Best Practices For Transition to Vertical Solutions Marketing – Part 1

Vertical Marketing System is a distribution channel structure in which producers, intermediaries and retailers agree to act as one to serve their agreed-upon target segment(s). There is clear value in having a single source of expertise that can provide an end-to-end, fully reliable, fully integrated solution which is also forward, backward and horizontally compatible with its current and emerging technology standards. A Vertical Solutions Marketing (VSM) approach has the potential to increase market share within the target segments, and total revenues, profit margins and customer loyalty, compared to the more traditional approach.

The transition to an ideal vertical solutions marketing organization cannot be accomplished in one step. Here are some of the best practices that need to be followed to do so:

Establish and communicate a meaningful strategic principle aligned with a VSM philosophy

Vertical solutions division is experiencing rapid growth and the importance of a strategic principle cannot be underestimated. Since the management cannot be involved in every decision the employees of the firm must be empowered to make choices and decisions based on a strategic principle known by all.

Establish strategic, structural, and systems mechanisms for customer orientation

Organizations need to implement strategic, structural, or systems changes in order to improve their customer orientation, essential to VSM. To facilitate improvements in each of these three areas, creating a separate, stand-alone organization may prove helpful. The mandate and key functions of such an organization would be focused on the selected vertical market, and on systems that support the vertical market. The key challenge for the firm is that the centralization and formalization of the old structure must not get recreated in a new form, and the ownership of the target VSM customers must be clearly transferred.

Match managers to the mission

Strategic missions provide a specific template for measuring the manager against the job. Certain people tend to be superior managers in rapidly growing and dynamic businesses but would be lost in mature or declining businesses. You must match the players to the game if you want to get the job done.

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