Vertical Market: How to Serve a Customer's Specific Need?

Updated: October 01, 2021


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There are many types of markets in the global business, and one of them is a vertical market. When you intend to enter any new market, then you should have a good understanding of the term and how to reach the customers and satisfy their needs in this type of market.

For vertical one, you have landed on the perfect article. From here, we will reveal to you what vertical markets are exactly, popular vertical markets and their needs, the benefits of vertical market before going to a step-by-step guide of how to enter the vertical market.

Let’s get started right now and find out the simple answer to the question of Vertical market: How to serve a customer’s specific need?.

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Table of contents

What are vertical markets?

What are vertical markets
What are vertical markets?

Vertical markets, or “verticals,” are business niches where retailers target a specific audience and satisfy their needs. Thanks to its minimal expense and power to reach a global audience, vertical markets are rapidly being supported through eCommerce businesses. A horizontal market, vice versa, concentrates on targeting a broad group of people, whatever their industry or specific niche. Online businesses normally employ verticals in targeted marketing or outreach campaigns.

Let’s take Lefty’s for example.

Lefty’s vertical markets
Lefty’s website

It is a left-handed retail store in San Francisco that offers school supplies, kitchen goods, and gardening tools, custom gift sets, and many more for lefties. Because only a small percentage of the total population is left-handed, lefties become an essential niche market.

Normally, vertical markets have their list of business standards. Bear in mind that if you want to enter the markets, then you should think about their probably very high barriers to entry.

The global business market offers a wide range of opportunities for businesses of all kinds and sizes. Vertical market providers are focused on specific goods and services that meet the needs of a niche customer group. These markets are the opposite of horizontal markets which sell their products and services across multiple industries with broader association among a variety of businesses and business segments.

Vertical market providers concentrate on particular products and services that address the needs of a community of niche customers. Compared to the horizontal markets that sell their products and services throughout various industries with larger business and business segments’ involvement, vertical markets are different.

Six vertical markets below with some characteristics and their projected growth will give you a heads-up:


Popular vertical markets: Retail

The retail market is undergoing improved customer awareness of goods and where to purchase them. Most stores are bringing cashiers out to the floor from behind the counters so their customers can enjoy better customer service. For this type of market, you need mobile POS systems, tables, reliable communications, and wireless solutions.


Popular vertical markets: Healthcare

Because people nowadays tend to live longer and there is a lack of nurses and health practitioners, the providers need to have wireless technologies to perform more efficiently in providing medical supports for the patients. Secure storage can also be crucial in assuring the privacy of their patents. Besides, mobile, systems integration, IoT technologies, and communications systems should be required to maintain communication and avoid deaths.


Popular vertical markets: Banking

It is among the markets with the fastest growth. Hence, financial institutions should have improved bandwidth, security, and technological infrastructure.


Popular vertical markets: Manufacturing

In this market, they need to enhance the efficiency and effectiveness of manufacturing process by lowering production expenses, performance analytics tools, efficiency, and quality monitoring. And to remain a competitive advantage, they are also relying on security systems and cloud applications to protect intellectual property from cyber-attacks.


Popular vertical markets: Education

Sadly, it has undergone decreased funding. To solve this problem, the educational administrator technological solutions, online course delivery, and wireless technologies to save resources and increase enrollment.


Popular vertical markets: Government

Like the education industry, it has also experienced decreased funding. Therefore, with this type of vertical market, the governors should seek for ways to cost reduction and secure communications.

What are the benefits of vertical market?

benefits of vertical market
Benefits of vertical market

From a customer’s viewpoint, determining vertical markets makes the shopping process simpler and gives them a business specializing in satisfying their particular requirements.

Verticals are also beneficial in terms of different perspectives. From an advertising one, vertical markets are more favored because they make way for the formation of a single unified advertising attempt that can be developed throughout the board. Also, businesses favor verticals because their presence enables businesses to specialize in niche products where they perform best. Thus, you can conquer the market by developing the product or service more efficiently.

Besides, from a marketing viewpoint, less competition will result in faster and more economic exposure in organic search results (SEO and paid keywords. Also, note that specialization normally means lower competition. Hence, the market can support a higher price for a specific product or service. Due to the crowdedness of some specialized markets, businesses tend to focus on verticals that are open for innovation and uniqueness.

In a vertical market, entrepreneurs can approach a specific segment where they have a competitive edge. When these companies expand within an identified vertical market setting, they will also be obtaining knowledge and experience in the patterns, terminology, regulations, and competitiveness levels of their market.

The savings from marketing costs are among the most important advantages for vertical market companies.

