How are defense suppliers adjusting to life after Sept. 11? Most are treading lightly, cognizant of regulations and the automated systems used by the Defense Department that can shut out overly zealous suppliers.
Take W R Systems Ltd. (WRS), a firm that already handles, among other projects, a $170 million engineering and consulting contract for a three-dimensional navigation system used by the U.S. Navy. About 85% of WRS revenues come from the federal government.
``Sept. 11 has brought up and intensified our awareness to the fact there are issues of vital importance to national security, primarily homeland defense,’’ said David K. Edwards, VP and director of engineering of the Reston, Va.-based company. ``We’ve taken into mind with all future products how our products and expertise will aid in making our homeland interests more secure.’’
WRS has been fine-tuning its communications with Defense Department customers, who are the best sources for information on future requirements. Since Sept. 11, it has been evaluating what its Department of Defense customers will need to effectively combat terrorism in the United States and abroad. Specifically, WRS business development experts have been scrutinizing comments made by everyone from U.S. Secretary of Defense Donald H. Rumsfeld to trade association leaders and military experts.
WRS treads lightly when it comes to marketing to the Defense Department. Edwards notes there are Defense Department rules that curtail some marketing activities that would be perfectly acceptable in the private sector.
WRS knows that the central challenge is to develop new technologies to leapfrog current Defense Department systems. So it has initiated a coordinated effort to develop product proposals for vastly improved airport, rail, bus, rental car and truck rental security systems, said Edwards.
At the same time, WRS is trying to expand its markets in the private sector.
For example, it has taken expertise gained through military work to produce e-business software to be used by the utility industry and found private-sector buyers for "rugged enclosures" – those able to withstand forces equal to the strike of a 600-pound hammer. The products were originally developed for the military.
The idea is to grow WRS’ private sector business so its best employees can swap between public- and private-sector applications, Edwards said. If the company can leverage its skills into the private sector, "we can offer incentives to retain good people. There is a commercial base there to make sure we can retain experienced people,’’ said Edwards, who manages a 170-employee office.
While WRS is low-key in its public relations efforts and development of marketing materials, its private-sector subsidiary, Innovative Fiber Technology, has a dedicated sales force and is developing in-depth marketing messaging and collateral marketing materials.
``Some companies have tried to aggressively market to all sorts of agencies, and the government frowns upon it,’’ Edwards said.
Indeed, a faulty direct marketing program can be disastrous to a b-to-b defense-industry supplier, said government-marketing expert Mark Amtower, president of Amtower & Co., Highland, Md.
A program being used by the Federal Web Master office—a centralized federal agency that taps the brainpower of Web masters in all agencies to make the government’s Web content management, networking speed and network infrastructure as good as possible—identifies when corporations are sending e-mail to a lot of different people. That office has the authority to turn off inbound e-mails from a corporation’s domain without notifying the company involved, Amtower warned.
``Spamming sites is a great danger because, if you violate the thresholds, you’ll never have access to that agency, and you won’t even know it,’’ Amtower said.
New defense suppliers spring up every minute, Amtower added.
Hours after our interview, Amtower was meeting in Pennsylvania with ``a little company of a few guys’’ who have come up with a hacker-identity program that reportedly can quickly trace the source of denial-of-service and other attacks. As a marketing specialist, Amtower will likely advise the start-up to develop third-party verification that the product works, then begin building its own opt-in e-mail list. Later, as the prospective client moves toward landing government contracts, they might place ads in print publications such as Federal Computer Week, Government Computer News and Government Executive, or in their e-mail or Web site properties, Amtower said.
For first-time defense suppliers, e-mail newsletter sponsorship is preferred over the rental of Defense Department buyer lists. Newsletter sponsorship can be cheaper than the $200 per thousand rental and $50 e-mail brokerage fee charged for rentals, Amtower said.
Web development also may come into play, he said. Sites that have third-party news feeds and research data can win substantial mind share quickly, Amtower said. ``The information portal idea is very much alive in government marketing,’’ he said.
Fern Krauss, a partner at ESTN Communications Group LLC, Silver Spring, Md., said WRS has it right. Public relations and marketing must be handled delicately when it comes to the government, she said. ESTN specializes in branding and positioning for government suppliers.
``The whole idea of marketing is to get the word out, and government agencies are moving toward commercial practices,’’ Krauss said. ``But if your main contract is with the CIA or intelligence communities, you might not be able to tell anyone anything to market yourself better.’’
Sales, marketing and PR experts said industrial company executives should watch how WRS and other defense-industry suppliers interact with the federal government while pursuing a private-sector agenda.
Richard Mackey, president of CapITal Reps LLC, Reston, Va., makes a case for selling to the Defense Department and other agencies, and says interest in the area currently is at a peak.
``In this economy, government is a predictive environment,’’ said Mackey, whose sales rep company specializes in representing computer-industry clients to government buyers. ``Where else do you have a client who tells you how much they’ll buy each year, how much they’ll pay and has a formal complaints process to resolve ongoing business issues?’’