Improving your vertical game is key to growing your addressable market. This article evaluates the four-part formula of understanding your customer’s problems, adapting your products to fit in their world, envisioning where their market segment is going, and showing them what the future could be.
By Chris Witeck, Principal Technology Strategist and Bill DeForeest, Senior Director Product Devlopemt
A great vertical jump isn’t just great for basketball anymore. When it comes to building and selling mature products with a large customer base, it can be the difference between boosting sales and margins over time or withering away on the slog to irrelevancy. The key to unlock renewed growth is building the right kinds of industry vertical solutions. Here’s the take of Roger Bostdorff, a 30 year veteran of sales at IBM:
“...price is important. However, if the only thing you have to offer is price then the next clown that comes in the door with a lower price will take your customer’s business…
If you lead with price without understanding the priorities of your prospect, then you have nothing but price to discuss. Whereas, if you really think through and analyze your business proposition; YOUR VALUE ADD, you very well may have a solution. This analysis will create an approach that builds loyalty, protecting your margin and most importantly provides significant value to your customer.”
The promise of more sales at higher margin sounds great. So how do we arrive at such an approach to customers and the market? It turns out there are well-understood methods that can be applied. This article will talk through what those methods are, and pull in examples from Project Minerva, a recent project in the education market segment from Citrix, which offers a case study that helps to point the way.
A commodity product is a low margin offering which can be applied to a wide variety of situations. It addresses a need for a customer, or else they wouldn’t buy it at all. But the value it brings versus competitive offerings is usually hard to discern.
To change this equation, the first step is to gain a deep understanding of a client’s business. How does their business work? What is the key to unlocking their value to their own customers? How does that customer expect to achieve growth? What does that client believe will dictate success or failure in the future?
As one builds out this picture through multiple interactions with a variety of customers, a natural by-product should be learning their language. What are the key terms that capture their value proposition? How do they talk about the business processes they have in place today? Who are the strategic vendors already in place, and why are they strategic? What are the important personas, or roles, in executing their business plan? And how does all this need to progress in the future to reach their goals?
Armed with this knowledge, we can engage in deep and meaningful conversations with those customers to uncover their most important problems and priorities. Coupled with the right marketing materials, suddenly one is talking the CXO level of the company and the strategic decision makers. The door is now open to start dreaming with your customers about your joint future.
A deep understanding of customer problems and priorities is no guarantee that you can successfully build a solution that will meet their needs. The key is to innovate with your customers, not for your customers. One failure people often make is that they go deep into understanding a market, a customer, a problem, and then once they start to architect and build a solution the communication chain stops. What happens if what you build misses the mark? Even missing the mark just slightly early in your build process can cascade into a serious gap with customer expectations if it is not caught early. That’s why the process to understand your customer’s problems and priorities is not a one-time event. It is an ongoing process where you invite your customers to participate in the entire innovation process. Make your conversations ongoing conversations, and at every step of the innovation journey take a moment to test your current thinking and use your learnings to adapt quickly.
One challenge to overcome is bridging the gap between those who typically focus on collecting and refining requirements and those that build. As you enter the more technical stages of designing and building, keeping your outbound focused teams and inbound focus teams communicating and collaborating will ensure you can quickly adapt to new learnings from your customers. How do you do this? It depends on how your teams are structured, some ideas include:
Doing this allows you to be part of your customer’s solution, not part of their problem. As what you are building for them evolves, you can more easily envision and adapt how your products will fit into their world of services, things, people and workflows.
A big part of engaging with your customers thought leaders is showing your understanding of trends and how those trends affect their business. We have been dismissed by large customers for not showing them a future vision:
"We were dismissed by DH … as not presenting the right vision for the future”
"There is no sale at DH of Citrix based mobility without the office of the future around it”
“If all you have is mobility … there are lots of products in that space and it’s not very compelling”
- Director of Enterprise Sales, Gibraltar on D+H Finance Engagement
We were able to re-engage with D+H by giving them futures briefings and demos. The Citrix Technology Landscape provides a general understanding of trends and how those trends translate into key vertical markets like education, healthcare, finance, etc. These materials can also help us understand some of the key challenges on the horizon for these market segments. This kind of thought leadership allows us to be seen as a long term partner instead of a replaceable product vendor and to engage at more senior CXO levels. Many companies come yearly to the Citrix Executive Briefing Center (EBC) just to get an update on the technology landscape. Companies such as John Holland Construction and ANZ bank actively use the landscape to define their future roadmaps.
“The technology landscape roadmap is exactly what I needed to be able to present to my leadership team and we are basing our future directions on the roadmap” – David Banger, CIO John Holland
Being part of you customers long term strategy is hard position for your competition to disrupt.
As we have discussed throughout this article, the customer engagement process is a continual journey, not a one time endeavor. But once you have talked to customers to understand their problems and requirements, what do you then show them before you have built anything, before you have anything functional to share?
A prototype does not have to be based on working code, it can be anything visual you want to share. That can be rough mockups in a powerpoint, hand drawn sketches, interactive sessions where you huddle with a customer around a whiteboard (real or virtual) and early screenshots or real or enhanced product interactions. The point is to start with low fidelity prototypes that you can share, test and collect feedback on. Then over the course of your customer engagement journey you can gradually increase the fidelity of what you want to share until you are ready to hand over the reins to the customer to test a functional concept.
Even if you ultimately decide what you are building may never become a productive part of your business, it still is worth sharing it with your customers if the concept behind it is based on real business problems. Much like many of the concept cars shared with the world never go into production, those concept cars do affect the market and features for new cars. Continually showing and sharing your concept for the feature is just another avenue to test new ideas, gather feedback and quickly adapt to what you learn.
Improving your vertical game is key to growing your addressable market. This four-part formula of understanding your customer’s problems, adapting your products to fit in their world, envisioning where their market segment is going, and showing them what the future could be. Following this formula can dramatically improve customer loyalty, access, and sales. Being seen as an innovative company builds long term relationships and doesn’t just sell today’s products, but your ability to deliver future products that are relevant to your customers.
“It’s good to see Citrix evolving from a product company to an innovation company… This is the most exciting day I have had in a long time, you’ve unlocked the holy grail to education technology.”
CTO from one of the 10 largest private colleges in the US
So let’s improve our vertical game together.
...price is important. However, if the only thing you have to offer is price then the next clown that comes in the door with a lower price will take your customer’s business…