Marketing to government

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The U.S. government spent, in total, $2.363 trillion on products and services in 2005, according to research and data company Global Insight. That spending is expected to increase to $2.5 trillion this year.

"The U.S. government is the No. 1 consumer in the global economy-it's the Fortune 1," said Steve O'Keeffe, president of marketing agency O'Keeffe & Co. and executive director of the GovMark Council, an association of IT industry companies committed to the business-to-government market.


There are two fundamental ways to size up a target government audience, said Nabeela Khatak, director-marketing and business development for Strategic Communications Group, a public relations agency.

One is to look at all the verticals within a horizontal government. "You have to identify what you want to sell and to whom; you can't approach the government market without focus," Khatak said.

The other way to size up the government is on the federal, state and local levels, Khatak said. One of the biggest misconceptions about the government market is that the federal government spends more money on products and services. The opposite is true. In 2005, state and local spending topped $1.485 trillion, while federal spending was only $878 million, according to Global Insight.

Marketing to all three levels of government, however, presents its own advantages and disadvantages.

The federal government is centralized, and marketers can approach the major entities-such as the Department of Defense-in the same way they would approach a major corporation. However, to sell at the federal level requires that you get on the U.S. General Services Administration (GSA) list of approved vendors, said Mark Amtower, government marketing guru and author of "Government Marketing Best Practices" (Amtower & Co., February 2005).

"Getting on a GSA schedule is not that difficult, but there are many nuances in the process," Amtower said. "Unless you have successfully gone through that process before, you should probably not attempt it on your own. The contract terms and conditions are quite unusual, so you should seek an experienced negotiator to help."

Even getting on a GSA schedule is no guarantee of success. "You have to go through a stringent bidding process to win federal business," Amtower said. "But once you win a contract and satisfy a government client, it becomes increasingly easy to win more contracts."

While state and local government markets may be more lucrative, they are far more disperse and difficult to engage. "There are more than 80,000 local governments in the U.S.," Amtower said. "It's a large, spread-out marketplace, and each one has its own special contracting process."

Reaching state and local decision-makers often takes a national marketing campaign, said Robert DeMarzo, VP-publisher of VARBusiness magazine. "The key to unlocking local markets is for vendors to tailor their messages to specific [jurisdictions] and to reinforce their local presence by partnering with local distributors or service providers," DeMarzo said. "In many cases, local governments are required to do business with local vendors."


Engaging government procurement officials in the buying process is something that takes time. "Vendors must realize early on that the government at any level is not a quick- return market," O'Keeffe said. "The sales cycle can take several months to even more than a year, and sometimes it can be dramatically affected by the election cycle."

Most government buyers and end-user influencers respond well to the full slate of marketing vehicles. "Public sector officials read the same business publications that their counterparts in private industry read," Amtower said. "They also go to some of the same events."

There are also magazines and events that they read and attend that are government-specific, O'Keeffe added. "But the trick with advertising is that you don't want to spread yourself too thin among too many of them," he said.

For events, figuring out where to make a presence can be a daunting task, O'Keeffe said. The GovMark Council has put together a guide to IT conferences called "The GovMark Guide to Tradeshow ROI." "The bottom line is that you want to be at focused events attended by real decision-makers," O'Keeffe said.

The Internet has become an increasingly influential medium for reaching government buyers. "It is virtually suicide for a company that wants to sell to the government to not have a dedicated Web page or microsite targeted to government procurement officials," said Elizabeth Shea, co-founder and principal of SheaHedges Group, a marketing agency. "On that site needs to be the GSA schedule and the ability to make credit card transactions-federal buyers can purchase up to $2,500 at a time on a credit card without going through the GSA bidding process. Ideally, it should also feature governmentcentric case studies as well as past-performance metrics."

Whatever tactics you try, it takes time, patience, money and a long-term commitment to succeed in marketing to the government. "Lots of vendors try to put their little toe in to test the waters, but the vast majority of them will fail immediately," Khatak said. "When you show that commitment, the government will respond and will pay you immensely for it."

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