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 won’t 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. They’re 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
Here’s 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 Kalatel’s education vertical market, a Kalatel case study about a major surveillance system installation and a response card.

At 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.

Both 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 they’ve completed the profiler, we know enough about their interests to determine how to properly handle the lead.

Once inside the CampusSecure site, visitors are able to download a number of marketing materials created specifically for the education market. There’s 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 way–by 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 ads–because 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. We’ve 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. We’re targeting smaller institutions (assets of less than $1 billion) and we’ve 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 let’s talk more about how tightly focused programs can take your business to a new level of marketing success.