Niche marketing is not an all or nothing strategy. A firm can specialize in a targeted niche, and still service general clients. We call this is a vertizontal strategy, which is the combination of serving vertical and horizontal markets.
A vertizontal strategy combines specializing in a specific niche—the vertical—while still taking on general clients—the horizontal. This approach is highly effective for professional services firms operating in regulated environments like accounting, legal, insurance or financial services.
A niche is an arrow
What separates one accounting firm from the next? Not much. Beyond size, location and talent, all accounting firms pretty much do the same things: accounting, tax and assurance. But a vertizontal strategy can help a firm cut through the clutter, and stand out in a crowded field.
For example, an accounting firm might use a specialization in family business as a niche practice. They could offer specialized services targeted for the needs of business families such as succession, tax and estate planning, mergers and acquisitions, and shareholder governance. The focus and expertise in family business becomes an arrow for the firm. It’s what they talk about at events and in their newsletters, and it’s a tool they use to generate leads and inquiries.
The niche also creates a halo effect in their client development. Family businesses need the general services of an accounting firm like audit, advisory and tax, which enables the firm to market their other capabilities. Family businesses also know other entrepreneurs and business owners, and good work generates client referrals.
Don’t leave money on the table
Focusing exclusively on a niche makes sense for some firms, but not all.
Serving one niche is often impractical, because of the breadth of a firm’s capabilities. Other times the target market is too small to sustain an entire business. In these situations a vertizontal strategy is more effective.
To get the most out of a vertizontal strategy you need two key ingredients:
Brand Positioning. It’s important to convey to your market who you are, what you do and how the practice areas integrate with each other. This is a delicate process, because you are trying to communicate multiple capabilities concurrently. If the positioning is not crafted properly the story comes off as “we do all things for all people,” which is not effective.
Customer Buying Habits. Understanding who your customers are, how they shop, how they compare their options, and who else they are connected with helps to shape a vertizontal strategy. The vertical is your arrow into the market. It helps to differentiate the firm and generate new business, but it can’t stop there. The vertical has to initiate relationships in other practice areas in the firm, or generate other referral business to achieve its full potential.
What is your firm’s strategy? Are you ready for a vertizontal strategy?