is being promoted on physical or digital media, its truly required that the business is presented to the actual or potential market. If your business model is unique and requires a unique process for conversion then, most of the time the reason for the failure is incompatible presentation even if the idea reached to the right people.
Overkill:
Imagine this as your entire industry which can easily be figured by analyzing behavior, demography, geography etc. Now all of the boxes may be your entire industry but there are subgroups in some boxes where you would find it easier to approach and convert. Most of the time, marketers focus on the overall industry which overkills assets and resources of the company and in return the outcome is disappointing.
Business model failure:
Raising fund is a big time challenge for startups. Survival is the key to success. The biggest problem occurs when marketers stop believing in the core idea and turn to a bypass to recycle investments rather than focusing on establishing the idea of the business. The problem doubles up if marketers are focused on satisfying the board of investors than the core consumers and peers.
Scaling to the wrong direction:
The overkilling approach which basically means, holistically focusing the industry can’t be achieved with one single business algorithm and with small set of employees; as any industry by any means is widely spread and multi dimensional from many aspects. Which means, no matter if you know or don’t know about your approach is right or wrong, you have to scale up from the beginning at least to a certain level just to justify your marketing efforts.
The vertical approach:
To understand the approach, you need to consider the entire market as one pyramid. When you launch any product or service, generally you label the entire mass market as your biggest component. Also, your friends, family and the educated market who are aware of your product/service/similar technology turns into your smallest component of the market. Let’s say the bottom slice in the picture is the mass market where you need to educate and convert. The top slice of the pyramid is your nearest and educated market.
1. Pick up the cherry:
Its always easy for startups to focus on the smallest slice of the industry where the probability factor of conversion and penetration is very high. If you can present your business to this slice of the industry then, you are more likely to approach to the right people and convert them to your customer (as this portion of the market is considered as aware of similar brands/products/technology). Approaching to the educated market is also smart because it doesn’t require a massive set of resources to conquer the target and has more probability of conversion. It also has no chance of a high burn rate. When you are done with your efforts and plans for this slice, you basically end up either with success or failure. If you end up with a success, you are good to go to the next step and if you don’t, there is nothing to feel bad as you didn’t burn yourself out. You can always go back, tweak your product/service and comeback stronger.
2. Discover & learn:
If you are in this phase that means, you have passed in the first phase of the approach. It’s time for you to prepare yourself for some real game. Keeping patience and being grounded with solid workmanship in sketching proper plans is the core idea to survive the wave. You just cannot be overconfident on the result of the first phase and go for conquering the world. No idea is best for always and keeping that in mind, you need to prototype ideas and start experimenting to the market which is relatively bigger than the first one. Before entering into mass marketing you need to sample check your marketing plans and develop specific algorithms which has legitimate relationships in between the expenditure and earnings.
3. Go pro
Once you are done with setting up the best plan which has the best financial algorithm, you can go for massive application to the market. The risk factor for this phase is relatively lower because you came across two steps before and already refined your plans several times. Not only that, you also made sure that, the plan worked for the smaller sub-sets of market and your formula has attractive conversion ratio in respect to the expenditure. Now you can tweak your plans and applications to shape and validate it for the larger market, as it was never experimented in this scale before.
4. Scale up and sustain growth
Its time for you to go all in. Now, its far easier for you to focus on the entire industry and apply the technique you have validated. By now, your confidence level should be up high as you know about capabilities and techniques. The only focus on this phase should be sustainable development growth. Repetition of proven tactics is the key to take your business to the next level. This is a kind of stage where there is no mercy or looking back for mistakes. You shouldn’t experiment in this phase but capitalize your confidence and knowledge you gained from the previous steps.
No technique lasts forever rather it needs to evolve in respect to trend and demand. Your business might need newer techniques to retain customers and you may follow the vertical approach right from the beginning for new experiments.