Vertical market companies have the competitive edge of approaching a smaller base of consumers. Such narrower emphasis will result in more organized and concentrated marketing initiatives that are less expensive than any of those attempting to reach a broader audience.

Broadly speaking, a business that specializes in a vertical approach will provide consumers with personalized understanding and customized services. It will be an essential part of their business over the long run.

A vertical business may justify charging higher prices for specialized goods and services. Therefore, from a narrow market focus, it may contribute to higher earnings.

How to enter vertical market: step-by-step guide

Some issues you should consider:

Smaller customer base may limit revenue potential

The key benefit of verticals may also be the drawback: a narrower customer base that can minimize the opportunity for high revenues. More specifically, it will decrease the number of potential buyers willing to purchase their goods or services when a company specializes. Although wider markets can target a significant proportion of the population, a focused vertical will have fewer customers engaged. The objective is to identify a lucrative vertical, with room for growth.

Specialized market may decrease in size

Another possible drawback of verticals is the risk factor. A decline in the size of the niche sector may hurt the company. Several specialized verticals seem to be out of trend or have by-products substituted from a different vertical. That is why it is important to learn the intricacies of the vertical before the company decides to specialize. To decide whether the business will operate in such a specialized niche, a precise evaluation of the niche is desired.

Expanding to a new vertical may harder than starting a new business

An online company can enter — or expand — a vertical market with a detailed business plan and a clear understanding of the industry and can make a short-term profit. Hold on, what does “expand” exactly mean? Well, think of expanding into a new vertical as bringing your current product or service into a new market with an unexploited consumer base. By doing this, you can boost sales and reach top-line growth goals.

It can be harder to expand into a new vertical than to launch a new company. Why? For what reasons? Well, since normally businesses seeking to expand in this way have already built up themselves, their employees, their products, their business model, their operations and their vision within a particular domain — causing adaptation to be challenging and sophisticated.

Realizing that it is, indeed, barely easy to grow your company in every context, you ought to wonder what inspires your decision to pursue a new vertical. Following this direction with clear insight into “why” will help you to decide if there is a strong and quantifiable justification for the money, time, and effort in the future.

Step 1: Select target vertical market

It may not be tricky to choose your target vertical market. Check out several tips from CompTIA as below:

  • Selecting your target vertical marker doesn’t have to be complicated. CompTIA has a few tips you can follow:
  • Profile your current customer base and identify the patterns.
  • Produce a simple spreadsheet with columns for each sector, revenue numbers, and determine suitable solutions.
  • Read and gain awareness of the industry trends that CompTIA provides in your new vertical.
  • Select a profitable market with potential growth and real opportunity.

As mentioned in the preceding section, there are six popular verticals for you to take into consideration entering. Also, there are some other aspects for you to take into account. First and foremost, if you have an intention to readjust or fit it more closely into one niche, then you should ask yourself how your business runs (the thing that CompTIA always suggests). What is your Vertical Value? After that, you’ll need to have a birds-eye view of the business and find out any specialized skills or experience in the vertical to work it out.

Think about the capability of your existing employees and wonder whether or not they have that expertise. Then, you can decide whether to recruit more or simply execute more training. Note that if your decision incurs some expenses, then you should make sure that the forecast revenues will cover these costs. Also, a good review of your customer base is crucial because current customers are normally the first source that helps you to identify that vertical market. Eventually, you should be assured that you are examining more significant market opportunities within the vertical.

After you decide to concentrate on a vertical market, you can make a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats). SWOT will help you evaluate the internal and external factors that may have the power to influence your business’ capability to target that vertical. Thus, you can organize your team, your strategy, your target audience more easily and specify practical projections.

Step 2: Define your ideal client

To enter a new vertical, the second step is to profile your target customer. You should figure out the mutual trait of potential clients. Also, you should identify their pain points and finds ways to address them. You can consider your current clients in the market and generate an ideal client “persona.”

After that, you can approach any customers that match your ideal client profile and administer a formal or informal survey to identify their specific pain points and concerns. The survey result will be a justification for your sales, marketing, services training, and strategy.

Step 3: Research the potential of your local market

Research local market
Research local market

With a specified vertical market to concentrate your business on and an ideal client profile of current and potential customers, it’s time that you research the potential of your local market. With localized information, you can have a proper basis to decide whether to follow this direction or not. Research does not necessarily mean that it will incur huge costs or require a lot of time. You can perform simple online searches and conference/event involvement that is related to your vertical.

If you are just commencing, or realize that few or none of your clients match the vertical you want to target, then you can always do this. Industry publications can provide a reliable source of information.

