Selling to state, local and education (SLED) government agencies can be a tough venture if you don’t know how to approach the market and present your product or service.
Before your business thinks about responding to a bid or RFP from a SLED agency, prepare your company for success by making sure your business can check off the following 5 boxes:
1) Approach the SLED market strategically:
The SLED market represents five unique levels of government (state, city, county, education and special districts) representing around 30,000 purchasing agencies that are buying products and services for around 90,000 unique entities. This vast market, where each purchasing entity may have unique processes and procurement requirements, may seem overwhelming at first but developing a strategic approach at each level will help to alleviate any reservations.
Even in this complex market, the development of a robust SLED strategy is possible and lucrative. SLED agencies spend over $1.5 trillion annually, 3x more than the Federal Government and taking the time to devote resources to building a SLED market business plan is a worthwhile endeavor.
2) Know the government agency’s buying cycle:
SLED government agencies are reliable clients and there's little danger they'll skip town and not pay the bill. However, it can take a while to receive payment even after the work is completed — sometimes up to 30 to 45 days after completion. Make sure you figure this longer payment cycle into your budget planning.
Unlike the Federal Government, SLED agencies set their own fiscal year schedules and their spending patterns often align with their unique start and end dates. It’s important to understand your target agencies fiscal year and spending patterns to pinpoint the best time of year for marketing.
3) Understand your value proposition:
What does your company do? More importantly how can you help solve an agency’s problems? It’s important to be able to clearly articulate what’s unique about your product or service, how it separates you from the competition and the value your offering bring to the table that your competitors’ offerings do not.
How have your customers benefitted from your product or service in the past? It’s important to be able to provide relevant examples of past government or private sector customers when responding to a bid.
4) Preparing to sell to SLED agencies:
Target and research the agencies: Study past procurement habits, identify upcoming contract renewals and identify future spending by looking at budgets and planning documents. Organize and fill your pipeline with near-term opportunities (0-6 months) and long-term opportunities (6-24 months) to effectively manage your opportunities.
Collect important agency contact information, such as job functions, email addresses and phone numbers. Make sure this this list is refreshed regularly and the key contacts are on a first name basis with your sales reps to remain top of mind with the agency.
Understand the agency’s missions, goals, recent initiatives and if they have a preference for local vendors. The better you understand how an agency operates, the better you’ll be able to collaborate with decision makers and influence your chance of winning.
5) Identifying the right SLED opportunities for your business:
When searching for SLED bids and RFPs for your company, ensure that you have the capability to fulfill all requirements of the contract first. If your business does not have the scale to fill the requirements, you may consider teaming or working with partners.
Is your past experience adequate enough to effectively execute on the contract requirements? Many agencies will accept case studies of similar scope and size from private sector work if your business doesn’t have much public sector experience.
Research the competition. Understand what their product or service is, what contracts they have bid on, what regions they are strong or weak in and which contracts they have won or lost. Develop a matrix that breaks down how you rank your product or service in key performance areas against your competition who have bid on similar projects in order to identify a “sweet spot” for your business.
If your business is preparing to sell to SLED government agencies, all of these points will help you manage and scale your contract management process. Understanding and organizing your efforts around fiscal year schedules and agency purchasing patterns will help your effectively managing your bidding activities in this complex but lucrative marketplace. Once your business is confidently able to check off all of the 5 boxes above, you’ll be able to begin preparing your first bid or RFP response.