San Francisco (Forbes Technology Council by: Iain Scholnick July 1, 2022)
The impact that a video communication tool such as Zoom has had on nearly every single industry during the onset of the pandemic was well-received, documented and complimented. However, as companies continued to adopt a hybrid model, they realized the limitations of horizontal “one-size-fits-all” apps. Missing from these products was the specific contextual business needs of the industries they operate in. They were missing product verticalization or the building of vertically-focused applications tailored to particular market segment use cases. Since then, other videoconferencing programs have started to see great success.
The success of product verticalization within the organization and the ability for these specific business vertical-focused apps to respond to industry-wide challenges and opportunities has, according to Bessemer Venture Partners, driven up the market cap for public verticalized software, which has risen over the last decade from $71 billion to $653 billion. The jury is in: Focused app offerings are being sought after, and adopting one-size-fits-all solutions is a low-margin doom spiral to a commoditized low revenue and growth experience.
Transitioning To A One-Size Communication Vs. Verticalized Communication Model
In simple terms, what is the outcome you are pursuing as a company? If pure communications for your team and your customer is your outcome, then a broad-based system is fine—and perhaps even ideal. Examples of these organizations include museums, libraries and wellness companies. However, if a joint company and customer outcome is needed around revenues, customer growth and services delivery, you will want your communications and services contextualized for the specific business vertical that braid together different internal and third-party services, datasets and commerce with real-time communication for the best vertical outcome.
You will need to understand your internal business processes and needed outcomes. It’s important to understand that the choice between horizontally and vertically aligned solutions is a critical decision point for SMBs and enterprises when vetting new apps and cloud solutions. Horizontal solutions could check off the broadest number of boxes at any given time to meet vetting requirements. However, they might also miss industry-specific requirements such as integrations with industry-standard applications via API orchestration, revenue growth, customer stickiness and success metrics. While these may initially seem like small hiccups that can be ironed out through future workarounds, companies could ultimately find themselves stranded when the one-size-fits-all product doesn’t implement features that are necessary to grow success outcomes in their respective industries.
The Product Road Map: Why Verticalized Solutions Make Sense In The Long Run
While horizontal software solutions may continually release updates that improve the overall user experience, enterprises must remember that these SaaS companies are trying to appeal to the widest audience possible the majority of the time. These updates may be attractive to budding enterprises as they workshop how new software will play a role in their business’s future, but most of these updates won’t actually be positioned for future industry-specific endeavors. The “what could be” will rarely become the “what is” unless you go with a verticalized solution.
Software that is vertically optimized will continually look to improve the user experience and sector attractiveness in any industry. For example, horizontal video communication tools don’t differentiate their offerings much between the consumer and enterprise solutions. Verticalization can allow workflows very specific to a vertical such as telehealth, televet, mental health and field services.
In the pet care space, the industry was hesitant about the adoption boom in early 2020. Verticalized pet care solutions allowed companies large and small to cater a target per care solution directly to pet customers. While the industry as a whole has gotten better about customization, areas of improvement remain. Pet bereavement, a huge need, is a use case where verticalized tech could help improve the grieving process by improving access to support for owners after their pet passes away.
Major Verticals With Specific Technological Needs
Healthcare and finance are two good examples of industries where enterprises that adopt the best technology often see the best ROI on their investments. For example, recent research by Cedar revealed that 93% of consumers say the quality of the billing and payment experience is an important factor in their decision to return to a healthcare provider again. Additionally, 57% of consumers say they’re more likely to recommend a provider if they’re given access to a great digital verticalized experience.
To implement verticalization with these two industry examples, start by mapping out the omnichannel engagement workflows between your team and the customer or patient (i.e., calls, messages, chatbot). Then, add in the productivity and data workflows you will need for datasets such as records, chat history, payments and support history. At that point, you have a minimum viable product flow to build out a verticalized app that is contextualized for your business segment. You may need two or three product app versions, so don’t limit yourself to one “truth on the ground” app flow. Make multiple customer-type or patient-type app flows using the same logic and backend, which can be a very efficient approach (i.e., you’re just skinning your app with its market segment business and engagement context). The contextualized app flows and features can make the difference between great finance client service or great healthcare service that simply works in delivering a concise and clear experience.
As enterprises look toward the future hybrid model of work, they will realize that the one-size-fits-all engagement solution that they implemented to patch their transition to a remote model in 2020 may not be the solution that will keep up with their needs in the long-term future of the digital workplace in the years to come.