The Government: Not Your Average Client

Despite its intimidating nature, the government can yield large, consistent orders if you learn that selling tactics differ from those of typical for-profit companies.
June 11, 2008

By Dawn McMullan

If your preconceived notion of working with the government involves red tape, narrow rules and no-frills reliability, you know the government fairly well.

If you think the government is like the rest of your clients, perhaps it’s time for a reintroduction. “Working with the government is entirely different,” says Bruce Capitell, marketing director of Birmingham, Ala.-based Military Service Co., which sells promotional products to the military and other government agencies. “It’s an animal unto itself. Sometimes it’s a monster unto itself.”

Still, having such a monster as a client has its perks. For one, when most other industries are hit by a tough economy, the government carries on. “We tend to refer to the institutional market as recession resistant,” says Kirk Chritton, director of marketing and product development at Sweet Springs, Mo.-based MCH, which specializes in business-to-institution marketing. “It’s not that [the government] doesn’t feel it, but the effect tends to be lesser and also delayed from the general economy. That said, clearly there are 22 states right now looking at budget shortfalls. But many businesses have to go on. A lot of money is going toward health care, for example.”

Mark Yokoyama, director of marketing and merchandising at New York City-based ePromos Promotional Products Inc., sees the same trend with his company’s government clients.  “In most government areas, changes come relatively slowly,” he says. “For example, most budgets and needs remain similar from year to year once a program has been established, and budgets may not be revised until a year or more after an economic change.”

Until those budgets are revised, if it comes to that, top product categories for government clients are health and fitness products, apparel and hats, and small, giveaway items such as stickers and key chains. And you can never have too many mugs.

While products, sales techniques and customer service are important, protocol often outweighs them all. “Government purchasing is designed to be fair and effective, so I think many sales techniques that would be effective in other industries are probably not going to work so well here,” Yokoyama says. “When filling out an RFP [request for proposal] or other procurement proposal, being thorough, accurate and detailed is a must. Showing that you have the capacity and experience to deliver is important. And, all things being equal, price will play an important role. Being a nice guy and following up regularly doesn’t hurt, but doing so is unlikely to impact buying decisions.”



Here are five tips to help you navigate the government maze:

1. Understand how to sell to a government entity. If you don’t know the acronym GSA [Government Services Agency], you probably aren’t selling to the government. “To get into this door, a company needs to have a GSA contract,” explains Dale Kirby, director of marketing for Sherwood, Oregon-based Promopeddler.com.

For two years, Promopeddler had a full-time employee dedicated to providing bids to government agencies. But it wasn’t worth it, Kirby says. Some winning bids were as low as 5% above cost. “You have to be up on all possible promotional product categories,” she adds. “We found that too many winning bids were secured on very thin margins. We do not feel the risk vs. reward was in alignment with our business model.”

It is possible to get around the GSA issue. While some government agencies require you to be an approved GSA vendor, many federal opportunities are publicly listed. Selling to state and local governments generally involves a procurement organization, although customers making small purchases sometimes can bypass these steps. Some government entities only buy products made in the United States or give preferential consideration to women and minority-owned businesses.

2. Track down your target buyer. Getting the name of a good contact is tricky business here. The people making the decisions traditionally don’t have standard decision-maker job titles such as marketing director. Generally, you’re looking for a program coordinator or director. The people who make the purchases may be in different offices than the person who made the decision to buy the product. “It’s hard to get to the right person,” Chritton says. “That’s why compiled files are important to get as opposed to a list of buyers.”

From there, “selling is selling,” Capitell says. “It’s a matter of finding out who to sell, contacting them, pitching your product and getting in front of them. Then give good sales and service.”

3. Understand their fiscal calendar. Unlike for-profit businesses — which benefit from coming in under budget — government entities want to spend every last dime before their fiscal year ends. For half of them, that’s the fourth quarter of the year; for 25%, that’s April, May or, most likely, June. It’s smart to keep these dates in mind and approach buyers when they’re looking to spend money.

4. Be patient. Dealing with large entities, like the military or a state agency, can be time consuming. “For larger government organizations, there may be a more involved RFP process when bidding on contracts to provide promotional items,” Yokoyama says. “The levels of bureaucracy often create a longer and more tedious buying cycle. For smaller government organizations, such as city governments, the ordering process is more similar to any other company or organization.”

5. Get the strategy. Strategically, selling to the government is much different from selling to for-profit businesses. “They don’t exist to make a profit,” Chritton says. “They’re not selling things. They exist to serve their purpose, sell their mission. You need to help the outreach of their message, helping them fulfill their mission. Don’t talk about new ways to generate sales.”

Is it worth it? For Kirby, the answer is no. Yokoyama says it certainly can be. “If you’re able to navigate the bureaucracy and win some contracts to provide products for a government agency, the main benefits are getting large, consistent orders,” Yokoyama says. “In that respect, it’s similar to having a relationship with a large corporation. Also, while a government may owe money around the world these days, they do pay suppliers. So that’s one less worry when working with a government agency.”

Dawn McMullan is an award-winning freelance writer based in Dallas. She has written for national, regional and local magazines, as well as provided commentary for Dallas newspapers and radio stations. She can be reached at dmcmullan@sbcglobal.net.

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