Key selling tactics as the curtain comes down on FY 2012
Savvy contractors and vendors know that right now, before Sept. 30, during the federal government’s fourth quarter, is a great time to land government business.
And the federal market is huge. Federal government purchases of goods and services will total $1.22 trillion in 2012, according to Waltham, Mass.-based economic forecaster IHS Global Insight. The federal purchases data was reported in a recent GovPro.com article.
Govpro.com got Ray Bjorklund’s insight about the federal government marketplace and selling strategies as the federal government’s fiscal year-end approaches on Sept. 30. Bjorklund is vice president and chief knowledge officer at Herndon, Va.-based Deltek.
Deltek is an organization that contractors and vendors turn to when they need help selling to federal agencies. The company is a global provider of enterprise software and information solutions for professional services firms and government contractors. Go here to learn more about Deltek’s government contracting solutions.
GovWin from Deltek is a source for information, teaming and software solutions to help organizations find, manage and win government business. More than 2,800 companies, including small businesses, new entrants to the public sector, and large government contractors, rely on GovWin for market intelligence, consulting, sales management tools, and educational and networking events.
Here are Ray Bjorklund’s views on federal fiscal year-end selling strategies.
Govpro: Do you have any advice for marketers on how to make sales as the federal fiscal year ends — especially on the final days of the federal fiscal year, through Sept. 30, 2012?
Ray Bjorklund: Product sellers and value-added resellers sometimes can successfully advertise on public transportation in the Washington metro area this time of year and can saturate the websites of trade publications and talk radio stations. But as busy as the acquisition community is this time of year, the messaging is less likely to resonate with the federal buyer. A last-minute marketing campaign for services probably will do even less to influence purchasing decisions for those offerings.
Govpro: What are some good federal selling tactics?
RB: As always, good selling tactics involve clearly communicating how the seller’s offering satisfies an essential government need. But it’s a little late to be shaping requirements for execution in the final quarter. Since the federal acquisition workforce is stretched, we anticipate they are going to adhere to their acquisition lead-times a little more closely than they have in most years. That means that even the more straightforward procurements should have started planning in February in order to be successfully executed by September. If the seller hasn’t been working the deal during that time, probably the best selling tactic is to sit by the phone and wait for the order — which does happen toward the end of the year. As another marketing/selling tactic, government contractors can use market intelligence services like Deltek’s to help find hidden opportunities and to provide third-party assistance in determining the government’s intentions and next steps.
Govpro: How do you see this year’s federal fiscal year-end?
RB: There is a substantial amount of pent-up demand this fiscal year, due to late starts as well as the typically late appropriations. While the final quarter traditionally represents one-third of the annual federal contract dollars, this year we are estimating that the spend in the fourth quarter will be somewhere closer to 50 percent of the annual planned contract spend.
Govpro: Are there plenty of federal selling opportunities through the end of FY 2012?
RB: One-half of about $760 billion in contract spend represents a lot of remaining opportunity.
Govpro: Are there any products/services that will sell especially well as the federal fiscal year draws to a close?
RB: What we call commodities, that is, some durable items [valued at] less than $100,000 and consumable items that will be used up in less than two years, are the items we normally think about at this time of year. But we also regularly see contracts for studies and other short-term services contracts being awarded late in the year.
Govpro: How do you see this year’s federal fiscal year-end? Pretty hectic? Will some federal agencies try to push through last-minute acquisitions?
RB: Year-end spending on commodity purchases is always hectic, as we well know. Because of the slow rate of purchasing over FY2012 to date, we anticipate it will be only a little more hectic than usual. The factors that will dampen the normal expected spend rate are two-fold. First, it’s an election year; agencies don’t want to get ahead of themselves in a way that might lead to public mistakes in execution. Second and more importantly, agencies must be prudent in their spending in anticipation of the sequestration contingency. Even though the administration is not formally planning for a possible sequestration, buyers must be careful that large capital purchases now will not require sustainment spending that will not be affordable after January 2013. However, commodity (non-investment) items can still be purchased with lower risk than the larger-ticket items.