Ready to take a customer-first approach to sales in EMEA? Then it’s time to orient your sales efforts around the customer, not the technology you are selling.
Verticalization is an attractive strategy as SaaS providers mature. It enables sales reps to speak the customer’s language and become immersed in an industry or sub-industry, and in individual countries. Every sales conversation is transformed from a horizontal product discussion into an in-depth dialogue that focuses on a customer’s specific business needs.
At Snowflake globally, we wanted to specialize in certain industries to help enterprise customers truly mobilize their data. We decided to verticalize our sales organization, starting with our US sales team. Last year, we began the process in EMEA by building a financial services sales team in the UK. After a successful pilot program, we built out our verticalization efforts in four months and went live across the entire region.
I’m happy to report that we have seen great success with this strategy at Snowflake and now hold a deeper understanding of our EMEA enterprise customers across multiple industries and multiple countries. If you’re contemplating a verticalized sales approach in EMEA, consider the best practices we discovered, as well as some challenges you may face.
Customers benefit from verticalization (and you do, too)
First and foremost, a verticalized sales motion helps deliver an enriched sales experience for your target customers. The person standing in front of them knows their market, understands what they need, and can speak to how a solution will benefit them specifically. This sales rep is speaking their language and also connecting the dots between the solutions available and the challenges the customer faces in order to demonstrate the real benefits and outcomes they can expect.
One of the most compelling reasons for a move towards verticalization is to harness competitive advantage. With the ability to better understand market forces shaping the industry, and to anticipate the issues faced by our customers, we’re able to forge a strategy to address product gaps with tailored solutions. Our speed to market, coupled with communication in the voice of our customer across everything we do, allows us to set ourselves apart from our competitors. The more nimble we are, the faster we’re able to achieve scale and offer leading and industry-focused product solutions.
In addition to educating customers about how Snowflake’s Data Cloud can address their specific business needs, sales reps can also help customers understand how they can access the data economy in order to create new business opportunities. Part of that involves connecting them with commercial data providers and other Snowflake customers via the Snowflake Data Marketplace to share and collaborate around data. For example, our customers can learn how to access industry-specific data, such as FactSet or Weather Source data sets, by connecting them with an ecosystem of data partners and vendors already operating within our data marketplace. That could result in one or both companies creating new data products, services, and applications, thus driving revenue.
A recent global survey of senior business, technology, and data managers across North America, EMEA, and APJ discovered that only 45% of businesses have the ability to exchange data with other organizations, and a mere 22% have technology that enables live data sharing without copying or moving data. So, this verticalized motion transforms sales reps into thought leaders who help customers reflect deeply on their business, and how to overcome challenges of accessing the data economy that affect most organizations.
Provider beware: Challenges do exist with verticalization
While many benefits are found in verticalizing your sales team, you need to recognize issues companies may face when implementing this strategy.
Perhaps the biggest challenge is found internally. Mindsets and messaging must shift from solution-first to industry-first, which requires retooling the entire EMEA organization. Every function needs to rethink how to do its job. For example, professional services must change how services are deployed, and the marketing team needs to update collateral. Where one marketing piece sufficed before, you may now require five or six sell sheets in order to address each industry’s distinct focus and language.
From a sales and sales engineering perspective, everyone must learn to speak the customer’s language and sell in a verticalized motion, which requires new tools, training, and enablement. It’s best to prepare yourself for some friction in the sales organization, as sales reps are often anxious to go out and sell as fast as possible. Time is a real enemy here, which is why you should conduct training and produce enablement pieces as quickly as possible.
Hiring and training salespeople is another consideration, but I like to view this as less of a challenge and more of an opportunity. At Snowflake, we have recognized the need for deep expertise in the industries we wanted to target (financial services, manufacturing, retail, etc.), and verticalization opened up access to an entirely new network of people. By broadening our traditional “software sales” search, we injected a refreshing amount of experience and diversity of thought into the business. Our new industry leads and specialists have deep expertise and connections in the region, and they have taught the industry jargon to those who know Snowflake, and vice versa. It’s vital that, in this new environment, we’re focused on business partnering with industry leaders to support those all important customer and sales conversations to extend lifetime value.
