Most contractors are starting to feel the pain of the government slowdown – whether it’s due to changing economic conditions, sequestration or the doom of the government’s fiscal cliff. And, as in any period of delayed or shrinking revenue, companies immediately cut marketing budgets. Sometimes that’s an absolute necessity. But all too often, such decisions are not strategic and are purely reactive. A thoughtful and strategic approach to marketing will actually give you an opportunity to gain on your competitors and conserve costs.
Because the government market sector is so complex, companies are burdened with additional costs – for compliance, capture, bid and proposal, training, etc. – that aren’t necessarily seen in a commercial market. And that makes the decision of what to cut even harder. But now, when budgets are shrinking, is the perfect time to revisit the purpose and return on investment of your marketing efforts.
Consider that marketing is not just about getting leads. Marketing is also about:
- Maintaining relationships with existing customers
- Maintaining a relationship with prospects—especially since the government sales cycle keeps lengthening
- Creating a perception of your true value and credibility so existing and future customers believe in the value you deliver
Research shows that marketing in a down economy is even more important. A well-known McGraw-Hill Research study looked at 600 companies from 1980 to 1985 and found that businesses that chose to maintain or raise their level of advertising expenditures during the 1981-1982 recession had significantly higher sales after the economy recovered. Specifically, companies that advertised aggressively during the recession had sales 256% higher than those that did not continue to advertise. Further research conducted after the 1989-1991 recession showed that companies increasing their ad expenditures showed a 15-70% increase in sales, while companies decreasing their expenditures showed a 26-64% drop in sales.
Market with Purpose
In the highly competitive government contracting environment, marketing needs to be purposefully aligned with business development and sales. Can you answer “yes” to all of these questions?
- Is your marketing department a fully aligned partner in the business development process?
- Is marketing specifically positioning your company for credibility in strategic accounts?
- Does your marketing establish the substance of your qualifications and showcase your past performance?
- Does your marketing advance and test the themes you’ll use to win the “stepping stone” and major opportunities in your business development roadmap?
- Does your marketing ghost the weaknesses of your competitors?
If not, it’s time to make marketing the front door and foundation for your business development, capture and proposal efforts. Imagine what would happen if the customer reading your proposal already knows, understands and believes the win themes it contains. That makes your marketing ROI much easier to calculate.
Focus on Your Message
Marketing has gained a reputation as an expensive nice-to-do with iffy ROI. That’s because too many companies spend their money on lots of expensive activity that cannot be directly linked to sales success. Consider focusing on delivering a clearly differentiated message that relates to the current fiscal climate and describe how your product or service can benefit your prospect now. Then, carry this message all the way through your marketing materials and into the technical and management volumes of your proposals. If your communications are well targeted, this should be far less expensive as well as more effective than many traditional marketing activities.
At ENC Strategy, we believe in linking strategic communications to sales success using these two simple but essential guidelines:
- Herd the cats—with pinpoint messaging. Selling to the public sector sometimes feels like herding cats. With stakeholders ranging from contracting officers to program managers to political appointees, it often feels like a Herculean task to get the different decision makers and influencers aligned in in favor of your company. But with a solid messaging platform in place, you CAN communicate your story consistently to each stakeholder group, especially within a specific agency. Begin by creating a list of all your stakeholders, and then fill in the frame of reference for why they should be talking with you, the key benefit you provide them and the proof points that support your assertions. Make sure you have a well-written and believable synopsis that explains why each stakeholder or target vertical should choose your company.
- Stay on target. Provide the same compelling explanation of your products, services, expertise or approach in every single customer contact—whether that’s in person, in the media or in promotions. Does everybody in your organization use the same words to describe what your solution offers and why it’s the best choice for a specific agency or stakeholder? Are those same words used conspicuously throughout your emails, presentations and proposals?
Even when government customers are buying on a best-price/technically acceptable basis, there is still a benefit to being the company that gives your customer a greater sense of trust. Trust is built on relationships. Relationships are built on familiarity. Your people may have relationships with champions at target agencies. But what does everyone else on the evaluation committee know about you? Effective marketing can make sure all your stakeholders are familiar with your company too.
If your sales people only have an hour with a prospect, particularly a high-up, hard-to-reach executive, how much time do you really want to spend explaining who you are, what you do and why you belong in the room? How much would it be worth to cut the time it takes you to do that from 20 minutes to five minutes—freeing up more time for listening to the customer and proposing solutions to their challenges?
That’s priceless. And it’s exactly what marketing can and should be doing for you.
Photo courtesy of Flickr user Buddawiggi through Creative Commons.