Five Myths about doing business with the government

 

Copyright 2008 Michael Lisagor

 

(from Winning and Managing Government Business)

With its multi-billion dollar budgets and longer-term contracts, the government marketplace can be a tremendous revenue source for companies. There are proven strategies for successfully penetrating this market. However, it's not a walk in the park. Before explaining the business development process, I'd like to debunk some common government sales mythology.

 

Myth # 1 - A new salesperson should be able to deliver signed contracts in 3-6 months.

Beware the job candidate who promises you substantial business in the first 6 months. Rainmakers are a poor substitute for a sound marketing strategy. Also, beware the chief executive officer who expects this kind of quick result. New market entrants should expect to

spend 3-6 months just figuring out what's what.

Myth # 2 - A few sales calls and the orders will be rolling in.

Unlike a commercial enterprise, where just one or two individuals might make the buying decision, government agencies have a cadre of stakeholders - influencers, decision makers and contracts specialists. Each of these people needs to be visited and convinced that a company is reliable and can meet their program requirements. This doesn't happen overnight and can take considerable overhead and patience. But, the rewards are substantial.

Myth # 3 - All we need is a GSA schedule or a local government contract vehicle and the business will roll in.

There is some truth to this. At least the all we need is a General Services Administration (GSA) schedule part. Without one, the business probably won't even trickle in. Non schedule holders are usually relegated to playing a niche role in a single agency or if they have a unique offering perhaps life as a subcontractor. Subcontracting isn't a bad market entry strategy or part of a long term business portfolio, especially for providers of basic services and computer hardware or software. However, at some point during their growth, many companies find the need to convert a significant percentage of their business to prime contracts. Also, many Federal government contracts now require subcontractors to have a GSA schedule. But, even with a schedule, companies need to implement the steps outlined in this Guide to succeed.

Myth # 4 - A marketing budget isn't necessary when selling to the government.

Government buyers have many choices. Companies need to differentiate themselves from the crowd. Articulating how their solutions meet unique government challenges and program requirements is critical. This takes professional marketing material and active participation in relevant industry and government associations and conferences.

Myth # 5 - We need to respond to as many Requests for Proposals (RFP) as possible.

I once had a Chief Operating Officer who every morning forwarded random RFPs and asked why we weren't responding to them. For every professional services and systems development and hardware RFP that comes out, there are usually at least two companies that have been marketing the client. So, companies that count on winning more than a small percentage of these types of bids without pre-RFP preparation would be better served investing their money in Vegas. On the other hand, there are many commodity type sales that only require responding to a Request for Quote. It is important to recognize the difference.