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Apr 06, 2010
How To

Marketing to Uncle Sam: 5 Preferences of Government Agency Buyers

SUMMARY: Government spending makes up one-fifth of the US economy. With the right marketing techniques, you can get Uncle Sam to spend some of that money with you.

We spoke with a marketer who routinely sells to government agencies to learn how his team connects with those customers. Read five preferences displayed by government buyers, and information about how to become a GSA-approved vendor.
You might not have considered government agencies as potential customers, but selling to Uncle Sam could broaden your market.

Total government spending accounted for 20.6% of 2009 US gross domestic product, according to the Bureau of Economic Analysis. State, federal and local governments buy everything from packaging supplies to dental equipment -- but they donít buy from just anybody.

There is a formal approval process required to become a government vendor. And then there are unique needs and pain-points you must address for government prospects, says Dean Stier, Marketing Director, Catalog Brands, National Business Furniture.

"Government agencies rank right behind businesses in terms of our dollars," says Stier. "Instead of having a separate marketing strategy for the government, we made it a point to make it easier for them to buy furniture."

The team has noticed some key differences between government and business customers during their years of catalog and website marketing to both groups. Below are five preferences Stier has seen among his federal government customers.

Consider these preferences when planning your own B2G marketing efforts:

Preference #1. Products with GSA approval

The U.S. General Services Administration helps other government agencies make purchases. The GSA maintains a list of approved products and vendors, called the GSA Schedule (see Useful Links below).

Agencies purchase items from the schedule and from the general market, Stier says, but "each agency has different rules for the amount they can purchase from each."

Getting your company and products onto the schedule is an important first step. Youíll have to submit products for review to ensure they meet the GSAís safety, manufacturing and pricing requirements. (See the Useful Links section to find information on how to get onto the GSA Schedule.)

- Highlight GSA-approved items

Once you have approval, make sure prospects know it. Stierís team sells thousands of GSA-approved items and designates them with logos throughout the company's catalogs and website.

- Provide quotes

Itís common for a government agency to require price quotes from three different vendors before making a purchase, Stier says. To win sales, your team has to have a system for providing quotes and for ensuring competitive pricing and product selection.

Preference #2. Fiscal-year orientation

The federal governmentís fiscal year begins Oct. 1, and many agencies have a deadline to make purchases before then.

"Itís extremely important for agencies to get in before the deadline so they donít miss the opportunity to make the purchase for that year," says Stier.

- The teamís marketing to government customers during the fiscal year-end period focuses on helping them meet their deadline.

They typically emphasize this message in:
o House emails
o Website display ads
o Paid search
o Catalogs

Sample messages include:
o "[Name] Meet your fiscal year-end deadlines with GSA-approved furniture from NBF"
o "Build a complete office fast with quick shipping from"
o "Weíre open late to fulfill your last-minute deadlines"

- In addition to highlighting deadline awareness in their marketing, the team makes sure they have enough resources and staff on hand to handle the boost in orders from July through September without any hiccups.

Preference #3. Familiarity with agency challenges

Government agencies have a unique set of concerns, and Stierís team strives to address them through multiple means. Here are three ways they do it:

- Customer service

The sales process for government accounts is unlike traditional sales. Stierís team uses specialized customer service reps, and their reps have an average of nine years experience, he says. The reps have to understand the RFP and quote process alongside other nuances in dealing with government accounts.

Also, reps have to be familiar with National Business Furnitureís product line. Agencies often need a mix of on- and off-schedule products to meet budget requirements. The reps must be able to make suggestions for GSA-approved products that are comparable to open market products that customers want, and vice versa.

- Product categorization and labeling

The team strives to make GSA-approved products easy to find. GSA-approved products are given logos in the teamís catalogs and website. The website also has GSA-approved product category pages.

The team also recently launched a website account system that customizes the experience for registered users. Government agency customers who are logged in can opt to view only GSA-approved products while browsing.

- Segmented messaging

The team customizes its marketing to coincide with government agenciesí needs and schedules. Examples include:
o Paid search ads and landing pages related to keywords such as "GSA" and "government furniture"
o Segmented emails emphasizing key calendar events, such as the fiscal year-end
o Website display ads that emphasize deadlines and fast shipping
o Stickers on catalogs that emphasize "GSA-approved products inside"

Preference #4. Fast shipping

Stierís government customers require fast shipping, even more so than his private sector customers, toward the end of the fiscal year. He believes this preference stems from agenciesí accounting requirements.

"They want to have the order and the receipt of that order within the fiscal quarter, just so that everything is clean and thereís nothing left over from the previous fiscal quarter," he says.

To accommodate, the team stocks thousands of products -- many of them GSA approved -- ready for same day delivery.

Preference #5. Carefully crafted promotions

Everyone likes a sale -- even the government. However, Stierís team has to be careful when discounting GSA-approved products.

For example, the team cannot sell a GSA-approved chair to an agency for $200 and sell it to a business for $180. Doing so would risk losing the teamís status as a GSA-approved vendor.

This rule prevents the team from using coupon codes that can be applied to any product. Instead, they limit the codes to only be used for non-GSA-approved products.

The team does, however, offer sales on GSA-approved products without risking a violation. The key is to offer the discounted price to all customers. This allows the team to have "sale" sections of its website specifically for GSA customers.

"As long as everyone can buy it at the same price, youíre fine," Stier says.

Useful links related to this article

Creative Samples from National Business Furnitureís B2G marketing strategy

Members Library -- How to Market to the Government: Top 5 Challenges & Solutions

US Department of Commerce: Bureau of Economic Analysis: Gross Domestic Product Fourth Quarter 2009 (Third Estimate)

GSA: Getting on Schedule

GSA Schedules

GSA Advantage: Online electronic shopping and ordering system for government agencies

National Business Furniture

See Also:

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