02 December, 2014

Selling a new idea to government

I've been prompted to republish this by a now oft-repeated conversation with someone who had a great innovative and valuable idea for a government client, who's been completely frustrated by the procurement process. The simple reality is that selling to government agencies is different to selling to an individual or most companies; not only in the process, but in the time-frame. There are numerous cases where government procurement processes cost more than the achieved price/benefit differential, and that's not including the lost costs of delayed benefits realisation. 

You have to do this with every new idea, but it's especially difficult with government agencies:
  1. Persuade them that they have a problem or opportunity  that they want to solve;
  2. Persuade them that there are solutions (and recognise that they will look for alternatives);
  3. Persuade them that the payback from the possible solution(s) is worth the effort economically, managerially AND politically (the biggest challenge for novel ideas);
  4. Persuade them that your approach to the solution (not necessarily your particular product/service) is the right generic solution;
  5. Finally, win the RFI/RFP/tender/negotiation (they will seek alternatives to your great idea).
Each step is laborious and usually takes a very long time. Many new entrants to the government market hope that they can jump straight to step 5, ideally on a single-tenderer basis. It very rarely happens in countries my readers call home.  Government agencies would love to be more adventurous, but the media, the government's opposition, and your competitors are remorseless in their hunt for "unfair" deals (ie. ones that don't go through a  competitive bid process).

My advice: learn to live with it, but qualify all prospects ruthlessly on the cost/reward and likelihood of success at all stages, and price accordingly; ie. government business needs to be high customer value AND high supplier margin, or it's not worth it to both parties.

First published 17 November 2011

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