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 (Business-to-consumer, B2C); however, marketing to a
government agency (Business-to-Government, B2G) is also different than
selling to a business customer.
Unlike a government agency, a business is tasked with making a profit
for the benefit of its shareholders. Private companies may have more
flexibility in how they prioritize profit against other objectives, but
in the end, making money is their top priority. Government agencies
have fiscal constraints and requirements also, of course, but making
money is not why they exist. They exist to serve their constituents
and to achieve specific missions. These objectives, and how they are to
be met, are set out in a complicated combination of laws, regulations,
policies, and operating directives which are influenced heavily by
shifting political environments.
These dynamics are just as true at the local level as they are at the
state, federal and international levels and the businesses that sell 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 apply in the unique circumstances of
the B2G market.
B2G 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. By design, government procurements select winning proposals during the multi-stage evaluation process; sometimes through single awards and sometimes multiple awards. We contend, in the end, that this process is less likely to be successfully challenged if the winner(s)’ brand names are strong with the multitude of decision makers and influencers involved in the evaluation process. And because many of the decision makers oversee so many programs, and the contractors provide so many disparate products and services, corporate branding as opposed to product or division-level branding is often the most cost effective.
Just like in B2B markets, social media is becoming a disruptive force
in B2G marketing as well, with the added challenge of navigating more
stringent security requirements. Companies selling to government
entities must be careful in establishing employee social media policies
to accommodate these security issues, but more opportunities to use
social media channels in promoting your brand to government decision
makers are opening up and should be leveraged as appropriate to your
business and market segment.
B2G Product (or Service): Many government procurements
spell out their requirements to amazing levels of detail to comply with
a variety of regulatory and procedural requirements ranging from
national security to political objectives. The required customization,
coupled with the large cost of sale of the procurement process itself,
makes creating products and services for government agencies
expensive. However, the contracts are often for large volumes over
long periods of time and so the economics work out in your favor when
all these factors are accounted for appropriately.
B2G 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 P’s” of marketing. Quite often, the
target audience in the government market is as narrow as a single
component within a single department. This audience 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, in addition to the individual program, budget,
technical, and management personnel. Understanding their motivations,
their values and aspirations, their career goals, and where they seek
information is essential to communicating your brand to them.
Establishing personal relationships that far exceed the intimacy of
knowledge over a typical target market analysis is essential. From
these relationships, which can be difficult to establish and maintain
around the myriad of 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 the “lead prime” contractor with the
government while subcontracting out pieces to other companies. Thus,
the “target market” for most government contractors includes these
prime contractors, who broker which companies are included in the
largest proposals. To the extent that you as a government contractor
have strong brand recognition and experience with the government end
customer, this approach can help you earn invitations to larger bids
through the primes, but does not necessarily secure a place at the
table without good relationships with the primes directly.
B2G Positioning: Positioning 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 backed up by effective promotion
supports your proposal before you’ve even decided to bid because it
helps your prospective customers understand what your company’s
strengths are and when to include you in Step One of the process, which
is often informal and by invitation-only.
B2G Pricing: Many government procurements result in
“schedules” where qualified government contractors make their price
lists available as a means to make the buying process more
streamlined. In addition to publishing your prices in publically
available schedules, as a government contractor you must make your
lowest prices available on this list. This approach provides you with
relatively little price flexibility when preparing specific bids and
means that profitability must be found in ways other than a high unit
price. In addition to schedules, major government programs require
pricing strategies that are specific to the solution being offered, the
volume, scope, and contract term, and the competitive landscape.
Government regulations apply to pricing and should be studied carefully
for your product or service area before entering this market.
B2G 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 its 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, requiring specificity of message and
placement needed to make sure your communications are successful. Even
though 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 challenging. These
unique challenges make public affairs and public relations critical
pieces of the government marketing function. Planning communications
strategies around major procurements and programs enhance positioning
at these critical business times when any other form of communications
is limited.
B2G Place (Sales & Distribution): As in large B2B
sales, a skilled and knowledgeable direct sales force is critical to
your success in the government market. Government sales people are most
successful when they are perceived by their government clients as
substantive experts and information resources who add value to the
complex discussions that take place before procurement. Valued
government sales teams know their companies’ products and services
inside and out; know their clients procurement processes and mission
requirements thoroughly and are trusted by their customers. The
marketing department helps these highly skilled sales teams by
providing effective promotional and branding “air cover” so that the
sales people can focus on the details of specific procurements.
Comments