3 Keys To Get Your Foot In The Door With Public Sector Buyers

September 19, 2017 - 5:31 pm
By Russ Mann of Onvia Sales and marketing executives often overlook the government market – they see it as too complex and believe that it’s only for the largest players. But the truth is, there are opportunities for all businesses – small, mid-size and large – to earn significant revenue by securing government contracts. In fact, the U.S. government makes it a point to award work to local, small and minority-owned businesses. Service providers, dealers, distributors and manufacturers in a wide range of industries like transportation, IT, engineering and construction are seizing the opportunity to grow their business in one of the largest marketplaces in the world. Yes, U.S. federal, state, local and education agencies in the U.S. spend a combined $2 trillion annually, and a piece of that pie is likely being spent on the goods or services that your company provides. Here are 3 proven strategies you can do right now to break into the business of government contracting and drive sales growth by 30 percent to 70 percent. Don’t Sweat the ‘Small’ Stuff One of the unique differences in the government market is that buyers have set requirements to award contracts to small and minority-owned businesses. In fact, the U.S. Federal Government sets aside money with a goal to spend at least 23 percent of its budget on contracts with qualifying small businesses. In 2016, Federal agencies exceeded that goal with $100 billion (24.43 percent) going to small businesses and another $82 billion going to veteran, women and minority-owned businesses, according to the Small Business Administration.. The opportunity doesn’t stop at the Federal level – it also exists in abundance at the state, local and educational  levels of government. Here’s a few key examples:
  • The state of New York has a spending target of $310 billion with a small business set aside goal of 30 percent. That’s at least $93 billion worth of contracts.
  • New Jersey’s budget is $111 billion with a 25 percent set-aside goal, or at least $28 billion.
  • Connecticut’s budget is $45 billion with a set-aside goal of 25 percent, or at least $11 billion in contracts going to small and medium-sized businesses.
Don’t buy into the myth that government contracts are reserved only for large companies. Take a Proactive Approach In what other marketplace will your customer advertise when they want to buy a service? Government buyers do, and that’s unique. A common belief is that government customers do this only through a formal bid or RFP (requests for proposals) process. And while it’s always important to monitor bids as they hit the street, win-rates can be significantly increased by looking beyond the bid and leveraging data that allows you to track future spending, monitor the competition and analyze patterns:
  • Forecast the future: By studying expiring term contracts coming up for renewal and line items in agency budgets and spending plans, you can forge relationships with government customers well before the competition is aware of the opportunity.
  • Monitor the competition: Historical spending information such as award announcements and bid results can help you analyze and understand where your competitors are strong, where they are weak and unveil opportunities to expand a territory or unseat an incumbent.
  • Analyze patterns: Historical contract information can also help you monitor the performance of your partners, distributors or resellers. Studying contracting patterns can reveal when a distributor is favoring a competitor’s product line and identify opportunities to score bigger, larger deals.
Build Trust Through Contextual Knowledge The most successful companies utilize information and resources to better understand the context around a purchase and build meaningful agency relationships. This means acting as trusted advisors who understand agency goals and positioning solutions in ways that meet those objectives. Here are a few examples of strategies they use:
  • Influence the influencers: Companies too often make the mistake of limiting outreach to a single decision maker. Broaden your outreach to all key buying influencers (beyond just the purchasing agent) such as the end user, the CIO and other beneficiaries.
  • Study decision criteria: Another unique aspect of the government market is the accessibility of information. With the Freedom of Information Act, often referred to as FOIA, vendors can obtain decision-making criteria around an already awarded contract. Information like this can reveal agency buying tendencies, competitive bid intelligence and pricing insights.
The bottom line? Government agencies across the country are likely purchasing what your company offers. In fact, breaking into the public sector market can be easy, especially for small and minority owned businesses who can help agencies meet their contracting goals.   Russ Mann is CEO and President of Onvia. He had been CEO and co-founder of Covario, a venture-backed search marketing software and services company with globally recognized enterprise clients. Mann serves on the Board of Ooma, a publicly traded cloud-based telephony company serving consumers as well as small and medium businesses. Mann joined Onvia from Outerwall, where he led the turnaround and growth in profitability for the Gazelle e-commerce electronic marketplace. The views, opinions and positions expressed within this guest post are those of the authors alone and do not represent those of CBS Small Business Pulse or the CBS Corporation. The accuracy, completeness and validity of any statements made within this article are verified solely by the authors.