Understanding How Government Buying Decisions are Made
Most companies want to tap a larger share of $3.25 trillion in annual state and local government and education spending, but how many of those companies truly understand how government purchasing decisions are made?
Not enough, according to a former mayor and a former government CIO who spoke Tuesday on an e.Republic webcast about what makes companies successful in selling to the public sector.
Dugan Petty, former CIO of the state of Oregon, and Mark Funkhouser, publisher of Governing magazine and former mayor of Kansas City, Mo., gave an insider’s perspective on government sales during Do You Understand How Government Purchasing Decisions Actually Are Made?, the third in a series of free e.Republic webcasts covering the 10 Laws of Government Marketing & Sales.
The complex, risk-adverse government procurement process can make even the most seasoned salesperson cringe, but there are ways to make the process more effective, and a lot of it has to do with ensuring your efforts are directed at the right audience.
Here’s a closer look at how you can better understand the people behind government buying decisions so you can tailor your approach to each member of that audience.
— Look beyond the C-Suite —
The biggest mistake most companies make is believing government buying decisions are made by one person, specifically, someone in the C-suite. In fact, says Petty, most government buying decisions are made by groups.
“The decision to buy is usually made by a committee,” says Petty.
“The C-suite primarily oversees the process and the different groups involved to make sure the process is orchestrated, and the award is made in the best interest of government.”
In cases where the CIO is a key decision maker, it’s critical to understand he or she has most likely been on the job less than two years and will tend to depend heavily on staff when it comes to decision making.
— Know the individual players, their agendas and how your solution maps to their cause –
Don’t neglect the multiple points of purchasing influence in the procurement process. Look beyond titles and focus instead on the roles people play in the purchasing process — are they initiators, influencers, decision makers, gate keepers? Multiple titles can play a role in purchasing, and each of those roles also likely has the power to veto a project.
There’s also often a champion behind each project, and that person may not always be obvious. Petty said while he was serving as CIO in Oregon, the Department of Public Safety launched an electronic ticketing system. A lieutenant was the champion behind the project, but most companies didn’t dig deeply enough to find that out.
“Listening is key to finding that key person you need to know,” says Petty.
Understanding the organization and where it’s headed is also critical. Look at strategic plans, budget documents and leadership priorities.
Have conversations with the appropriate players about what’s in the strategic plan, where the jurisdiction is going and what solutions they are most likely to look for next.
Keep an eye on external variables that can shift the course of investment as well. For example, a jurisdiction that’s recently suffered a cybersecurity breach may look to increase security spending.
— Know the difference between government professionals and public officials and their priorities —
“A government professional approaches purchasing decisions as a series of problems to be solved,” says Funkhouser.
“They are looking for facts and information that will enable them to solve a problem. Elected officials, on the other hand, want to accomplish the things they’ve promised and generate positive press.”
The key is thinking about those difference and taking the time to figure out how your solutions can help each audience reach their individual goals.
“It’s more important to focus on positioning yourself to solve a problem and providing information than selling a product or service.”
“But no matter who the audience is, above all it’s about asking the right questions and listening.”
Hear the discussion here:
Resources
If you missed the webcast and would like to watch a recorded version, it is available here.
Want a copy of the presentation slides? Get them here.
Want to learn more? Download our complete guide to the 10 Laws of Government Sales & Marketing.
Don’t forget to register for our next webcast: Episode 4: Make it easy for government buyers: Building an effective contract strategy.
