Why Selling to the Government is Unique
Growth Orbit Insights
Sales can be chaotic at times. You must keep a lot of things in mind at once to succeed. Arguably, this statement holds true in selling to the government more than any other industry. B2G lead generation for the public sector is complex and unique. It requires an understanding of the rules of government, its processes, and its language.
by Shawn Harrington
Start with what you Know about Lead Generation for the Public Sector, Then Ask Questions
Before we dive into the unique aspects of government selling, let us look at some similarities between generating leads for B2G compared to B2B. Here at Growth Orbit, we believe sales success relies on a process. Our Sales Development Representatives (SDRs) lead conversations with insight and utilize proven sales methodologies to generate high quality leads. But before ever picking up the phone or sending an email, our SDRs must embody an in-depth knowledge of the solution they are selling, including:
- What are the differentiators?
- Who is the Ideal Customer Profile (ICP)?
- What are the pains, fears, and needs of the ICP?
With this information in hand, they must marry pains and needs with the unique solution they are selling. Then, they can find valuable information about what is important to their prospects and use it to customize messaging. This customization will allow SDRs to have insightful conversations, gain market intelligence, and generate quality government leads.
Unique Aspects About Targeting Government Entities
Before we outline the challenges of generating leads in the government sector, let me tell you the good news… you will have more conversations. It is easier to connect with government prospects than with the private sector. Yes, government employees are more likely to pick up the phone. Why? Part of their job is to serve the needs of their community. So, they spend a good portion of their day helping constituents on the phone. Does this lead to more leads for B2G? Not necessarily, but it does help gain vital market intelligence.
Market intelligence helps uncover decision-making processes, determine personas to target, identify upcoming opportunities (RFPs), understand the agency’s needs, and more. In some respects, market intelligence is just as important as a lead itself. It is useful to craft customized messaging, create digital campaigns, and help with other sales and marketing activities.
Another great aspect of B2G sales is that all their information is public. In other words, building B2G lead lists and identifying contacts is easier than in the private sector.
Adaptability and Patience Helps in Selling to the Government
If I could describe how to be successful when selling to the government in two words, I would say – adaptability and patience. Generating leads is never easy but generating leads in the government sector requires a special acumen. First, there are several crucial factors to take into consideration when selling into this space including:
- Market size
- Purchasing processes
Many companies see the government as an unlimited market space. Yes, the public sector itself is vast… a business can sell to the Federal, State, or Local governments. Then within each, a countless number of departments, offices, boards, and divisions exists. Looking at the local level alone, counties, municipalities (cities, towns, and villages), and special districts provide for the specific needs of their populations. Each area then has its own set of departments which serve specific functions for the community, such as:
- Police and Fire Departments
- Health Departments
- Housing Services
- Transportation Services
- Public Works
Bigger, however, does not always mean better. With such a vast market, a company can waste a significant amount of money, effort, and time targeting agencies and individuals with no purchasing power. Therefore, defining your TAM (Total Addressable Market), SAM, and SOM are vital to concentrate your time and resources on the best potential buyers.
Overlapping Government Layers Contribute to B2G Sales Challenges
Adding to the complexity of public sector sales is the fact that every agency has its own set of rules and regulations it must abide by, including state and local laws. These laws are ever-changing, so it is advantageous to keep abreast of updates to spot new opportunities. For example, laws centered around products related to industries like cannabis are particularly complex. Decisions typically are made at the local level and change based upon variants in the products themselves. This makes defining your TAM difficult because it is a constantly moving target.
In addition, each agency possesses some autonomy and has their own preferences on how to conduct business. Even local departments with the same constituents may have different processes in place. Therefore, possessing the ability to adapt and research is a key to success in selling into this sector.
Align Your Sales Process with Complicated Government Purchasing Processes
A prospective customer moves through their buying process, not your company’s sales process. To properly engage prospects, we must focus on how they make buying decisions. First, let us define if decision-making is centralized, quasi-centralized, or decentralized. Typically, the answer is, “it depends.” Decision authority varies depending upon several factors including the product itself, length of contract, and price. Centralized decisions are made by one entity on behalf of all the organizations which roll up to it. For example, a State Department of Information Technology may make purchasing decisions for software used throughout all state departments. The idea is to improve cost efficiencies, provide expert guidance, and save time; but on the contrary, centralization also is seen as rendering departmental needs as powerless.