Or, you can go to live events and seek valuable information from a business that specializes in that niche in another non-competitive market. You can also visit LinkedIn, connect with people in that niche, and ask them what you are wondering. A clear mindset of your vertical market and potential clients will help you to find out the procedures of entering the selected vertical.

By doing research, you can have more opportunities and new clients. Bear in mind that connecting with the main actors in your vertical space is crucial to find out what makes them conquer the market. Think of each contact as a business opportunity for future referrals or introductions.

Step 4: Commit to the vertical

Commit to the vertical
Commit to the vertical

Pursuing a vertical is more than just building a business plan. You, your staff, and all of your company’s morale must concentrate on becoming the leading company in your selected vertical market. You should examine the culture of the targeted industry, investigate different roles within a typical business, identify the potential influencer. Then, you ought to discover how it will be working in that industry.

Also, the most important thing is to investigate the workflow of the processes and procedures employed to create revenue for the organization. If you want to provide technology services that will help assure the efficiency of those workflows, then a good grasp of the workflow of your client’s business is vital. Strive hard to become an expert in ever-changing compliance and regulatory matters in the areas you work in. Thus, your business will seem more trustworthy as you are attempting to sell the goods or services that your communication systems may connect.

Step 5: Create a clear positioning statement

After that, you should develop a clear positioning statement to illustrate your message. It will motivate you to concentrate your marketing efforts and clarify your sales attempts. When you create your positioning statement, take into account the main requirements of your target clients, your uniqueness as compared to other IT providers, and what is in it for them by using your services or expertise.

Step 6: Identity key industry groups

As you have engaged yourself in your selected vertical markets’ daily business activities, now it is time to indulge in the industry associations, events, and publications.

Step 7: Develop training programs

Develop training programs
Develop training programs

To be dominant in your vertical market, your team should keep up to date with current matters of that industry. Every member of your organization must acquire expertise within your selected market. You should also understand your market’s language because each vertical has particular acronyms and phrases that you should be familiar with to fully integrate into the vertical.

You should guarantee that you are developing ongoing training programs for all of your employees to equip them with the knowledge about industry-specific jargon, trends, and challenges. You should make sure that your staff attends industry tradeshows and meetings, and then they will report back with their findings and viewpoints. You can take into consideration having your technical teams in more important training programs regardless of how technical the topics are.

Step 8: Identify top industry influencers

Identify top industry influencers
Identify top industry influencers

To keep in touch and learn from the top consultants, lawyers, accountants, and other service providers within your target vertical, you can explore information on the people who normally speak at industry events. Alternatively, you can read the industry publications and find out the interviewed experts, those who have popular blogs, or those who possess a significant social media following.

After you create a list of influencers, you can follow and interact with their content frequently, build a favorable partnership with them. You can also turn to them for support. Your goal should be to build a mutually beneficial relationship. You ought to create a friendly reciprocal relationship.

Step 9: Identify initial sales target

Identify initial sales target
Identify initial sales target

Now, you can start to generate a detailed database for your vertical market, comprising of current and potential clients and industry leaders and influencers. Remember to enter the names of all potential decision-makers and influencers. Plenty of list brokers out there can provide this type of information, or you can purchase a list of potential contacts.

To get more information about each business opportunity, you should get the most out of social media and your client’s websites. Not only reaching out to potential clients is crucial, but is also keeping your website and your social media channels abreast.

Step 10: Identify potential partner

Identify potential partner
Identify potential partner

You can begin doing research and identifying potential business partnerships after you identify potential customers. You should seek for other businesses in your vertical that are currently offering non-competitive, but related goods and services. Once you have engaged yourself in your vertical market, you can spot such connections via trade shows, associations, and social media.

Normally, mutually defined rules of engagement, a written list of actions both parties, and methods to measure results can contribute to the prosperity of a joint venture. To avoid misunderstandings or disagreements, defined goals and expectations are vital. The partnership guidelines should also be outcome-oriented and can be used as a method for periodically assessing the joint venture’s performance.


To sum up, before entering any market, you should understand its characteristics and weigh the pros and cons of embarking on it. For the vertical market where you only concentrate on particular products and services that meet the needs of a community of niche customers, embarking on it is not that easy.

Luckily, with our step-by-step guide, we have revealed to you the answer to the question of How to serve a customer’s specific need in vertical market?. And we hope that you can have an informed decision and become a successful business in that market.

Furthermore, if you ever doubt your business strategy, then you should check out our post: Market development strategy: How to choose the right strategy for your business?.

If you have any questions, comments, or concerns, do not hesitate to leave a comment below or directly contact us. We are always ready to help you out in case you need anything. Furthermore, if you find our article useful, then you can share it with your social network’s community. We would appreciate it if you could do that.

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