Selling to government and government organizations is always and forever will be alluring. One normally thinks of big (or bigger budgets anyway), long-term client potential, always getting paid, great anchor and reference client.
These things are all correct however, what is not often recognized by startups is:
The Length of the Sales Cycle
Government sales cycles can take a long time so be sure to give yourself enough time and have other irons in the fire will help to pay your bills in the meantime.
The Challenge in Leveraging
Government departments often times don’t talk to each other and in many cases, given their sheer size, don’t know each other, so leveraging one win into others can be challenging.
Bureaucratic Process
Decisions don’t get made quickly or easily in government operations. Like most large organizations, there is a very formal procurement process. In many cases, the procurement teams are trying to standardize your product or service, so being innovative can pose a challenge for them and you.
Beware the Standing Offer
Government departments will often issue standing offers for work and they can take a considerable amount of resource to complete (similar to an RFP), but they do not guarantee you any revenues. Getting a standing offer means that your organization has been really just put on the “approved” vendors list and if and when a need arises, people may or may not call you.
We have worked with, are working with and know of numerous firms who are and have sold to the government in the past. Truth be told, if you asked them if the investment of time and energy was worth it, you would most likely get a muted “yes”. A few weeks ago I was on the phone with a prospect and they had spent two years trying to sell to a particular provincial government organization (comprising of many divisions). They were successful in that they were able to get two of the divisions to purchase but were having a considerable amount of difficulty leveraging these “wins” into additional divisional sales within the province and outside. Every single time they had to start the sales process over again from the beginning.
Ultimately, I think most of these firms realized in the end that you need a healthy mix of clients to succeed both private and public. Government clients can be great in the long-term, so keep an eye on them but don’t put all your eggs into one basket.
Our recommendation, select your target markets carefully and it is OK to include government as part of the mix but don’t rely on it solely. We believe you will oftentimes find faster wins selling your B2B solution in the private sector as decisions can be made much faster.
If you need help developing a sales strategy that includes a healthy mix of target accounts please feel free to contact me.
