If you've ever sold to the government, you know the feeling of getting beat down by the procurement process. It can be especially frustrating when you're trying to increase the price of your product. But don't give up just yet! The government is like any other B2B organization in that they recognize value, even if the procurement department doesn't always see it. The key is to understand, quantify, and communicate the value of your product effectively to the right members of the buying center and the ultimate decision maker.
To truly understand the value of your product to a government agency, you must first understand the agency's mission and the motivations of each decision maker. This includes more than just the procurement department - administrators and elected officials also play a role in the decision making process. The mission of government agencies is most likely NOT saving taxpayer money. It is to provide services that benefit its constituents. By understanding the mission and what each player values most, you can better understand and position the customer value your product offers.
Once you understand your product's value, it's important to quantify the value in terms that resonate with the buying center. This means understanding the use case for your product and how it delivers value to constituents. By building a value model that accounts for different parameters, you can get a better idea of your product's total quantifiable value to the customer. This information can be invaluable when negotiating prices and communicating value to the buying center.
Finally, it's important to communicate your value effectively. This means developing custom messaging for each player in the buying center based on their motivations and what value elements will resonate most with them. Start these conversations early, well before the renewal deadline, to allow each player to influence the decision-making process. With the right value communication strategy, the buying center will become your advocate, and the procurement process can evolve towards a formality rather than a time-consuming and fearful sales effort.
In conclusion, selling to government agencies can be challenging, but understanding and communicating the value of your product effectively can make the process easier. Rather than solely focusing on price, sellers should focus on understanding the mission of the agency and the motivations of each player in the buying center. By quantifying the value of your product and building custom messaging for each player, you can defend your price during negotiations and make the procurement process a formality. Starting conversations early and consistently communicating your value can also increase your chances of success. Despite State government and Uncle Sam's reputation for price-buying behavior, there are ways to demonstrate and get paid for your value.
