Vertical Market Opportunity: Selling to Healthcare
Vertical markets represent one of the more fertile opportunities for VARs, MSPs and IT solution providers these days, according to industry experts, but just how do you decide on which vertical market to pursue and then how do you go about pursuing it?
Look for a vertical market that is poised for growth, recommends Donald Nokes, president of Warwick, R.I.-based IT solution provider NetCenergy, which has created an IT healthcare practice over the past few years. Nokes offered his perspective on how NetCenergy decided to pursue the healthcare vertical and the tactics it used to gain a foothold in that market, during a presentation at Ingram Micro's VTN Invitational conference in Chicago April 12.
When Nokes looked at verticals poised for growth in 2007, one of the ones he identified was healthcare. The industry had been slow in adopting new technology, he said. Most offices lack an IT manager, and most have limited IT exposure and comfort with IT.
NetCenergy's client base already included a handful of medical offices, one community health center and no hospitals, so the company already had a bit of a foothold. And a look at the competitive landscape revealed that there were only two competitors in the market – one selling to hospitals and another to small medical offices. Nokes noted that the IT skill set required by healthcare organizations mapped well to the skills on the NetCenergy staff.
But once the research is done, how do you get in front of the decision makers? Healthcare organizations aren't so comfortable with the standard sales approach, Nokes found.
"Referrals is how they get business," he said. "Referrals is what they trust."
So he started by talking to his own physician and leveraging his own personal network – not always the easiest approach. But he leveraged what he learned and decided to work on becoming a subject matter expert.
To do this Nokes recommends joining community organizations. He joined the local chapter of HIMSS, attending quarterly meetings of the group which typically attracted 100 to 125 members. He presented at meetings and earned additional education, networking and access opportunities as he earned the respect of a subject matter expert. For instance, he served on the Lt. Governor's healthcare task force and was quoted in the top story of a local newspaper about healthcare costs.
This approach earned Nokes trust with healthcare organizations. In 2007, NetCenergy had 160 customers with 12 in healthcare. By 2011 the company had added 70 more clients and 56 of those were healthcare clients to bring its base of healthcare clients to 22 percent of the entire business.
But the opportunity doesn't end there, Nokes noted. Once those IT healthcare clients are in place, they are also an excellent base for managed services sales, too.
But, Nokes said, there's a commitment that comes with this kind of approach to a vertical. He personally spends about three hours a week in meetings related to the healthcare field. But for NetCenergy, that time investment has paid off.