When it comes to selling products, there are different markets you can explore.
Most companies that offer products or services focus on one of three selling categories – B2C (consumers), B2B (businesses), or B2G (governments).
While the overall selling requirements of B2C and B2B markets are widely known, the B2G market has more nuances to understand. However, by following a few key strategies, selling to government agencies is much more achievable.
BREAKING DOWN THE DIFFERENT MARKET SEGMENT
Before crafting an effective sales pitch, it’s important to understand the distinct nuances of each market segment.
B2C (Business-to-Consumer)
B2C markets are designed for businesses that are selling their products or services directly to end users. This form of selling has a considerably broad reach since the target audience is individuals with varying needs and preferences. Typical sales formats for this type of market will include e-commerce platforms, social media marketing, and traditional brick-and-mortar retail stores.
B2B (Business-to-Business)
B2B selling is when a business prioritises selling its product or service to other businesses rather than individual users. The businesses being sold to will then use those products to improve on their own goods or services to their customer base, or create more operational efficiencies within their organisation.
B2G (Business-to-Government)
B2G markets aren’t as commonly referenced as B2C or B2B, but they have significant potential for businesses that know how to navigate their nuances. Companies commonly sell products like public safety software and construction services to these markets. These sectors include all government entities at the local, state, and federal levels. These organisations have very specific needs when sourcing products and services and typically adhere to a set of rigorous standards and well-defined processes.
WHAT MAKES B2G SELLING UNIQUE?
Selling products to government organisations requires a much more structured approach. This is because governments have strict procurement procedures in place that businesses need to adhere to in order to be considered for a contract. These processes typically involve products meeting very specific certification standards and can include a lengthy bidding process with other companies.
Government projects can take several months or even years to organise. Because of this, selling cycles are typically more than six months and projects and RFPs (Request for Proposals) can be quite sporadic. But when a business is chosen for a government sale, the payoff can be substantial – often with long-term contracts and consistent revenue streams.
NAVIGATING THE CHALLENGES OF SELLING B2G PRODUCTS AND SERVICES
Selling to government agencies requires businesses to be well-versed in addressing the specific challenges of this sector. Here are some of the frequent obstacles they might encounter:
Budget Constraints
Government budget cycles aren’t managed the same way as private companies. While governments operate on annual budgets like most businesses, these budgets are typically approved at least a year in advance. This means that companies need to plan ahead and anticipate future budget allocations to stay competitive.
One way to address this challenge is by building relationships with specific purchasing agents and staying in touch with them to get a sense of upcoming budget allocations and potential opportunities.
Government organisations are heavily regulated and very careful not to show favouritism toward one company over another, but it’s still possible to stay top-of-mind with relevant decision-makers who are helpful in guiding businesses through the procurement process.
Meeting Government Requirements
B2G markets are among the toughest to enter, as the requirements for selling products and services can be quite complex. The rigorous nature of these rules stems from the need for public accountability. Unlike many private entities, governmental agencies bear the duty of ensuring taxpayer money is spent wisely and maintaining transparency in their procurement choices.
This means that governments give more due diligence when deciding on public safety solutions and their evaluation process often requires more documentation and proof of capabilities before awarding a contract.
Ensuring that your business meets all necessary requirements to sell to the government can be time-consuming and costly. However, most governments offer transparent requirement lists and provide resources to help businesses get in alignment.
Start by researching the specific regulations and requirements of your target government agency and benchmark your business against those standards. This will allow you to identify any gaps and take the necessary steps to meet the requirements.
Sales
When strategising your sales approach and projecting revenues, remember that government sales typically involve a more extended process than other sectors.
Often, governmental agencies initiate their buying procedures with RFPs (Request for Proposal) or RFQs (Request for Quotation), which might require months of preparation and submission. After making the shortlist of potential vendors, your business might go through various evaluation stages and negotiations before sealing the deal with a contract.
It’s also not uncommon for government agencies to commit to contracts lasting two, three, or even five years, with opportunities for extensions. If you’re going after government contracts, make it a point to keep tabs on the end dates of existing agreements. This not only helps in strategic planning but also gives you a heads-up on potential bidding chances as contracts near their conclusion.
START SELLING TO B2G MARKETS MORE EFFECTIVELY
Creating a successful B2G sales strategy requires dedication and patience. However, the potential rewards make it worthwhile. By understanding the unique characteristics of B2G markets and implementing the right approaches, businesses can increase their chances of success.
Written by: Kevin Ruef
Kevin Ruef co-founded 10-8 Systems after consistently exceeding multiple companies’ sales records within the space. With more than a decade in sales, his experience ranges from B2B, B2G, and B2C. Since the company’s start in 2019, Kevin has been responsible for business development, strategic partnerships, and business operations.