The Federal Sales Market
The Federal Market has its own unique sales cycle and requirements if you are going to successfully close business. The Federal acquisition model was developed back when new technology moved at a snail’s pace, and it took decades to design a new ship and the processes to fit that need. Today, technology changes on a daily basis, and the Federal government is doing their best to catch up. They are open to new ideas and technologies that the private sector already has and continues to develop. They have needs and requirements that are very similar to commercial enterprise customers, but with some unique differences. These differences are why a leader must correctly set, manage, and track the right level of expectations throughout their organization.
What are the five factors of setting realistic expectations and why does a company need to set and manage them?
The five factors include:
Time: The expectation of setting a timeframe for entering the Federal Market and understanding that a revenue stream for this market is usually between 18 to 24 months from when you begin your initial sales efforts. This is due to the nature of the Federal budget cycle and Federal customer buying cycle. Each plays a critical role in closing deals in the Federal Market.
Cost: The costs associated in entering the Federal Market depends upon the product a company is selling into the Federal Government. Some of the costs associated with successfully closing deals in the Federal Market include:
- Federal marketing development costs
- Federal product certification costs
- Federal reseller channel development costs
- Federal sales personnel costs
Culture: It is not uncommon to see companies try to enter the Federal Market with mediocre success. When everyone takes a step back, there are no glaring reasons why there was not success, as the cases generally are attributed to corporate culture. Companies that sell to this “non-traditional” customer need to be ready to weather the storms of the Federal Market. The COVID-19 response is a great example. The government takes years to spend $1Mil on a solution, but if there is a political will to make something happen, they can spend money like it is going out of style. A company needs to be ready for this and be able to nurture the conditions suitable for revenue growth in the Federal Market. There are certain aspects of selling to the Federal customer that a company may need to better understand to help their Federal practice grow.
Activities: The activities are directly aligned with the cost expectations. When building out a Federal practice, a company needs to truly understand all the activities and components of creating a successful Federal practice. Spending time with the wrong person, or with the right person at the wrong time, can waste a team’s efforts and kill any Federal Program.
Performance: In the end, this is all that really matters. How does the team perform with each of their responsibilities? While some leaders manage through cost controls, others manage by achievement. It is indeed a key metric, but each stake holder must meet the expectation in order to achieve success in building your Federal practice. Each business area must be prepared to meet their objectives and demonstrate the results needed to be successful. For example, marketing should be prepared to change the wording by Federalizing the product collateral, company website, and show booth messaging in a time frame to assist sales to achieve their revenue objectives.
What can the C-Level do to ensure expectations are real and relevant to their business?
Build a Federal Practice Business Plan
When building your Federal business plan, the C-Level personnel can define the five factors so you can manage and track each factor. Your Federal business plan can assist your team in testing your plan and adjusting it according to how effective and accurate it is when developed.
Ideally, each of the C-Level stakeholders would participate in developing the key characteristics of the Federal business plan. Using the five factors, each stakeholder would provide their insight and expectations for the execution of the plan.
Where do you go from here?
There are many tools for and variations of building a Federal business plan. The other route would be to reach out to Sanctum Federal for assistance in coaching and consulting to help you through the process of building your Federal business plan. We have decades of experience helping companies build and execute on their Federal practice.