| What's the difference between selling to
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| | The "right way" of doing things in the
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| the US Government and selling to the
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| | two businesses are so fundamentally
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| Commercial market?It's like night and
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| | different that it would work out better
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| day.Sales and Marketing to the government
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| | if they took the OPPOSITE path from what
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| is truly the flip side of commercial
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| | their instincts told them. Not an easy
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| activities. You really can't believe how
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| | way to do business.Commercial to
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| different these markets are--until you've
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| | GovernmentSo what's a C-level manager in
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| actually come from one side--and tried to
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| | a commercial company, which would like to
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| go over to the other. I emphasize, tried,
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| | secure some government orders, to do?
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| because it usually doesn't work out very
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| | Given the different business cultures of
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| well!First of all, in the Government
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| | the two markets, it seems pretty
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| world, the term "marketing" is a standard
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| | daunting. Those poor government guys who
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| term. But its meaning in the government
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| | have tried to go commercial have had
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| world is very different from its
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| | their hats handed to them-does the same
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| definition in the commercial world. When
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| | fate await me?Fortunately, it doesn't
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| you hear someone talk about "Marketing"
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| | necessarily need to be so bad. If you are
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| to the government-they really mean
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| | selling services, or highly customized
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| SELLING. That's in large part because
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| | products, you may need to closely
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| those businesses that deal primarily, or
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| | replicate the government-contracting
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| exclusively, with the government really
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| | model, if you are going to be successful.
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| don't do much in the way of marketing in
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| | If you are selling fairly standard
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| the commercial sense.Everything's
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| | products, however, it may be possible to
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| DifferentIn a traditional government
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| | gain significant government business
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| contractor, there is usually no one with
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| | leveraging your normal commercial
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| a sales title. There are often a couple
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| | marketing efforts.A few years back, I was
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| of people with grand titles like "Vice
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| | running a startup commercial software
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| President of Marketing" or "Vice
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| | product group within a company that was
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| President of Business Development". These
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| | otherwise a pure government contractor.
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| people have very little in the way of
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| | It was a diversification effort for the
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| real marketing responsibilities--they are
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| | company. Our sister groups within the
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| the chief sales people of the company.
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| | company were all very successful, and
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| They are usually former government
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| | extremely well connected within
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| employees, and in the case of a military
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| | government contracting and procurement
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| contractor, often an ex-general or
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| | circles. I expected, and was promised, a
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| ex-colonel. Key to their hiring was that
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| | lot of help in placing our products in
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| they are very well connected in the
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| | large quantities within various
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| government or service branch that the
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| | government agencies and military
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| company is targeting. Included in their
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| | branches. For a lot of different reasons,
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| charter are some "light" Marcom
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| | that help never materialized. But a funny
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| activities--putting together data sheets,
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| | thing happened-this startup software
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| and coordinating a few targeted trade
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| | product group ended up with 40% of its
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| shows. In addition to the dedicated
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| | revenue from US and foreign governments.
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| "Marketing People", much of the technical
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| | This was without a government-specific
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| selling of individual deals is done at
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| | product, no real marketing advantage
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| the project manager level.Of course, it's
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| | provided by our well-connected parent,
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| not just the sales & marketing functions
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| | and no special government emphasis in our
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| that are so different in the government
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| | sales and marketing programs. Contrary to
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| world vs. commercial. Almost everything
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| | popular belief, if you have a great
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| is! The typical government contracting
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| | commercial standard product that has use
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| business model more closely resembles a
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| | within the government, the agencies and
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| grocery store, than it does a typical
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| | branches will find a way to purchase it.
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| high tech company. Margins are very thin,
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| | Our product was aimed at Network
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| but profit is pretty much guaranteed once
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| | Administrators, and their needs were
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| you've secured a contract. Up front R&D
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| | similar to their commercial counterparts.
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| ("IR&D" in government terminology) is
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| | The government market is huge, and we did
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| generally discouraged, as it's a great
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| | well in the government sector. With a few
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| way to lose money. IR&D can also be
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| | modest investments, however, we could
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| funded by the government; that is
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| | have done even better. So what steps
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| utilized heavily, but it has limitations.
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| | should a commercial company do to
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| Spending an amount(without government
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| | maximize its penetration in the
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| funding) that would be modest in the
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| | government marketplace?Tips for
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| commercial world on up front R&D can
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| | SuccessCreate a great product-Above all,
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| easily wipe out the thin margins that the
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| | your market research and product planning
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| government contracting business yields.
