Selling Services to Federal Agencies
From GOVSALESWIKI
Installment [ 4 ] Selling Services to Federal Agencies By Richard White
Our newsletters repeatedly emphasize the need to establish a relationship with end users when selling in the federal market. Relationship-based sales are paramount in selling services and integrated solutions and are also important in the sale of products. The degree to which a business must develop a relationship with the end user is based on how much education is required for the end user to understand what she is buying and the value of the product or service.
Services are somewhat more difficult to sell because they are inherently "invisible." A service company must convince the buyer that it (i) understands the buyer's problem, and (ii) has a practical solution to the problem. Selling services and integrated solutions usually requires lengthy, intense, and costly presale relationship building. Sales are generally closed using a multiple award schedule contract (usually a GSA Schedule) or a public bid. The public bid is usually posted in the form of a Request for Proposal (RFP). Responding to a RFP requires that bidders know how to write an extensive and lengthy proposal and then have the hand truck and rented van necessary to deliver the 1,000 - 100,000 pages of proposal material required to paper the government's procurement trail. For these very reasons, GSA Schedules have become the procurement method of choice. Federal buyers can buy both products and services through GSA Schedule contracts using a Request for Quote rather than the more costly and time consuming Request for Proposal process .
In the products market, end users often are familiar with the products they are buying. For example, consider the following:
- How often have you met with a Microsoft salesperson before purchasing Microsoft Office? Does Microsoft even have sales people?
- Our company bought Oracle software and Sun servers at the beginning of the Internet boom without meeting with salespeople. We learned about the products through word of mouth and Internet research. We had to seek out a reseller and beg them to service us. Fortunately, competition and open-source software have changed the order-taking environment that existed back then and even the mighty Microsoft may have to sell its more complex offerings. Maybe karma really exists.
Although products companies must build relationships, their investment in terms of time and money is not as great as in the services setting. Like in the services market, a products sale is closed with a multiple award schedule transaction (usually a GSA Schedule) or a public bid. The public bid is usually posted in the form of a Request for Quote (RFQ) but, in some instances, a RFP is used. A response to a RFQ usually does not require a voluminous proposal. Blind bids (those submitted when you don't know the customer) are easier to submit due to the lack of a large, costly proposal. Bids can be submitted on hope alone and then used as a mechanism to interact with the customer if you lose.
In conclusion, service companies need to limit their proposal writing efforts due to the associated high development costs and the negative effects (the draining of corporate morale) in the event that the contract is not won. In order to be successful, businesses should consider obtaining a GSA Schedule contract to close sales. In those cases in which you are forced to bid on a public procurement, it is critical that your company sell customers well ahead of the public bid so you will have a high probability of winning when you write your company's proposal.