As the federal fiscal year winds down, Govpro asked Jennifer Schaus if she had any advice for marketers on how to make government sales as the federal fiscal year ends — especially on the final days of the federal fiscal year, through Sept. 30, 2012.
Schaus operates Jennifer Schaus & Associates, a boutique consulting firm with offices in Washington and Rome that serves the U.S., European and Asian markets. The firm helps companies analyze, assess and capitalize on business opportunities in the commercial and U.S. government sectors (including federal, quasi, state and local). Schaus’ clients sell products and services.
Go here for information on the company’s products and services in the business to government (B2G) arena. The firm hosts a B2G government contractors networking event every third Thursday at The Kennedy Center in Washington.
Govpro: What strategies should vendors employ to land federal government sales as the end of the federal fiscal year approaches?
Jennifer Schaus: We are advising clients to leave no stone unturned. In an election year with budget cuts and economic strain, you have to run the fourth quarter in fifth gear with all cylinders. There is no time like the present to capitalize on these last-quarter purchases. By leveraging B2G tools such as FBO, USAspending.gov, FPDS and others, government contractors can learn who the incumbents and buyers are.
This knowledge is power and lets them reach out directly to the individuals who purchase their solutions as well as the end users and try to wedge their way in. Any “disadvantage advantages” they may have such as 8a status, Service Disabled Veteran Owned (SDVO), Hubzone, etc. can be utilized as marketing tools to keep out competition.
The current B2G federal environment is an oversaturated market with companies “buying” contracts just to get the business, but they are not making any margins. It’s not good business sense. The ROI is taking a lot longer for companies to see; it is much more competitive, and the government buyers have to be even more cautious with purchases as their budgets shrink. They have the growing obstacle of doing more with less — and the contractors have to really make a valid case for their solution.
What sets you apart? What is your competitive advantage? How will you help government solve its problems? If you don’t have these answers and your product or service does not solve a problem and is not easily procured, then step back and re-evaluate if this market makes good business sense for you. It is not for everyone; the learning curve is steep, and the red tape is deep!
Govpro: Are there any tactics government marketers should employ in selling to federal agencies?
JS: Relationship building is part of any sales process, regardless of the vertical. Relationships play an even more important role in government sales because government is risk-averse. Gaining that trust and buy-in will take longer, but you will still need a solid solution at a competitive price with reputable past performance. Do not wait for the fourth quarter to start the sales process and expect your phone to ring with orders. The companies that are winning in Q4 have been in the game and running this marathon for a long time. They are educated about the market (how, when and why it works), pricing, set-aside advantages, teaming agreements,vehicles and multi-year contracts. This does not happen overnight.
Govpro: How would you characterize the process of selling to federal agencies?
JS: Slow and steady may be an appropriate term for federal sales. Government is slow, and contractors must be steady, considering the average first sale takes about 18 months or more with an annual investment of $80-$120k, based on some recent government contracting data reports.
Govpro: Any final thoughts as we approach the end of the federal fiscal year?
JS: Q4 is like vying for candy coming out of a piñata — there is money to be had and it’s not falling from the sky by any means, but those that are strategically positioned and have played the game before will win the biggest prizes or contracts. It’s survival of the fittest (and deepest pockets sometimes) in this B2G game!
Govpro: Are there any product or service categories that offer good selling opportunities at the end of this federal fiscal year?
JS: The IT sector and security are always good bets in the final lap. If you have run some pilot programs during the “regular season” and they worked well, you may be in a good position now to capitalize on any money that remains to be spent.
Read Yoav Ziv’s views on federal buying at the end of the fiscal year.