Business owners understandably get frustrated and give up on the federal market when their efforts don’t bring results.
The best clues to your top federal prospects can be right in front of you! As you develop your federal business plan for the year ahead, your answers to these questions will help your team focus your precious bid and proposal resources on opportunities that are a strong fit for your company.
1. Who are your best customers today?
Past performance is extremely attractive to government buyers, and even more so to large prime contractors with whom your company might need to partner to reach those buyers.
You know who they are: they pay you on time, they come back for more, they refer their friends to you. It’s fine if your best customers are commercial rather than government; what matters most is the next question…
2. What are their common characteristics?
Take a look at the last couple of years of sales in those profitable lines of business, and the nature of your contracts with those clients. What patterns do you see with respect to:
- Location: Where is the decision-maker located? Where do you perform the service, or where do your orders most often ship to? Even if you could serve clients all over the United States, if you put dots on a map to represent contracts with today’s most profitable clients, where would they cluster?
- Contract Size: How much is the order or contract worth? How many people do you place, or how many units do they order? In other words, what size of contract or order is most typical, and could you easily do another 10 or 20 just like that?
- Duration: How long do your contracts run with those sweet spot clients? Is it a one-time order? One-year blanket purchase agreement? A two-year base with five one-year options
Successful companies often give top priority to opportunities that look a lot like work they do for their current clients.
3. What problems do you solve for them?
Rather than thinking about what your company makes or the service you perform, think about what your customers are actually buying!
Customers – including government purchasers – buy from vendors because they need products and services to solve their problems, deliver their missions, and meet their program and operational goals.
How would you answer the question, “What problems do you solve for your top customers?”
4. Which three federal departments or agencies have similar problems?
Are your clients in the health care industry? Financial services? Property management? Which federal agencies perform functions or have missions that are most similar to the clients who already love what you do, and are willing to be great references for you?
Look for examples of your past performance that can show a federal buyer how recently you’ve solved a problem very much like theirs for a client who looks a lot like them – in terms of size, scale, location, and mission.
Three federal agencies or programs is plenty to start with. Any more than that, and it’s easy to become overwhelmed with the effort it takes to develop the relationships that lead to opportunities.
5. Finally, consider a focus on your most profitable lines of business.
Why? After all the time and resources it’s going to take to win a federal contract you also want that revenue to grow your company. Otherwise, it could take years to generate the high sales volumes you need for low-margin products or services to show the results you want.
Once you have answers to those questions, consider letting go of the opportunities that are long shots. Your federal market research and business development will be much more efficient. Watch how your results change.
This article originally appeared in the WBENC President’s Report, July/August 2014