State and local governments now spend more than $100 billion on IT annually. That represents an enormous opportunity for technology companies. But while there is no shortage of opportunity to sell to government, complex, risk-adverse government procurement processes can make even the most seasoned salesperson cringe. Because government executives are responsible for taxpayer dollars, they are held to different standards than their private sector counterparts. Government purchasing is also subject to legislative, media and voter scrutiny.
The good news is, the market is easy to reach through associations, specialized trade publications like Government Technology, or sales intelligence tools focused on state and local government IT markets like GovTech Navigator. Finding government contracts to bid on, therefore, is the easy part. The bigger challenge is understanding how government purchasing decisions are made and how to stand out from the crowd. The following tips will help you increase your chances of success in this enormous marketplace:
These are the rules government officials must live by: Budget cycles, procurement regulations, organizational structures. You can't be relevant to government clients without understanding these factors upfront.
"It's so important to know these foundational elements in advance," says Dustin Haisler, e.Republic chief innovation officer and former CIO for the city of Manor, Texas. "The great thing about government and education is these are the most transparent industries in the world. You can find this information online and through a variety of other channels."
Simple web searches often will provide a wealth of information about procurement rules, current contracting methods, budget cycles and organizational structures. This data helps you understand how a jurisdiction typically buys things, as well as the timing for major purchases.
"You can glean tons of insight from understanding a jurisdiction's fiscal year. That will tell you how to time your sales and marketing campaigns," says Haisler. "You can also see contract vehicles that already are in place, and the rules for discretionary spending and what needs to go out to bid."
Understanding these factors not only tells you the landscape in which your prospects operate, it also helps you avoid embarrassing mistakes.
"I had a vendor come to me one time with a great solution for helping me manage my electric utility," says Haisler. "The only problem was my city didn't provide electricity. It was a complete mismatch and a waste of time for both of us."
Success in the government market requires understanding the people behind government buying decisions and their priorities so you can tailor your approach to each member of that audience. The biggest mistake most companies make is believing government buying decisions are made by one person – specifically someone in the C-suite. In fact, most government buying decisions are made by groups.
"The decision to buy is usually made by a committee," says Dugan Petty, senior fellow at the Center for Digital Government and former CIO for the state of Oregon. "The C-suite primarily oversees the process and the different groups involved to make sure the process is orchestrated, and the award is made in the best interest of government."
In cases where the CIO is a key decision-maker, it's critical to understand he or she has most likely been on the job less than two years and will tend to depend heavily on staff when it comes to decision-making.
Don't neglect the multiple points of purchasing influence in the procurement process. Look beyond titles and focus instead on the roles people play in the purchasing process – are they initiators, influencers, decision-makers or gate keepers? Multiple titles can play a role in purchasing, and each of those roles also likely has the power to veto a project.
The best way to increase your odds of long-term sales success is to develop a deep understanding of your prospects' situation and goals before you pitch something to them. This knowledge is crucial to having relevant sales meetings — and ultimately developing lasting partnerships — with public sector prospects.
Understand the organization and where it's headed. Look at strategic plans, budget documents and leadership priorities. Have conversations with the appropriate players about what's in the strategic plan, where the jurisdiction is going and what solutions they are most likely to look for next. Keep an eye on external variables that can shift the course of investment as well. For example, a jurisdiction that's recently suffered a cybersecurity breach may want to increase its security spending.
Strategic plans and mission statements are commonly available online, as are technology plans and IT roadmaps, which can give valuable insight into future procurements and the existing IT environment. Searching information about awarded contracts — which is often posted publicly on government contracting web pages — also can provide valuable insight into where agencies and institutions already have made significant investments.
"You need to understand who they're working with, what their existing landscape looks like and what their plan is going forward," says Haisler. "That's where you can find opportunities to align yourself to help them accomplish those goals."
To engage more effectively with potential government clients, your sales and marketing teams should learn to "speak the same language" as government customers.
"This is where you take what's happening in the market and craft it with a point of view around your product or service," says Haisler. "You speak the language of government by combining these elements into a concise and uniquely relevant message to your prospect."
Kecia Ray, former director of learning technology for Nashville Public Schools, says when she was in the public sector one of the most significant partnerships she had was with industry contacts who would help her think through really complicated issues.
"They could tell me how districts like mine were approaching similar challenges. That's incredibly helpful," says Ray.
Once you've identified the right people to connect to, and you've done your homework on the organization and its priorities, work on building a trust-based relationship with your prospects. That means arriving at meetings armed with information about how your solution could help solve the organization's challenges. Think about outside forces like technology trends and best practices that will impact the way jurisdictions use technology to address their challenges. Vendors can provide huge value by mapping these big picture trends to the specific needs of their customers.
"I liked when someone said, ‘I've read your strategic plan and I see the direction you're going. Here's why our service or product might be a benefit to you,'" says Richard McKinney, former CIO for the U.S. Department of Transportation and the city of Nashville. "That's a good place for a conversation to start. We could actually go right to the issue that I'm trying to solve."
Teri Takai, former CIO of the U.S. Department of Defense and current executive director for the Center for Digital Government, recalls a vendor who arrived at an initial sales call with an extensive matrix mapping the company's solutions to the needs outlined in Takai's strategic plan.
"We didn't buy everything," she says. "But their effort and creativity got them in the door. It showed me they were in it for the long term."
Honesty is also incredibly important to building a trusting relationship. Overselling your capabilities is one of the quickest ways to lose credibility with public sector customers. Be honest about what your solution can and can't do, says Takai. "Otherwise I start to think your company will say anything just to win business."
Also, steer clear of buzzwords.
"It's really important to be specific," says Takai. "Don't just tell me you're a ‘cloud provider.' Are you talking about data transformation, security or something else?"
Finally, remember that partnering with government begins before the sales process and continues long after a contract is signed. Focus on the relationships you have with government even after your service or solution has been procured. By treating your relationship as a partnership, you will build a foundation for successfully scaling.
Success in the government market means being in it for the long haul. While it's possible to get early, quick wins in government sales, achieving strong, sustainable scale means committing to the market. Doing business in state and local government requires a long-term view. It can be a complex market, but those that establish a solid presence find strong residual business and a much higher barrier to entry from potential competitors. Firms that take the long view have grown multi-billion-dollar public sector sales operations that continue to create lasting impact.