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Why Your Business Will Fail If You Are Not Industry or Category Focused

I was speaking with Jeff Gallimore, founder of the successful Excella Consulting in Arlington Virginia, last week. I’ve had the good fortune to see their business grow, first-hand, over the past several years. With over one hundred and thirty employees, their business grew in 2013. But, they made some changes in focus in 2014 that has dramatically improved their growth trajectory. What caused their explosive, recent growth provides a valuable lesson for your business.

Over the years, Excella was organized around their technical skills. They had a group that specialized in Java development. Others were focused on business intelligence. They had a focus area for AGILE development, and for Microsoft’s tools. There was one problem, though. While that organizational structure worked well for their internal team and for recruitment of staff, it could easily leave the customer feeling confused.

Consider the Customer

Customers don’t want whatever services you are selling, per se. Rather, they want a subject-matter expert they can rely on to diagnose their specific situations and recommend solutions to achieve results. By focusing on the technology, Excella’s clients were left with the burden of figuring out if the solution would apply to them as the customer. Recently, Jeff and his partners shifted focus to industry-specific challenges. So, instead of trying to sell Java Development, they started addressing how to intelligently apply technology to solve specific challenges in non-profits, federal government, hospitality, and financial services.

Valuable Lessons

In my prior technology business, we had developed an electronic forms software platform. When we tried selling it to customers, they would always ask about which other companies we had helped in their industry. Over time, we realized that many of our clients were using the platform for compliance reasons. We shifted our focus to specific industries: Pharmaceutical, hospitals, and financial. When we would meet with financial institutions, we didn’t even discuss the underlying technology. Rather, we would discuss the major challenges other financial institutions faced with compliance, the consequences of not solving those challenges, and then how the customers used our solution to quickly solve the problem. Our sales cycles shrunk, margins rose, and competition became less relevant. Jeff Gallimore is seeing the same trend at Excella with their industry focus.

The Benefit of Industry Focus

As Excella shifted focus to become industry-specific, Jeff’s team doesn’t find themselves asking naïve questions about the customer’s industry. Instead, Excellians (what their associates call themselves) are often seen as the subject-matter experts on how to address the important business challenges the customer is facing. The customer takes the technology part for granted. Since Excella brings deep expertise in the specific industry, the customer feels confident that they’ll figure out how to solve the challenges. “Through this industry focus, we are in a position for better, more sustainable growth in the future, while better serving our clients. This creates a stable environment for our 130+ employees while ensuring they have room to grow professionally;” Gallimore shared.

Early this year I published an article about the Top 10 Trends in Sales and Business Development for 2014. Number 1 on the list was The Evolution of Subject-Matter Experts, and Number 3 was Continued Shift Toward Vertical vs. Geographic Focus. Here is how you can put these principles to work.

Define Your Verticals

Take your customer list, and put one project and the associated company on each sticky note. Then organize them by either a) industry; or b) the key problem you helped them solve. You’ll see a pattern evolve. In my prior company, we didn’t realize we had industry expertise until we woke up one day and had served 8 of the top insurance companies. Suddenly, we were insurance experts.

Focus on Problems and Results

When you think about the problems you solve, leave your work out of it. Think instead of “What was the underlying issue the client was facing? What would have happened to their business without a solution?” Once you define those problems, write out the “outcome the client was seeking that would make the solution a success.” In this way, you’ll be aligned with how executives make decisions.

Establish Your Position

Once you know the problems you solve, you can start to educate your audience about those issues. Write articles on a regular basis to establish your expertise in the industry. Omit any self-serving references to the products or services you offer. Instead, discuss the challenges, describe the consequence of not solving those issues, and then share various ways customers might solve them (that means including solutions that are not yours). If you do this properly, you’ll be showing up in search results pretty quickly as a subject-matter expert.

Bottom Line

You can easily get caught speaking about your skills, products, or services. However, the most valued vendors are the ones that focus on the customer’s challenges and are seen as industry experts. Sure, having a geographic presence makes perfect sense if you are a community bank. But, when your customer is facing a serious issue, they want an expert who is proficient at solving that situation, regardless of geography or jargon. Take the steps to carve out your area of expertise, and the competition will struggle to keep pace with you.

It’s Your Turn

Which companies can you think of who have avoided being seen as a commodity by having an industry focus? What’s your focus? Share it in the comments and I’ll offer feedback.