Advantages of Vertical Positioning for Your Agency

Positioning decisions probably last longer than most marriages, so let's get it right! Ignoring the dozens of nuances to consider, for a moment, let me help you think through the biggest issue: the pros and cons of positioning your firm vertically or horizontally.

Positioning Definitions

A vertical positioning is centered around an industry category, such as NAICS 541430--Graphic Design Services. (NAICS replaced SIC categories in 1997.) Or it could be very broad, like marketing for manufacturing, but it's usually narrower than that. So it might be credit unions or speciality physicians or non-profits or hospice or high-growth tech or wine or the life sciences.

A horizontal positioning defines your target in another way by spanning most of the verticals. You could define your horizontal by a demographic segment, like millenials or Hispanics or women, or even around employee alignment. It could be as specific as helping B2B leaders at disruptive transitions. You could also define it by a practice area, like packaging or investor relations or marketing automation integration.

Four Advantages of Vertical Positioning

I'll start with vertical because the vast majority of firms who are positioned well have a vertical positioning. These are the four advantages of vertical positioning.

First, vertical positioning makes it so much easier to find your prospects. Whether you buy a list of prospects or not, think of it like this: can you buy a list. Conversely, if you cannot buy a list, you are likely going to struggle finding your prospects. That's because your targets don't share sufficient characteristics to be on the radar of the world trying to sell things to them, and from their point of view, their problems aren't so unique that they value working with an agency that specializes in solving them. If you can't buy a list, you are looking for a group of prospects that nobody else thinks is worth tracking.

Second, vertical positioning benefits from decision makers who, when they change jobs, move to another position at a similar company, and when doing so will often take you with them. If you survive the change in decision-makers and pick up the new client, too, you've just experienced a significant advantage of vertical positioning: keeping the current client and picking up a new one in the same vertical. By the way, you can expect to follow a great client like that, on average, through three different companies.

Third, vertical positioning benefits from common venues that spread the word about your firm, like conferences, awards, trade publications, and shared vendors. Your prospects want to learn from each other, so they network in different ways. The more effective your work, the more they talk about you, spreading the word in very efficient ways.

Fourth, vertical positioning is usually more highly compensated. The marketplace places a higher premium on deep expertise that is defined vertically.

Finally

There are four advantages of horizontal positioning, and one of them is very significant to marketers: more variety. Stay tuned and we'll cover that next.