5 Questions to Ask Before You Specialize in a Vertical Market

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Chuck Malcomson
Chuck Malcomson




Choosing to focus on a target market or vertical is a scary step for most agencies. 

Being selective can be seen as saying "no" to potential clients. But that's not the case. 

Specialization is all about defining who you are and what type of work you can do best -- you define your agency, not the client. 

This became apparent when I took a tour of HubSpot recently. While there, my agency's account manager David Weinhaus introduced me to the rest of the account team. 

These were people I had largely never met or even interacted with previously. But I had multiple people come up to me and say something similar to: “Chuck! We know you. We tell the story all the time about how you came from the medical device industry, started Screwpile Communications, focused on healthcare verticals, and brought on clients from as far away as Singapore.”

This interaction made me reflect on my agency's path to today: Our success wasn’t soley because of the power of inbound marketing (though that was no doubt part of it). It was also about the choice of specialization.

If Everyone Is Special, Then No One Is

I’m often reminded of a presentation Blair Enns gave in 2013 where he discussed his Win Without Pitching Manifesto. While readers of this blog are likely familiar with his work, one point specifically sticks with me to this day: Saying you’re a full-service digital marketing agency is not a form of specialization.

This quote from Enns sums it up:

We must simply choose to take control, first by specializing and shifting power back from the client toward us, and then we begin to shape our future.

My favorite Pixar movie sums it up rather nicely, too.

5 Questions to Consider When Specializing

Any change requires debate and discussion -- including some self-examination. Consider these questions when making the move to hone your agency's focus:

1) Are you passionate about a vertical or industry?

Having passion for an industry is a great place to start. Passion may come from an agency principal's industry background or simply an industry you follow closely due to other interests. Passion will help you engage with industry players and infuse your communications with a contagious enthusiasm that can help you win deals and influence people.

Ask yourself: What do you love?

2) Are you proficient in a vertical or industry?

This one is pretty self-explanatory. What are you good at? While being good at something does not in and of itself correlate to a great vertical or target, it should be part of the criteria.

Ask yourself: What do other people say you’re good at?

3) Is this vertical profitable?

You want to run a profitable agency, right? Make sure the vertical you target is willing and able to pay for what you have to offer. If your agency’s fees are out of reach for the typical client in this target vertical, it’s not a great place to focus. Always address budget questions early in the sales process so you don’t waste anyone’s time.

Ask yourself: Is the market willing to pay your fees?

4) Should you focus on a specific location?

One thing about running an online business is that you aren’t necessarily tied to a specific geography. Our agency has worked with clients all over the U.S., a few in Canada, and as I said earlier, as far away as Singapore.

While that sounds like a great thing (and it is, no doubt), I’ve actually been focusing on a tighter geography lately. It’s impossible for me or someone on my team to physically visit clients spread out across nations. We’re small and have a limited budget. That said, there is value in visiting clients face-to-face a few times a year. The payoff for in-person visits is better and longer relationships with clients.

Ask yourself: Can you effectively and affordably visit your clients in-person to establish and build relationships?

5) Should you focus on a specific discipline or tactic?

It might make sense for a large agency to specialize by functionality. Recent articles discuss how enterprise clients are less and less interested in hiring an agency of record. Instead, they are piecing together services from agencies with specific strengths.

That said, this approach only makes sense for agencies with 50 to 100 employees or more that service enterprise clients and are looking for a way to differentiate. Our agency focuses on small- to mid-sized medical device and health tech clients and also group medical practices. These clients want multiple services from the same agency. Sure, we’re “inbound” only, but that’s a pretty broad range of services. 

Ask yourself: Are my target clients big enough to want specialized services, or are they looking for multiple services from an agency?

Find Your Place

Asking these questions can help an agency zero in on a sweet spot for a vertical to target. I also suggest listening to Michael Hyatt’s podcast on discerning your calling. It's a great place to start.

Specialization is not about limiting your options. It's about setting your agency up for the right type of clients. 

What criteria did your agency use to choose a vertical to target? 


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