Understanding Sales Verticals and How to Use Them

Sales verticals are categories of businesses or industries that share similar characteristics, needs, or challenges. By focusing sales efforts on one or more verticals, small businesses can tailor their messaging, products, and services to fit the specific demands of those markets. This focus helps improve sales efficiency and customer relevance.

Why this comes up / what goes wrong

Small-business owners often struggle with scattered sales efforts trying to reach everyone at once. Without clear sales verticals, sales teams may waste time on leads that are unlikely to convert or fail to speak directly to the needs of particular customer groups. This leads to slow follow-up, lost leads, and inefficient sales processes. Understanding and defining sales verticals helps focus marketing and sales resources where they have the highest chance of success.

Step-by-step

1. Identify your current customers’ industries: Review your existing customer base and group them by industry or sector. Check for patterns in who benefits most from your product or service.
2. Research market needs by vertical: For each potential vertical, research common challenges, regulations, and buying behaviors. Check if your offering solves specific problems in those verticals.
3. Evaluate vertical profitability and size: Assess each vertical’s market size and your ability to serve it profitably. Check competition and potential deal sizes.
4. Select 1-3 verticals to focus on: Choose verticals where your business has the strongest fit and growth opportunity.
5. Tailor your sales messaging and materials: Customize your sales pitches, email sequences, and follow-up tasks to address the specific pain points of each vertical.
6. Assign sales territories or reps by vertical if possible: This helps build expertise and relationships within each vertical.
7. Track deals and follow-ups by vertical: Use a pipeline tool to monitor progress and adjust strategies.

Example (fictional figures)

A B2B software reseller in Denver, Colorado, reviews its customers and finds 60% are in healthcare and 30% in manufacturing. The owner researches these verticals and finds healthcare has more urgent needs for compliance software but is highly competitive, while manufacturing has moderate demand but fewer competitors.

The owner decides to focus on healthcare and manufacturing verticals.

• Healthcare market size estimated at $5,000,000 potential yearly sales.
• Manufacturing market size estimated at $3,000,000 potential yearly sales.

The owner projects sales as follows:

Healthcare potential sales: $5,000,000 × 10% conversion rate = $500,000 Manufacturing potential sales: $3,000,000 × 15% conversion rate = $450,000

Total projected sales from vertical focus = $500,000 + $450,000 = $950,000

The owner then tailors email sequences and follow-up tasks in their CRM to address each vertical’s needs, increasing lead engagement.

Common mistakes

• Trying to serve too many verticals at once: This dilutes focus and messaging. Prevent by selecting a small number of verticals.
• Ignoring customer data when choosing verticals: Leads to poor fit. Prevent by analyzing your actual customer base.
• Using generic sales messaging: Fails to connect with vertical-specific problems. Prevent by customizing pitches and sequences.
• Not tracking vertical performance separately: Makes it hard to know what works. Prevent by tagging deals and leads by vertical in your CRM.
• Failing to assign ownership or territories by vertical: Leads to missed follow-ups. Prevent by organizing your sales team accordingly.

Doing this in HelloGrowthCRM

HelloGrowthCRM helps manage sales verticals with its Deals (pipeline) feature, where a quotation sent last week shows up as a deal at the 'quote sent' stage with a follow-up date so it is not forgotten. For businesses with field sales, Territories, field operations and commissions enable reps to log visits from their phone while managers see the day's beat, helping manage vertical territories. For founders without sales managers, Managed RevOps provides weekly follow-up execution and pipeline hygiene, ensuring leads in chosen verticals are actively worked. Learn more about WhatsApp and SMS CRM and the built-in CRM dialer to streamline vertical sales communication.

Frequently asked questions

What is the difference between a sales vertical and a sales segment? A sales vertical refers to an industry or market sector like healthcare or manufacturing, while a sales segment can be broader or based on customer size, geography, or behavior. Verticals focus on industry-specific needs.

How many sales verticals should a small business target? It’s best to focus on a few verticals to maintain tailored messaging and efficient sales processes. Trying to cover too many can spread resources thin.

Can sales verticals change over time? Yes. As your business grows or market conditions shift, you may add, drop, or change verticals based on what brings the best results.

How can I track performance by vertical in a CRM? Use deal tagging or custom fields to label each lead or opportunity by vertical. Then filter and report on pipeline stages and conversions by those labels. HelloGrowthCRM’s Deals (pipeline) feature supports this.

Is it necessary to have dedicated sales reps per vertical? Not always, but assigning reps or territories by vertical helps develop expertise and stronger customer relationships in those industries.

Key takeaways

• Sales verticals are industry-specific customer groups that help focus sales efforts.
• Identify verticals by analyzing your current customers and market needs.
• Focus on a small number of verticals to tailor messaging and improve efficiency.
• Use CRM tools like HelloGrowthCRM to track deals, assign territories, and manage follow-ups by vertical.
• Avoid spreading your team too thin or using generic sales approaches.

Start focusing your sales on the right verticals today. You can start on the Free Forever plan (200 leads, no credit card) with HelloGrowthCRM to organize your pipeline by vertical and never miss a follow-up.