An obvious challenge in EMEA is the multitude of countries and languages at play. However, it’s important to recognize that verticalization also has its own language. In many ways, industries represent more of a shift in thinking than location. Some industries are more conversative, while others are more hierarchical, and sometimes cultural differences are layered on top of these two factors. One strategy is to hire local experts who ensure you interact and conduct business appropriately on every level.
Regulatory environments also matter a lot. For EMEA, you must manage clients who have to adhere to regulations such as GDPR and data residency and protection. It’s absolutely a concern for every single target customer you speak with, so you must address these and any regional or local regulations in your sales process and contracts to ensure you can address customer questions and get past all of the regulatory hurdles.
When should a company verticalize its sales team in EMEA?
I am of two minds when it comes to the timing around verticalization. My gut response is that you should verticalize as soon as you can, assuming you have enough people to support this motion without damaging the rest of your business. I recommend verticalizing your core markets fully and your secondary markets as much as possible, but I believe it’s wise to hold off on any new markets with small teams until it’s both feasible and desirable.
My more bespoke answer is that verticalization is not a one-size-fits-all action and depends on a multitude of factors:
- Solution. The first consideration is what you’re selling. For example, specific IT solutions (traditional infrastructure, application performance monitoring solutions) won’t benefit much from applying industry-specific use cases. However, if you’re selling a vision and a product that changes the way business is done across different types of companies and industries, then you will want to tailor sales to suit vertical customers.
- Market maturity. Companies that are new to a market or launching a new product will usually need to evangelize the solution first. The focus is on finding a market fit and selling products quickly, which doesn’t open up the ability to dive deeply into an industry. In general, verticalization is a better strategy for more established companies.
- Sales reps. Young companies or those launching in new markets are also unlikely to have enough sales reps. Even larger companies will need to establish an on-ground presence in a country or region if they want to verticalize properly. Numbers matter. If you must hire an entire team while verticalizing, you will face an uphill challenge.
- GTM strategy. If your target buyers have different challenges or needs across industries, then verticalization can help you better position and sell your solution. Again, if you are selling a product that works the same no matter what company uses it, then verticalization makes no sense. It takes much more effort to message and position a verticalized solution, so you want to use your resources wisely.
- Total addressable market. From a planning perspective, you need to look at where you already have a footprint and a mass of sales reps to make a logical movement. Look at the total addressable market by industry and by region. Can you generate enough revenue in a specific market to justify the sales motion?
- Partner-led markets. Some EMEA markets are too remote and should remain partner-driven areas. There’s no reason to sell directly to those markets or verticalize them because partners have more experience and can better manage the sale.
How to execute and verticalize sales efforts
We learned a lot about the verticalization process in EMEA, but I caveat these best practices by stressing that it’s always best to determine what will work for your team and business. It matters what product you’re selling, your market maturity, how many people you have, and how you choose to go to market.
Consider running a pilot program in one country and for one vertical in EMEA before rolling out to the whole region. We conducted a pilot by creating a financial services sales team in the UK. We picked a vertical with a high concentration of target customers, a known market need, the ability to hire industry experts with ease, and lots of great research and information to consume in order to understand the vertical.
Our pilot program allowed the entire team to see how vertical sales work, empowered us to work out any kinks with operationalizing our strategy, and helped us determine how to best scale verticalization across the region. After our pilot, we were able to plan and fully verticalize EMEA in about four months.
To launch a pilot, look for the most logical and easiest test ground possible where lots of opportunity exists. That requires examining each country you want to be in, understanding what verticals are strongest, and assessing the overall aptitude to adopt technology. This analysis not only helps with selecting a pilot location but will also be useful when you plan and roll out verticalization across EMEA.
