Feature Article: Vertical Focus Drives Stellar Growth

By Gennifer Biggs, Business Solutions magazine.

For several years, Erik Nachbahr, founder of Helion Technologies, ran an IT business that was chugging right along. It was profitable and could support a handful of employees. But, when Helion made the strategic decision to go vertical, all of that changed. "We grew slowly and organically until about 2005, when we had five employees," explains Nachbahr. "Since then, we've had double-digit annualized growth each year, and we now have 60 people." All of that success can be traced back to the point where the MSP found its niche — a vertical it has learned to specialize in and now services across the nation.

Don't Rush Once Vertical Focus Identified

For Helion, the evolution of its customers focus followed the acquisition of its first car dealership client. That job turned into a referral, and before Helion knew it — it had a vertical focus. "We started recognizing that each of those dealerships had the same challenges, and that started to evolve into solution sets for us," explains Nachbahr.

Once Helion identified its niche, it took about two years before it had what Nachbahr considers a full vertical focus. In part, he explains, because he wanted to give his company time to grow properly rather than pushing into the market with heavy-handed marketing. "I believe your infrastructure needs to lead the revenue so that you are ready to do the work when it comes in," he explains.

One challenge with assuming a vertical sales focus is determining where you should focus. How do you know that new client, the first in a new vertical market, is the cornerstone for your company's vertical focus? Nachbahr says there are some indicators.

Once you've determined your particular vertical focus, it is time to put your consultative sales skills to work. Nachbahr talks openly and often with his vertical clients to fully understand their business needs and unique problems.

Advantages Of Vertical Focus Clear For MSPs
One of the key reasons IT solutions providers lean toward having a vertical focus is the easier path to sales. Obviously, referral business provides an advantage, but a vertical focus also provides a running start at cold sales calls as well.

Nachbahr says an often-overlooked value of vertical focus is service delivery — making sure you are providing the same customer service on a routine basis. Having a vertical focus allows solutions providers to develop a process for the common solutions, allowing a jump start on each new customer.

Don't be blinded by the positives; there are downsides to having a vertical focus. Nachbahr warns that while a solutions provider can quickly earn referrals with a solid solution set, it can just as quickly get a bad reputation. "All the elements that make it easy to ramp up in a vertical can be a doubled-edged sword; everyone is taking about you in that vertical — good or bad. Also, a vertical focus doesn't protect you from the ebbs and flow of business."

With its vertical focus in place, Helion has enjoyed an annualized growth rate of 58% over the last three years, and Nachbahr says with certainty that success is due to the company's verticalization.

His best advice for those interested in a vertical focus? Don't miss the point of "focus."