Not All Decisions are Centralized
Decisions also can be made at a quasi-centralized level where multiple municipalities or departments collectively pool resources to maximize their purchasing power and conserve time. This is usually done at the local level where a few departments join forces.
Finally, there is decentralization. Each agency makes their own purchasing decisions. Although this allows for the utmost in customization and accountability for an agency’s unique needs and the needs of their community, it typically is not as cost effective and is more time-consuming.
Selling to the Federal Government Requires a Contract. Holding a Schedule contract requires effort and commitment to succeed. The GSA Multiple Schedule Award Program is the contract vehicle for vendors to sell products and services to the federal government.
Engage All Personas Involved in the Buying Process
The next question is, “who do we need to target at the agency or agencies?” Typically, purchasing decisions are not made autonomously. Instead, multiple individuals, a committee, or a board are involved. So, it is important to not only target decision-makers, but influencers, initiators, and gate keepers as well. Also, do not assume the people purchasing the product will use it or even understand the end-user’s pain or needs. Instead, the key is to target by persona and customize your messaging based on their objectives or goals. Typically, someone in a financial role will be more concerned with costs and improving profitability. While a prospect in operations is concerned with streamlining processes and improving efficiencies. Pivoting your conversations and messaging based upon their unique goals, KPIs, and objectives adds value and helps lead them down a path where your solution is the hero of the story.
Government Purchase Decisions Depend Heavily on Fiscal Year Start Dates, So Timing and Patience are Key
As the saying goes, “timing is everything” and that statement holds true when selling into the government sector. Here are a few questions to think about:
- Where are we in the budget cycle?
- Is there an upcoming election?
- Has the agency released a Request for Proposal (RFP) or is one upcoming?
Like many other aspects of government, budget cycles vary. Below is a quick snapshot of fiscal year start dates for some government entities:
When generating leads for government, it is good to keep these timeframes in mind. For example, the Federal Government’s fiscal year runs October 1st through September 30th. As a result, buyers spend a lot of time in the fall and winter, planning for purchases that will happen in spring and summer. In late summer, a buying frenzy often occurs when buyers need to either “spend it or lose it.” All levels of the public sector follow a similar pattern each budget cycle.
Sales Activities are Year-round Despite Fiscal Calendars
Although it is important to understand where an agency is in their budget cycle, lead generation is a continuous activity. In other words, do not just jump on the phone during fall and winter. Throughout the year prospects are learning about products to help with their pains and needs. In fact, it is common for agencies to plan years in advance for purchases due to the complex budget cycles.
The next question arises, “Did the product make it into the budget this year?” If not, the prospects should be added to a drip or nurture campaign to keep the solution top of mind. Also, SDRs should re-engage with the prospect within a designated timeframe to make certain sales opportunities are not lost.
Often it takes several attempts before a product finally makes it into an agency’s budget. Therefore, government sales cycles are notoriously long. With such long sales cycles, the top of the sales funnel must be wide and constantly fed to achieve financial goals and objectives.
The Ballot Box Can Influence Bidding, Buying, and Selling
Another aspect to consider is when is the next political election. The strategic goals of an agency often change when newly elected officials take office. This chess game often further elongates sales cycles.
Regardless of election results, once budgeted, B2G purchases typically are made utilizing a structured bidding process or Request for Proposal (RFP). RFPs help ensure fair competition and find the best and most cost-effective solution. In brief, they give a government agency the ability to perform a side-by-side comparison of vendors and products including their qualifications, costs, and ideas.
Be in Touch Before RFP Processes Begin
Many organizations have staff whose sole responsibility is to search for applicable RFPs and ensure company participation. Just participating in an RFP, however, often is not enough to win a bid. The key is to get to know the agency and their needs before the RFP process begins. By having insightful conversations with the decision-makers and marrying their pains, fears, and needs with your unique solution, a sales professional can help influence how the RFP is written. In other words, if the agency needs certain criteria and benefits only your solution offers, it will help you win the business.
Government Vendors Can Navigate Unique Challenges by Knowing How
In summary, many aspects of selling into the public sector are unique and challenging. It is beneficial to know the nuances of the various layers of government, their budget cycles, their election cycles, and their bidding processes. Fortunately, we at Growth Orbit have some highly experienced, top talent on our team of SDRs. Their knowledge and abilities have provided great government sector sales leads for several years and they can do the same for you.