Expanding Into A New Vertical: Partner Up Or Go At It Alone

There are several strategies to employ when a company enters a new vertical, as expansion can be eased or made more difficult by partnering up with a fellow business.

A sales management team needs to determine whether this type of business relationship is going to help it expand its client list and revenue stream, or lead to less profits because of possible competition.

Partnering with someone is a consideration for managers, but there are several variables that need to be considered. The most important thing is leveragability when trying to expand in to a new vertical, as a company needs to assess its own worth and leverage its existing assets, according to Heather Kivett, President of Resolution Systems, Inc., a sales training and consulting firm.

“If you have an existing partner in that vertical that may be something you can leverage,” said the executive. “It’s important that you completely understand the industry, challenges, outlook and competition.”

The management team needs to discern who is growing and what companies are contracting, as this can be a valuable consideration in the process, noted Kivett.

“After that it’s important to understand what people in the new vertical will be using your products and services,” said the executive. “Or, how would they use your products and services if they don’t from a similar company already?”

Sales management teams need to acquire as much information as possible before rushing in to any type of agreement or transaction, as there are some considerations that may not have been addressed prior to the decision.

There needs to be a context that exists when the company is considering their approach to gaining potential customers and future buyers. The decision needs to be backed by a significant amount of research and can be spread out among employees so that as many opinions as possible are taken into account, according to Kivett.

If there is not an established understanding of these items there will be a tremendous difficulty that the company will face in positioning their product in an attractive way to the potential customers, said the executive.

“Whether you use a partner or not, it’s all about sourcing information and leveraging what you have,” said Kivett. “Understand what the market is looking for.”