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| | are the starting point to success. Make
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| The government contracting model works
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| | sure to include a few potential
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| like this: Hire an ex-employee from the
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| | government customers in your upfront
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| agency that you are targeting your
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| | planning, which should ensure that you
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| "marketing" at. Leverage that
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| | don't miss any special requirements they
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| relationship to secure the contract, with
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| | might have. This is a huge market you
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| a minimum of up front product development
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| | don't want to miss.Have a modest
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| expenses. Then hire the people to staff
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| | entry-level price for your product-Even
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| the project, and of course do a good job
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| | if in a production environment your
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| executing the project. Add new "marketer"
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| | product costs hundreds of thousands of
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| from another agency and repeat.So for
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| | dollars, or even millions, it's very
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| those purely commercial readers out
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| | helpful to have an entry-level price of
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| there, this must sound pretty different
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| | less than a thousand dollars. This will
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| than what you're used to. That's only
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| | allow a motivated prospect to acquire
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| because it is! There is no Product
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| | your product initially by "going around"
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| Marketing/Product Management function in
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| | the laborious, lengthy, confusing-and
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| a true government contractor. In the
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| | often competitive-contracting process.
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| government world your "market" is one
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| | Even if you have to go through a contract
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| customer, or a small number of customers,
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| | later to secure the full production
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| who are basically specifying the product
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| | purchase price, the bidding process may
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| for you. There are a few sales people,
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| | then be "written to your
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| but as I mentioned earlier, they're
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| | specifications".Hire an experienced
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| called marketing people. The actual
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| | government sales executive-This can NEVER
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| marketing tasks are few and far
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| | hurt. It really helps having someone who
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| between-collateral creation, trade shows,
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| | knows his way around your target
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| a party here or there.Difficult to make
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| | agencies, to head your Government Sales
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| the JumpAs you imagine from the
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| | Division.Place your products on the GSA
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| discussion above, it's difficult to move
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| | schedule via an established Government
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| between the two worlds. That's the reason
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| | Reseller-Getting on the GSA (Government
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| that nearly EVERY government contractor
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| | Services Agency) via your own company is
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| that has tried to enter commercial
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| | a long and complex process. For most
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| markets in any major way has failed
| |
| | commercial entities, it isn't worth the
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| abysmally. Government-oriented companies
| |
| | effort. It's much easier to give up a few
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| typically don't have the entrepreneurial
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| | margin points to a reseller already on
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| cultures found in commercial high tech
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| | the schedule. It's much easier for him to
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| companies. They lack fundamental Market
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| | add your products. They won't do much for
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| Evaluation and Product Planning skills
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| | you in the way of promotion, and I've
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| required for success in the commercial
| |
| | found that being on the GSA schedule in
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| world-because it's not required in their
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| | most cases isn't REQUIRED to buy your
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| core market.Senior managers at Government
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| | products (although some will tell you
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| contractors are often profoundly aware of
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| | otherwise). But it does make it easier
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| all of this. They may intellectually
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| | for the customer inside the government,
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| understand that they need to do things
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| | and if nothing else, raises their comfort
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| differently for their companies to make
| |
| | level. They will know that they won't
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| the jump to the commercial side. But
| |
| | face a major hassle to buy your
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| especially if they have been very
| |
| | product.That's my take on selling to the
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| successful in the government business, a
| |
| | US government. Hopefully there's a nugget
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| difficulty emerges that won't be obvious
| |
| | or two in there that can help you. Send
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| on the surface. And this is the worst of
| |
| | me a note with a few of your own
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| all: Successful senior managers tend to
| |
| | tips.Phil Morettini is the Author and
|
| fall back on their what I like to call
| |
| | President of PJM Consulting, a Managment
|
| their "Common Business Sense", when they
| |
| | Consultancy to Software and High Tech
|
| encounter new or stressful situations.
| |
| | Companies. PJM Consulting executes
|
| Often they don't even realize that they
| |
| | special, strategic projects and can also
|
| are doing it. Unfortunately, when an
| |
| | supply interim senior management in
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| executive with a government contractor
| |
| | General Management (CEO, COO, Division
|
| utilizes their "common business sense" to
| |
| | Manager), Product Marketing, M&A,
|
| make a decision involving a commercial
| |
| | Distribution Channels and Business
|
| business, the results can be disastrous.
| |
| | Development.
|
