Government departments and entities represent one of the most significant sales opportunities. In fiscal 2021, the US federal government spent about $637 billion on contracts. It’s not all going to defense either – $250 billion in contract spending came from civilian agencies. When you add in state and local government procurement spending, it’s no surprise that some businesses have dedicated government or public sector sales teams.
Step 1: Assess whether government sales fit with your sales strategy first.
If your company’s sales force is accustomed to working with small businesses, enterprises, or consumers, adjusting to government customers is a significant change. Before you invest the time and effort required to succeed in government sales, assess if this opportunity is relevant to your department with the following self-assessment questions.
- Is your company based in the United States?
While not a formal requirement in every case, US-based companies often have an advantage in selling to the US government. There is a similar “home team” advantage for other levels of government (e.g., it’s probably easier to sell to the California government if your company has a presence in the Golden State).
- Are you comfortable with increasing your sales cycle time in the short term?
The government procurement process is known for its relatively slow speed. It’s not uncommon for purchases to take months. In addition, there is often significant upfront work effort required to search, analyze and respond to RFPs (i.e., requests for proposals).
- Does your company have the administrative capacity for government customers?
The number of forms, reports and other administrators involved in serving public sector buyers is considerable. Think carefully about how you will handle this burden. If this workload falls on the sales team, their productivity will fall.
At this point, it should be clear that selling to government buyers is no good quick fit for a revenue shortfall. However, a patient sales force has the potential to earn significant returns. If you’re committed to further exploring the government sales opportunity, let’s continue.
Step 2: Understand the different types of government buyers
While government buyers have some similarities in mindset and process, there are significant nuances. Let’s consider a few ways to look at potential government buyers.
Level of government
- The national government represents the largest sales opportunity. The federal government may be the most complex opportunity. A significant portion of federal spending on contractors goes to defense spending.
- State. The following US state governments have an annual budget over $100 billion: California, New York, Ohio, Virginia, Texas, Washington, Oregon, and Florida. Whether you’re concerned with infrastructure projects, education, or healthcare, the states represent a significant opportunity.
- Local. There are tens of thousands of local government entities in the US including large cities and counties. These governments need technology, employees, training, and many other services.
Specialized government agencies
It’s also helpful to consider if a particular government entity has specialized rules, regulations, or goals that may impact its buying process.
- Defense. The Defense department is the largest buyer of goods and services. Despite the challenges associated with defense sales, Amazon and Google have faced struggles from their employees related to their defense work.
- Regulatory Agencies. The US has over 80 active nuclear power plants, and the Nuclear Regulatory Commission regulates these. Such organizations may have technical concerns regarding risk management and safety.
- Travel and Logistics. Whether you look at airports or ports, these heavily used facilities all need support from vendors.
Step 3: Research the sales process.
There are formal and informal strategies to prepare your sales team for the sales process. Use both of these methods to give your sales team the best advantage.
Government websites offer a wealth of information to educate vendors on business opportunities and the selling process. As a starting point, visit SAM.gov. This federal website is an excellent resource – you can also sign up to receive updates.
Simply meeting the formal requirements is not enough to succeed. Informal research is your opportunity to use your networking skills to find out more. Set a goal to speak with 5-10 companies that are currently successfully selling to government agencies.
Your sales team’s effort in researching how government buyers work will pay off in the next step.
Step 4: Complete the proposal
In this step, your sales team will prepare a detailed response to the government’s requirements. Attention to detail is critically important because government procurement documents are highly detailed. When you first start government sales, it may take multiple proposals and presentations to make progress.
The insights you discover through networking will also help you to identify which opportunities are worth your time.
Step 5: Manage and grow the account
In government sales, there is considerable upfront investment in time and effort to win a contract. Once you have the account, it’s vital to look for ways to grow the account over time. Fortunately, you can use the same growth strategies that you would use for most more prominent organizations.
Here are some ways to grow a government account over time.
- Software companies commonly use this sales strategy. You start by selling licenses to a single department. Once that department succeeds, look for ways to expand.
- Monitor Political Priorities. Long-term success in government sales requires paying attention to politics. For example, recent legislation like the Inflation Reduction Act of 2022 focuses on climate change, among other points. Acting quickly to take advantage of new programs like this is essential.
- Become a thought leader in government. Over the long term, seek out ways to get in front of more government buyers at events. For example, look at the Illinois Digital Government Summit speakers (i.e., leaders from Amazon, Google, and government agencies). Developing speaker presentation ideas and pitching your company to event organizers is one of the best ways to leverage your current government accounts and win more business.
How To Put Your Government Sales Program On The Fast Track
Developing competence in government sales takes time. One way to achieve results faster is to bring in sales talent with a successful track record in government sales. Contact Peak Sales Recruiting today to discuss your sales growth goals. Peak’s success in helping businesses focused on the government sector includes helping GovSpend recruit four successful Account Executives.
Please visit our Blog section for further information.
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