Speaking of, any company that sells horizontally today will also have amassed data around customer sales. I recommend using data from your CRM to help make sense of which places to verticalize based on what your customers are doing today, what the pipeline looks like going forward, and what industries jump out as hotbeds for you. You may also want to couple this data with external market data to validate where opportunities might exist. And, of course, listen to anecdotal data from your sales reps. They are on the ground and often know best.
Everyone on your team must understand why verticalization matters and how it will make sales reps more successful in their efforts. To help with the transition and enablement, hire industry experts. In addition, create sales enablement training and materials that explain how verticalization works, provide industry knowledge and language, and educate sales reps on the use cases of a specific vertical and explain how to sell the solution in that context. In addition, it’s critical to encourage sales reps to read industry-focused resources and watch videos to become well-versed.
With that said, the one thing I would have done differently was to engage in real-world scenarios sooner. Sales reps learn best by doing something and then practicing it. Reading and watching are never enough. If they don’t speak the language in the real world, it will never become comfortable or natural. As such, I recommend conducting practice discussions with real customers and inviting honest feedback. It accelerates learning and makes verticalization a more natural sales motion.
Horizontal use cases
It can be daunting to think about enabling end-to-end verticalization of an entire sales organization. One way to make it easier is to start by educating sales reps on use cases that act more horizontal in nature.
For example, consider how many industries use supply chains or want to develop a customer-360 view. While the specific wording may change, these types of use cases represent an easy place to start because they address more universal challenges. You can enable the entire sales organization because it’s the same basic use case across industries, with only some slight differences. This strategy may be less intimidating than diving into industry-specific challenges right off the bat.
At Snowflake, external market forces and global situations have thrown up supply chain obstacles across multiple industries (manufacturing, retail), so we enable sales reps by teaching them how the Data Cloud brings together metrics, from weather, shipping containers, ports, and other relevant sources, and integrates these data sets to make sense of it. It’s not only an opportunity for a sales rep to help the customer understand how data can clarify supply chain issues, but it’s also an opportunity for sales leaders to enable a large segment of sales reps at the same time because use cases are often similar across industries.
Your solution or consulting partners have likely been verticalized for a long time, and they have practices built around vertical GTM strategies. They already speak the language of the industry, so it’s much more comfortable for them to sell your solution in that language than to learn your horizontal technology language. That’s why, in my opinion, verticalization only benefits partner relationships.
As helpful as our partners were before, I’ve had many game-changing conversations with them during and since our verticalization. It’s smart to lean on your trusted partners and ask them to help you make sense of where best to target your efforts. They’ve been in this world longer than you and can provide a gut check on how to handle situations.
Think through which success metrics will matter most to your organization and how you can demonstrate success with verticalization. Revenue, growth targets, hiring metrics, and market penetration are some common things to track, but there are likely internal success metrics that you should track as well.
For example, we care about market penetration at Snowflake, but what we really want are market-moving accounts in each industry. It’s the nature of our solution that we want to become the Data Cloud solution for each industry in EMEA.
While the success metrics are the same whether you’re verticalized or not, a verticalized sales motion makes the process of targeting and selling to those industries faster and easier for the sales reps.
Align EMEA verticalization with your business
Verticalization should make sense, not only to your customers and sales reps but also to your company. Your EMEA sales efforts should be integrated into the global sales efforts.
When speaking to other parts of the organization, I believe in simplifying the verticalization message. I always say: we are country first, vertical second, and segment third. For example, I have a UK financial services enterprise team or a UK manufacturing corporate team, but I will never say we have an EMEA manufacturing vertical. It just doesn’t work. How you speak about verticalization may sound like a small issue, but you want it to reflect what customers look like within that vertical to diffuse any confusion.
On a final note, I urge you to keep in mind two things: 1) Some industries will take significantly longer to penetrate, so you need to be thoughtful about how much energy you’re willing to put into a region and the required customer education; and 2) some countries and industries might not be the right place to verticalize. Be honest about your chances for success and select accordingly.
It’s the best way to ensure that verticalization sends your sales… well, vertical.