What’s really involved in selling to the government?
Q. What’s really involved in selling to government agencies?
First, let’s define the government. For many, this is the federal government, which includes the Department of Defense (Army, Air Force, Navy, Marines, Army Corps of Engineers, Defense Logistics Agency). But there are many civilian agencies in the federal government. Then we look at the state government, not only our state, but the other 49 states plus territories as well.
Then we start looking at universities, hospitals, colleges, cities, counties, school districts, road districts and numerous non-profit agencies that receive grants from any of the above. Any agency that spends money on behalf of a governmental entity should be considered as a source of potential governmental funds.
There are many basics to selling or marketing to the government. While we know the government buys every kind of good and service imaginable, the seller has to have a product or service of significant quantity and quality to meet the government’s demands. And these have to be available when and where the government needs them!
Here are a few essential considerations.
- Past performance. Businesses should have a really good track record in selling to their commercial, industrial, wholesale or construction clients prior to marketing to the government. There are several reasons for this. First, past performance is oftentimes an evaluation factor requirement in a government contract. Second, a government contract may take more time and paperwork than a novice businessperson typically handles. Third, the government is strict on paperwork requirements for administrative reasons. The invoice, ship to address and all contractual paperwork must meet government contract requirements. Fourth, the government has strict acceptance requirements (quality, time, delivery) for products and services they purchase. Last, we hope that a profit-seeking company will not underbid costs just to get a foot in the door.
- Unique requirements. Every governmental agency has unique requirements to market to its buying and ordering offices. Thus, different criteria and steps in marketing to these buying offices are required. For instance, federal agencies require that a firm be registered in the System for Award Management (SAM) as a requirement to do business with them. Some military bases require appointments and passes to enter their secured facilities. Others allow relatively easy access. Other DOD buying agencies require first-article testing for items produced for their agencies. Almost all buying agencies want to know that your business will produce a high-quality item or service and deliver it on time or earlier. One way they confirm this is to check with the references you provide. (Good references make it easier to sell to the government.) Hence, as noted in number 1, the need for strong past performance.
- Know your target market. This is more important than many salespersons realize. Contracting officers don’t keep all that stuff they buy. The contracting officers buy for the technical end user, consumer or using activity. That is whom you must find. Then determine what service they really need. Before you try to sell to the government, you really need to know what service they are trying to buy. By interviewing the end user, you can ascertain their needs, who your competition is, what price /quality range they are looking for and any warranties that are expected.
- Computers and technology. Computers, Internet capability, voice mail, and Web pages are now a basic requirement for most businesses. While it is possible to market and sell to the government without technology, it is increasingly difficult to do so. Bidding opportunities can be on your computer when you walk into the office in the morning. You can email to get the solicitations on which you want to bid. Spreadsheets allow you to calculate all materials and labor necessary to make a profit. Being able to correspond with clients, customers and suppliers with exact specifications is extremely important with short lead-time requirements. When using voice mail, leave fully descriptive messages with a call-back name and number.
- Web pages. There are important (free) websites on which firms should register if they want to pursue government contracts. First is SAM, already mentioned as required for federal contracts. Second, the Small Business Administration provides a website for small businesses called the Dynamic Small Business Search. This site is user-friendly and allows you to list everything the buyer would want to know about your firm, including references! Buyers can search by county, city, keywords, etc.
- Research. Create a government marketing plan. Who among your competitors is selling to governmental agencies? What prices are they demanding? (Freedom of Information Act and Sunshine Law allow you to know this!) What agencies are buying your product? This can be determined also with a little research!
- Market niches. Special categories exist for businesses that meet certain qualifications. The government has goals for doing business with small, woman-owned, minority-owned, disadvantaged, veteran-owned and HUBZone certified firms. Each of these market niches gives the business owner an advantage in selling to the government. Certifications are often required, which can be generally obtained through an application process. State government also has minority, woman-owned and disadvantaged business enterprise categories and certifications available.
- Market. There is a great deal of work in this one word. MARKET. Meet the right people. Listen to their needs. Find your niche. What can you offer that helps the government? (Remember reputation, quality, price, delivery, continuity and competitive advantage.)
- Network. The Missouri Procurement Technical Assistance Centers provide numerous marketing opportunities throughout the state. Attend government marketing conferences and meet as many government buyers AND prime contractors as possible. Then, keep in contact with them. Look for subcontracting opportunities with them. Join professional organizations that do what you do. Ask for meetings about government opportunities.
The list of things a business should do to become successful in government marketing is very detailed. For some, the effort is well worth it.
For help exploring selling your product or service to the government, contact a procurement specialist at the Missouri Procurement Technical Assistance Center near you.