Sent by Jonathan Stark on July 5th, 2017
Specializing on a vertical market is a great way to kickstart your marketing efforts and increase your profitability.
(For more info about vertical specialization, search my previous messages for “vertical”, “niche”, or “pigeonhole”)
Like all tactics, focusing on a specific vertical market has pros and cons. Two questions that often come up are:
I’m going to add my perspective on the first question today.
Let’s say I am a mobile consultant who helps credit unions increase member engagement. Over time, I amass a client list that contains quite a few credit unions. A new credit union reaches out to me to talk about working together. In our initial communications, they say something like:
“I see you work with a lot of credit unions. How do we know you won’t share our proprietary info with a direct competitor.”
This is a red flag question. They clearly don’t trust me yet. It could be that I need to do a better job fostering trust in my marketing materials. But more likely they haven’t worked with many consultants and simply don’t understand that a certain level of trust is a pre-condition for getting anything meaningful done. If this is the case, they’ll probably have unrealistically low expectations of my fees.
If I decided to move forward with them, I’d say something like:
“If I had loose lips, I’d have gone out of business a long time ago. But I don’t expect you to just take my word for it. I’d be happy to sign an NDA once we have a formal agreement in place.”
(Two things about NDAs: 1. I won’t sign an NDA just to have a sales meeting, and 2. It’s a good idea to consult with your lawyer before signing anything.)
If the client isn’t satisfied with an NDA, they might additionally request that I sign a non-compete. This is a huge red flag for me, but I have signed them once or twice in the past under certain circumstances. Specifically, for engagements that I strongly believe will end up netting me mid-six figures or higher. In other words, I’ll only consider signing a non-compete if the potential upside is huuuuuuge.
Again, consult your lawyer before signing anything!
Tomorrow I’ll talk about code reuse.
P.S. Would you like help picking a vertical market? I’m available for a limited number of 1-on-1 coaching calls each month. Book yours now: https://expensiveproblem.com/call
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