Flexible distributors fare well in the battle for government accounts.
If all the niche markets available to distributors, the government market may cause the most apprehension. Clients are demanding. Competition is fierce. And because most jobs require bids, there's no guarantee distributors will keep the business they obtain. The challenges may appear daunting, but distributors who target this niche say sincere efforts are rewarded with substantial profits.
There's no denying that government agencies demand a great deal of document management support. Offices responsible for documenting information and issuing permits can't operate without registration forms, renewal notices, envelopes, checks, invoices and decals. In addition, state, local and federal agencies often issue contracts for multiple orders with quantities in the millions.
What's the key to winning government contracts time and again? FORM spoke with three distributors who are using creativity, patience and flexibility to thrive in the government niche. They share the following tips for penetrating the market:
- Stay on the cutting edge. Like their private-industry counterparts, government agencies are adopting new technologies rapidly. Distributors who can't keep up usually miss out on profitable jobs, says Paul Schweitzer, CFC, president of Complete Source Inc., a distributorship in Grand Rapids, Mich. Schweitzer says many government agencies expect the convenience of technologies such as FTP and e-commerce. "If you're not [offering e-commerce] now, you will be in trouble," Schweitzer says. "If you're just starting, you better be moving as fast as you can to catch up." Schweitzer admits it can be difficult for small distributors to offer high-tech solutions. In order to offer e-commerce through its Web site, Complete Source partnered with a technology provider.
Other technologies such as digital printing are also profitable if your competitors are lagging behind. "You start to get a feel for who your competitors are and how capable and flexible they are," says Tom Thompson, president of Associated Business Forms Inc., a distributorship in Wichita, Kan. "Sometimes you're bidding against local printers on products you have a better source for." Thompson recently furnished a government agency with digitally printed truck decals that were consecutively numbered. He says he won the job easily because his price was lower than what local printers using 4-color process printing could offer.
- Read quote requests carefully. Distributors who ignore the wording in government bid requests are missing lucrative sales, Schweitzer says. "There are a lot of rules and regulations that come with bids," he says. "People who overlook them and don't put the time and effort into reading closely, never learn how to respond." If the request is difficult to understand, Schweitzer suggests contacting the client directly for interpretation or clarification. "A lot of [distributors] see specifications and say, 'That seems really strange' or, 'No, they wouldn't want that,' as opposed to thinking, 'Well, maybe they do want that,'" he says.
- Strive for perfection. Because she sells to municipal offices in several different cities, Mary Ann Kochalko says mistakes are a luxury she can't afford. "Municipalities have a loyalty, if not an obligation, to [buy] locally," says Kochalko, executive account manager at Youngstown, Ohio, distributorship GBS Printed Products & Systems. "As soon as you make an error, there's somebody local waiting for the opportunity to [capitalize] on your mistake."
- Market your flexibility. Thompson recently asked one of his government clients why his distributorship continues to receive her business. "Her feeling was we were as capable as any direct or local printer, [and] more flexible in a lot of cases," he says. "We have more sources and [many] different ways to approach a solution." Thompson recently redesigned a government agency's renewal notice. Although the original form featured a proprietary design created by a large direct-selling manufacturer, Thompson convinced the client to switch by providing a form that was simpler to fill out and more economical to print.
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Popular Applications
Fold-and-seal Laser Forms
Checks
Utility Bills
Delinquency/Renewal Notices
Tax Forms
Accounting Software Packages
Information Packets
Vehicle Decals
Mailers
E-forms
Plastic Cards
Traffic Tickets
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- Expect demanding clients. "Government clients are more demanding because they often have more levels of approval to go through, and their deadlines and requirements are very visible," Schweitzer says. "Also, the public and the media often seem to be looking to criticize, so any potential errors are picked up quickly." The Florida presidential ballot controversy is just one example of Schweitzer's point. "[Details about those ballots] will be available through the Freedom of Information Act, and anybody can pore over them to try and figure out who messed up," he says. "That can happen with many [government documents]. If you run checks for a business and they're a day late, only the client knows about it. But if the government misses [its deadline], everybody knows about it."
- Venture outside of purchasing. If you don't go out and "shake the bushes," you could miss a lot of valuable orders from government clients, Thompson says. Associated Business Forms has received orders for ad specialties and tax forms because Thompson visited departments other than purchasing. "The more you get involved, the more departments you talk to," he says. "You find out there are things [some departments] buy that purchasing never sees."
- Work within the system. When working with smaller government agencies, Kochalko offers suggestions, but refrains from making too many waves. "Even if you feel you know better sometimes, you can't push," she says. "In some of the other [vertical markets] I've worked in, it seems like they're looking for more direction. But you don't find that in the municipalities. I think [it's] because they're so closely related to other areas of city government. Nobody wants to shake things up."
- Submit multiple bids. If you have a better idea for an application than the one requested, try submitting a bid that meets the agency's specifications, then a separate bid with an alternative suggestion. "We've found that if you make changes and don't bid what the [agency asks] for, then they're liable to just disregard it," Schweitzer says.
- Earn clients' trust. Once you win the bid and start working on the job, it's up to you to make sure everything runs smoothly. "Government clients need to know that you provide a dependable service," Kochalko says. "They're on a lot of deadlines, and they can't [tolerate jobs that are] late or printed incorrectly. They need to know that once they give you the business, that's the end."
- Choose manufacturers carefully. "If you're going to work with large orders for municipal, state and federal governments, you [must] have close working relationships with your manufacturing partners," Schweitzer says. "The accounts are very demanding, so your manufacturer has to be able to perform. If you don't have that, don't even enter the arena."
- Pay attention to time frames. When competing for government accounts, distributors have to be conscious of deadlines, Schweitzer says. He has seen government agencies ignore million-dollar bids that took weeks to prepare, simply because they weren't submitted on time. "Somebody might spend four weeks' worth of work and be 15 minutes late," he says. "Most of the time, they're not even considered."
- Don't overlook small orders. When selling to government agencies, distributors often focus on orders with the largest quantities. Kochalko sees this approach as shortsighted. "To penetrate [government accounts], you have to [offer] add-on items [such as] registration cards and delinquency notices," she says. "You have to let them know you want all the products you offer to integrate with each other. Sometimes being in on one end can carry you into another area within the same government service."
Stacey Hawkins is assistant managing editor of FORM Magazine. Email her your comments at shawkins@dmia.org.
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New to the Market?
Here are four things to consider when targeting the government niche:
1. You must register in order to receive bid notices. This process allows you to designate the products and services you specialize in. Register with your resident city and county first, then expand to neighboring cities and counties within your state. Many agencies give local businesses a 5 to 10 percent pricing advantage over out-of-state suppliers.
2. Most government work is up for public bid, and pricing is competitive. Manufacturers are more dominant at the state and federal levels. Some government agencies, however, require mandatory bid conferences for medium- and high-security applications. Distributors can represent out-of-state manufacturers and possibly qualify for pricing preferences.
3. Smart selling is rewarded. Use consultative selling to introduce new products, and you may be designated as an agency's sole vendor. Eventually,
the application will be submitted for public bid, but after 6 to 12 months as sole vendor, you'll have an advantage over the competition.
4. Minority-owned businesses may qualify for "set-aside" programs. If your business is minority-owned, you should register accordingly to receive special bid notices.
Source: Mike Messmer, vice president and general manager, Nova Vision Inc., Bowling Green, Ohio.
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