Broad Benefits of Vertical FocusBy Kathleen A. Martin | Print
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HEIT lists itself as a service company for the finance and banking community. CEO Dan Holt says a strong vertical focus enables growth. Is it time for you to get vertical?
You won’t find Dan Holt’s business, HEIT (www.goheit.com), listed in the phone book or LinkedIn as an information and technology provider. HEIT is just listed as "banking."
HEIT deals in security, unified communications and data networking technologies, but it is first and foremost an expert in the finance services market. It was awarded Cisco’s financial services partner of the year award.
When asked what makes HEIT so successful, Holt, the chief executive, sums it up in one sentence: "We are focused on one vertical with 90 percent of our spending on our employees."
"When I listen to John Chambers talk about the need for partners to focus on a specific vertical, I think the partners agree, but no one is really doing it," said Holt. "It is very difficult for business owners. They have to give up something."
The "single vertical" strategy has paid off for HEIT. Working on a subscription fee basis, the company is able to ride out the economic roller coaster and will even see some growth in this down market. "It won’t be 300 percent as is has been in years past, but we will grow" adds Holt.
Not sure if a vertical solution is right for you? Consider the following:
>> If you have a vertical expertise (banking, education, manufacturing) that is more than 50 percent of your revenue, it’s time to move to a vertical specialty.
>> Do not just look for experts in IT or service. "We hire people who have worked in the banking industry who have no IT experience, [and] we teach them the job. They bring us valuable expertise in how our customers business’ work," Holt says.
>> It is tough to let go, but you cannot be all things to all people. Holt says HEIT wasn’t always a singularly focused vertical company. "Sure, we had some customers who were not banking-focused and they remained on our radar until our contracts ended. Today we only have banking customers. It allows us to be extremely focused."
>> It can be a leap to leave a horizontal strategy and focus on a vertical. While you may notice a small decline in revenue at first, the key to success is keeping the focus. "Back in 2005 when we started, we had only two big banking clients and a series of small ones. We knew we needed more than two and being able to become the experts in our vertical has allowed us a unique competitive advantage," Holt says.
Growing your business today is possible if you are willing to invest in the markets that are growing. Dedication, drive, focus and expertise can bring your business to the top of your customers mind.
Kathleen Martin is special projects coordinator at Channel Insider.