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Vertical marketing: How to go big by thinking narrow

You've heard it before: Go big or go home. But bigger doesn't always mean better, whether you're talking about life or your target market.

In ad-world lingo, "horizontal marketing" is an example of a go-big strategy, where you market a wide range of products or services to an equally wide range of customers. This broader market spells potential for a larger customer base—which, in turn, signals a greater potential for profit. And when it comes to running a business, profit is the point!

But for many businesses, focusing on a narrower, niche market within a broader one—an approach called "vertical marketing"—is often a more effective strategy. Ready to take the leap? Let's dive in.

The 'vertical advantage': What is a vertical?

First up: business verticals.

Within the umbrella of any specific industry, you'll find several more specialized segments. Take the retail industry, where these segments include clothing, electronics, and home goods—as well as segments within segments, such as women's swimwear (or, if you want to go even more granular, an online store that only sells bikini bottoms).

Verticals in business, also known as vertical markets, refer to markets that serve customers within those specific segments. Businesses aren't restricted to just one vertical, either. For example, a clothing manufacturer might have verticals in women's swimwear, maternity wear, and wedding gowns.

Narrowing it down: What is vertical marketing?

Vertical marketing is a strategy that focuses on marketing to a group of customers within a narrow market segment.

Our clothing manufacturer from above could, for example, use a vertical marketing strategy to showcase their three verticals, each of which has its own distinct set of retail advertising needs. There'll be some overlap, but the typical consumer looking for women's swimwear won't necessarily be in the market for maternity clothes or a wedding gown.

This is where vertical marketing shines: Within each vertical, the manufacturer will have specific goods and services as well as targeted marketing processes. This means the company can streamline and coordinate their marketing efforts within each vertical for a more effective reach into these distinct groups.

Getting focused: What vertical markets should your business target?

Before you jump into creating a vertical marketing strategy, you'll need to define the vertical market you want to target. Thoroughness counts here—target a vertical that's not a great fit for your business, and no amount of marketing will transform it into a better fit.

Examples of vertical markets

No matter what industry you're in, chances are you have a few business verticals within your broader market to choose from. Here are a few examples for inspiration:

  • Home goods and furnishings: Kitchen and dining products, bedroom furniture, outdoor furniture, home office furniture, and home decor are all examples of vertical markets within the broader home goods and furnishings retail market.

  • Mobile communications: Examples of vertical markets within this wider market include cellular network services, mobile broadband, mobile app development, and mobile payment services.

  • Wealth management: Verticals here include retirement planning, high-net-worth families and individuals, institutional investors, and philanthropic planning.

How to define your vertical market

You know your company inside and out, so you likely have an idea of what verticals work best for your business model, and as the seasons change so do your marketing needs. Therefore, defining your vertical market and your seasonal marketing strategy is crucial for staying ahead of the curve. It's smart to take a step back and objectively evaluate the market, your customers, and your business, too, so you have solid data to back up your assumptions.

Consider your product or service. Ask yourself questions including, "What are the unique selling points of my product or service? How do our features compare with those of our competitors? What problem does my product or service solve? What segment of my market would be most interested?"

Conduct market research. From industry trends to competitor analysis and market potential, research will help you fill in the gaps and identify the right direction for your business. For example, is there enough demand within the vertical you're considering? And how accessible is this market?

Crunch the numbers. Time to stretch that budget. Ask yourself, "What's the cost of throwing your hat into a particular vertical? Do the numbers align with your budget? Are there potential limits on growth within the vertical?"

Reap the benefits of vertical marketing

Remember go big or go home? With horizontal marketing, the larger market offers the potential of a larger customer base. So how can a vertical market strategy be more effective?

It builds stronger customer relationships. Whether it's a deeper understanding of customers' pain points or the ability to better personalize customer interactions, a smaller market makes it that much easier for you to focus your resources on nurturing customer relationships.

It can create a competitive advantage. With vertical marketing, you can get to know your customers' needs inside and out—giving you insights that competitors focusing on a broader market segment will have a hard time uncovering.

It can be more cost-effective. Nothing takes the oomph out of a brilliant marketing campaign quite like scarce resources stretched to their limits. With a narrower market, you'll know your audience better, which means you'll be able to better direct your resources to retain that oomph—and create the potential for a better ROI while you're at it.

There's greater potential to resonate with your audience. From ads to events to web content, marketing to the specific needs of a business vertical means you can craft vertical marketing campaigns that speak directly to your audience. And a brand that resonates with its target audience is poised to take advantage of greater brand awareness and the impact of word-of-mouth marketing.

How Spotify can help your vertical marketing strategy

Vertical marketing is powerful because of the knowledge a narrower customer base brings: You know who your customer is, what they need, and when they need it.

With Spotify's digital audio ads, you can use this knowledge to craft marketing campaigns with fine-tuned precision, so you can meet your market right where they are.

Explore how Spotify can help your industry marketing strategy.

Looking for something a little more custom? Let's talk.