Guest post from James Townsend, President at InfoStrat
Selling to government agencies differs in many ways from selling to businesses. For companies accustomed to commercial sales the transition to government sales can be a slow and painful learning experience if they don’t fully understand the realities of the market. Some of the marketing and sales tactics that are effective for commercial markets do not work as well when applied to the public sector; businesses must clear a new set of hurdles to create momentum in government sales. Even the language that is used to describe the sales process is different in government contracting; for example “capture management” is used in place of “sales.”
To succeed in government contracting, your customer relationship management (CRM) system must reflect these differences and capture
the data elements and business processes which are appropriate for government capture management.
Here are nine ways in which customer relationship management is different in government contracting.
Government sales cycles are long
A government sale can easily take 6-12 months, and large programs have sales cycles measured in years. Make sure that your CRM reflects all of the stages and dates in the capture management process, from pre-solicitation to requests for information to request for proposal. Don’t forget about post proposal activities such as oral presentations and best and final offer (BAFO). Most government contractors can relate to a sales process that looks something like this:
Even in the most typical situations, the process for being selected as a vendor on a government contract can take some time. Your CRM must allow the sales team to stay engaged over the long months of a government sale.
Government purchasing information is publically available
Unlike commercial sales, most government contract awards are published and readily searchable, creating a real opportunity to give your business an advantage through quality research efforts. Onvia provides tools such as Project Center that enables you to search through contract awards by government agency and even by your competitors. Be sure to track your research in CRM. You may want to also track links to relevant news stories relating to the contract, the target agency and your competitors.
Government proposals can be complicated and expensive to prepare
Government solicitations are often lengthy and detailed, and demand not only extensive information on the products and services to be purchased but also responses to dozens or even hundreds of detailed questions. Track the full proposal review process in your CRM and host a shared proposal calendar. The complexity of the proposal effort and the size of the opportunity can help you determine the level of tracking necessary. For instance, a fast track approach might be more suitable for a task order than a full blown effort to land a new contract vehicle. You can use your CRM system to track & leverage government contract vehicles that have already been awarded such as the General Services Agency (GSA) schedule, cooperative contracts and multiple award schedules (MAS).
Government buyers are not the same as government customers
In commercial sales, the customers that you interact with during the sales process usually have the authority to make a purchase decision. In government procurement, this is rarely the case as the purchase decision is typically handled by a separate procurement department rather than the people who identify the need for the product or service. The most successful government vendors realize this difference and make sure to track both end customers and procurement officers in their CRM. When reaching out to key agency influencers throughout the capture management process, create separate mailing lists for each role so that you can tailor your messages to the specific needs of each party involved in making the purchase decision.
Teaming is an important strategy
Some companies win contracts on their own, but a large number of bids come from teams of government contractors. Your business may choose to enlist others in order to ensure fulfilment of the full list of products or services requested in a solicitation. Teaming with a company that has experience at the target agency can help you quickly ramp up and provide the customer with the comfort of working with a known contractor. You may also need to team in order to meet the requirements of the contract, such as the percentage of work that is given to a small business. Your CRM should track the roles of your team members, the information you are seeking from each of them, and it should provide a secure place for them to post documents and actively participate in proposal review activities.
Government set-aside programs limit competition for some contracts
In addition to competing on the merits of quality and price, some government contracts are restricted to companies with special characteristics, such as small businesses, woman-owned businesses, disabled veteran-owned business, and businesses from historically underutilized business (HUB) zones. One of the strongest set-aside programs is for Alaskan native corporations. If your company qualifies for set-aside contracts, you may find it easier to win than through full and open competition. If your company does not qualify, you may want to find teaming partners who are eligible for set-aside contracts. In your CRM, flag the applicable set-aside programs for each opportunity.
Market to your future and past customers
Government contractors use different marketing techniques in order to conform to government regulations. For instance, a contractor cannot send gifts to customers or prospects, or treat them to expensive meals or golf outings. Use your CRM to track the marketing activities that are allowed, particularly outreach, newsletters, email and phone marketing campaigns. Past performance is critical to winning future government bids. Use your CRM to track all your contracts and contacts for each customer, so you can stay in touch and use them as references for future bids. Your CRM can help you send email newsletters and updates to your contacts so they learn about your newest offerings and the latest contracts your business has been awarded and successfully executed on.
Sometimes an opportunity isn’t really an opportunity
In the land of opportunities, incumbents have significant advantages: They have established relationships with the customer who knows and trusts them. In addition, if you find out about a government opportunity only after the solicitation has been released, this may be too late and you’re chances of winning the contract are greatly decreased. Use your CRM to track your relationships and conversations with the procurement officers. This information can serve as the basis to rate the quality of an opportunity and help you reach a bid/no bid decision. You may want to incorporate a formal scoring system for opportunities in your CRM, assigning numerical weights to factors such as contract vehicle, past performance, and customer relationships.
Integrate with other systems & learn from your sales experience
Your CRM should have the capability of integrating with other systems such as accounting, inventory and timesheets. For instance, when a capture effort is authorized, a budget code may be assigned by the accounting department in order to track the costs of the proposal effort. Similarly, a contract win may trigger creation of project codes in your timesheet system, or an order of products from inventory or an outside vendor in your enterprise resource planning (ERP) system. By integrating and automating your sales process, a well-designed government sales CRM can help you learn from your wins and losses. Over time you will be able to better analyze patterns of past sales, such as which offerings, customer agencies and contract vehicles are most successful, as well as the performance of individual sales staff.
Ready to implement your CRM for government contracts? Learn 6 keys for getting started with crm for government contractors here.