What is B2G Marketing?

As we note in "What is B2B Marketing ?” selling to an organization such as a business or government agency presents the marketer with challenges which are distinct from the consumer sale; however, marketing to a government agency (Business-to-Government, or B2G marketing) is also different than selling to a business customer.

 

Unlike a government agency, a business is tasked with turning a profit for the benefit of its shareholders. Private companies may have more flexibility in how they prioritize profit with other objectives, but in the end, making money is their top priority. Government agencies have fiscal constraints and requirements also, of course, but actually making money is never at the top of their priority list. They exist because they are tasked by the people they serve to achieve a specific mission. These objectives, and how they are to be met, are set out in complicated combinations of laws, regulations, policies and operating directives and are influenced heavily by their political environment, which shifts constantly.

 

These dynamics are just as true at the local level as they are at the state, federal and international levels and the business that sells to these agencies must understand the unique political, legal/procedural and practical factors at play around each government department they serve. They must also understand the “business ecosystem” of companies which commonly partner to win large government contracts in any specific government market. This article is a brief look at how the “Six Ps + Branding” marketing mix is affected by the B2G uniqueness. All these themes will be explored in greater depth in this blog and the B2B Expert’s Forum as well, so sign up for them, contribute your experience and together we’ll all be smarter!

Read on to see how Branding and the 6 Ps apply to B2G Marketing.

Branding: As we pointed out in our discussion of B2B branding it is people, not robots, that evaluate proposals throughout the procurement process and when the decision makers sit down to review multiple proposals that meet the RFP’s requirements, brand and reputation matter quite a bit. Although many individual government procurements are designed to allow only one proposal through the evaluation process, in the end, even this process is less likely to be successfully challenged if the winner’s brand name is strong with oversight personnel. And because many of the decision makers oversee so many programs, and the vendors provide so many disparate products and services, corporate branding as opposed to product or division-level branding is often the most cost effective.

Product (or Service): Many government procurements spell out product and service standards to amazing levels of detail in order to comply with a variety of statutory and procedural requirements ranging from national security to political objectives. The required customization coupled with the large cost of sale of the procurement process makes creating products and services for government agencies very expensive, however, the contracts are often for larger volumes over longer periods of time and so the economics work out to the vendor’s favor in the long run when all these factors are accounted for appropriately.

People (target market): A solid understanding of your target market is so crucial to B2G and B2B success that we break it out of the traditional “four Ps” of marketing. Quite often, the target market in the government market is as narrow as a single component within a single department. This may seem “small” until you realize that for some large agencies at the federal and state levels, even one program in one component in one department can be budgeted in the billions. Because the target market in terms of actual decision makers is often small, it becomes important that you know the contracting officers and review and oversight personnel individually. These should be personal relationships that far exceed the intimacy of knowledge over a typical target market analysis. From these relationships, which are difficult to establish and maintain around the myriad procedural and logistical barriers erected to instill fairness, a true understanding of the relevant government target market can be established.

Another unique aspect of the government sale, and an added complication, is that many large procurements are won by multiple companies acting in partnership to assemble the specific solution for each contract. One company acts as “prime” contractor, holding the master contract and subcontracting out pieces to other firms. Thus, the “target market” for most government contractors include these prime contractors, who broker which companies are included in the largest proposals. To the extent a contractor has good brand recognition and experience with the government end customer, this can help them earn invitations to larger bids through the primes, but does not necessarily secure them a place at the table without good relationships with the primes directly.

Positioning: Price is such an important part of the marketing mix that we give it its own “P”. Positioning is just as important for government buyers as it is in any form of marketing, but in the government market it plays a crucial role in helping you communicate clearly to cut through the massive amounts of data contracting officers and program managers must navigate during each procurement. Clear positioning supports your proposal before you’ve decided to bid because it helps your prospective customers understand what your company’s strengths are and when to include you from step one of the process, which is often informal and invitation-only.

Pricing: Most government procurements are made subject to “schedules” on which qualified government contractors have made their government price lists available in advance of submitting proposals on any specific contract. In addition to pre-publishing their prices in publicly available schedules, a government contractor must make its lowest prices available on this list. This provides the contractor relatively little price flexibility when preparing specific bids and means that profitability must be found in other ways than a high unit price.

Promotion: Promotion in B2G marketing is just like promotion in B2B or B2C marketing in that your messages must appear when decision makers and influencers are seeking information about your product or service. In the government market the ultimate information vehicle is the proposal itself and it’s vocabulary, tone and specific references can be critical factors in communicating value. There are certainly publications, trade shows and events which can be leveraged to let your target market know about your company and offerings as well, and like the business market they are very specific to the department and/or product area. In addition to the specificity of message and placement needed to make sure your communications are successful, while the audience of “buyers” is often relatively small, the audience of “influencers” on any particular procurement can be quite large and diverse, including political figures and staffs who have oversight responsibility. Their information needs are equally diverse which makes reaching them each with the right message sometimes very challenging. These unique challenges make public affairs and public relations critical pieces of the government marketing function.

Place (Sales & Distribution): As in large B2B sales, a skilled and knowledgeable direct sales force is critical to successful government sales. Government sales people are most successful when they are perceived by their government clients as substantive experts and information resources as opposed to “sales” people. Good government sales teams know their companies’ products and services inside and out, know their clients procurement processes and mission requirements equally thoroughly and are trusted by the client. The marketing department helps these highly skilled sales teams by providing good promotional and branding “air cover” so that the sales people can focus on the details of specific procurements.

What about the nuances of different government markets such as local, state, federal and international? Each of these markets is more like the “B2G” market discussed here than either the B2B or B2C markets, but they also differ in meaningful ways. We will explore these some of the relevant nuances of these markets in the B2B Expert’s Forum.

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