Divide and conquer
Simply put, vertical marketing means dividing up your universe
of potential customers into smaller groups that share similar
needs. This makes it easier to sharpen the message you deliver
and emphasize the benefits relevant to that customer group.
Sanda developed a number of vertical market tools for Kalatel
(a division of GE Interlogix). Kalatel designs and manufactures
video surveillance systems. The vertical market programs implemented
only a year ago are already yielding impressive returns.
Push marketing vs. pull marketing
For Kalatel, this vertical marketing effort represents a change
in thinking. Prior to concentrating on vertical markets, all
previous marketing efforts were push oriented.
We created sales tools and supplied them to independent reps.
The reps developed relationships with dealers and integrators
in their territories, and end users were exposed to Kalatel
primarily through contact with dealers and integrators.
The Kalatel message was being pushed through the channel.
Push marketing doesn't deliver a strong message to an end
user, because it gets weaker at each step in the process.
Kalatel realized that the strategic channel marketing program
was important to their continued success, but they wanted
to directly expose more end users to the Kalatel brand.
In mid-1999, Sanda developed new materials with an end-user
message and began producing print ads to run in end-user publications.
In 2001, we created direct-response programs aimed at groups
of end users in specific industries like education and banking.
The goal of these efforts is to get potential customers to
ask their dealer or integrator for Kalatel products and systems.
Because this works in the opposite direction from push marketing,
we call it pull marketing.
In some cases, such as the education market, many potential
customers will not have any experience in the electronic security
industry. The customers also wont have an established
relationship with a dealer or integrator. In these cases,
end users are likely to respond directly to Kalatel. When
they do, their responses are processed immediately. Theyre
sent literature or demo CDs, and their contact information
is distributed to the appropriate Kalatel salespeople as leads.
The sales reps then assign a dealer or integrator to contact
and consult with each potential customer.
Case study: Campus Secure
Heres an example of how our recent pull marketing program
to the education market worked.
In November of 2001, we sent a direct mail package
to a list of 10,000 subscribers to two education trade journals:
Campus Safety Journal and American School &
University. The list was comprised of facilities managers,
construction managers and campus detectives. We included a
letter from the manager of Kalatels education vertical
market, a Kalatel case study about a major surveillance system
installation and a response card.
the same time, we began advertising in Campus Safety Journal.
We're still there, on the back page. Both the direct mailers
and the ad offer respondents useful information about security
technology for schools, including case studies and government
reports. They also offer a chance to win a technology grant
for a school in their district.
the direct mailer and the ad drive respondents to the CampusSecure
Web site. And once they get there, we want to learn more about
our visitors. To register for a chance to win the grant, they
have to tell us a little about themselves. In addition to
contact information, we ask them several questions, including:
What are your security needs? In how many facilities will
you be installing security equipment? What is the timeline
for your project? This profiler rewards the visitor after
each question by offering useful information and advice based
on the visitor's answer.
We gather this kind of data on respondents so
that when theyve completed the profiler, we know enough
about their interests to determine how to properly handle
inside the CampusSecure site, visitors are able to download
a number of marketing materials created specifically for the
education market. Theres an application-based brochure
about the use of video surveillance in schools and a series
of five case studies spotlighting schools that have solved
specific safety problems with Kalatel systems.
Of course, a number of people still prefer to respond the
old-fashioned wayby mail. And that number just might
surprise you. Check this out: 74 percent of the respondents
to the direct mailer sent in their responses by mail. A large
percentage of the response to our ad also came in by mail.
The direct mailer included a reply card that enabled us to
get the same information we elicit in the Web profiler. And
we always include a coupon in our adsbecause we know
that the old way still works.
Bang for the vertical marketing buck
So far, our vertical marketing efforts in the education market
have led to some tangible results. Weve invested between
$75,000 and $80,000 in the Web site, case studies, brochure,
direct mail, advertising and direct email. In less than one
year, actual sales based on leads brought in by the ads, direct
mail and direct email are on track to bring in $1.55 million
of new business. And there are a number of much larger opportunities
currently on the table that, if realized, could surpass that
amount many times over.
Replicating a successful vertical strategy
Kalatel is a division of GE Interlogix, a group of electronic
security companies. Other GE Interlogix business units have
seen the value in this vertical marketing program. Initially
CampusSecure only offered information about video surveillance.
Now the site offers information about other security categories
related to GE Interlogix products, including access control,
asset management, fiber-optic transmission, fire detection
and intrusion detection.
New vertical markets
Our success with the education vertical market has led us
to identify other industries where we can develop similar
niche marketing efforts.
A tremendous opportunity exists with financial institutions.
The total annual video surveillance security market for banking
is roughly $159 million. Were targeting smaller institutions
(assets of less than $1 billion) and weve set a goal
to capture four percent of that total video surveillance market,
or $6.4 million, in 2002.
We're also creating an online resource center for architects,
engineers and consultants who help design and specify the
products that go into security systems. In addition to education,
banking and architects/engineers, we're also targeting the
gaming, public transportation, retail and homeland security
markets and developing tightly focused niche marketing plans
for these groups.
Are you thinking vertically about your marketing efforts?
Give us a call and lets talk more about how tightly
focused programs can take your business to a new level of