How to Sell US Federal Customers (& Investors) On Your Company?

Sarah Djamshidi, President and Managing Partner of SpeedShift Ventures asked me to be part of a panel at the AFCEA Small Business Innovation Summit. The title of the session is “Communicating Value” and it is described as a session where the audience will “Gain valuable insight and tips for crafting a persuasive elevator pitch to help you win more business. Venture capitalists and government decision-makers explain what sells them on a small businesses solution.” My role on the panel is to explain to the audience the entrepreneur’s perspective—net/net: What’s worked for me in the past. 

Here are my prep notes for the session:

The AFCEA organization primarily supports US federal government organizations and many of AFCEA’s Small Business members are professional services firms and product startups.  I’ll use the Solution Selling framework to outline an approach for selling to the Public Sector, but recognize, the context is a bit different than selling to the Private Sector.   The framework of Solution Selling — Pain, Power, Vision, Value and Control (PPVVC) works in both verticals but how it is approached is different.

I find that walking through all the elements of Solution Selling can be a good way to prepare a persuasive elevator pitch for any potential new customer (or investor).

Pain

In the Private Sector, pain is usually expressed as a specific, measurable dollar amount (example: employee turnover is costing the company $1M a year) with corresponding symptoms (15% turnover versus a goal of 4%).  In the Public Sector, the identification of “Pain” can be the same or even more drastic like loss of life—in any case, it may not be in dollars.   The key is that you need to understand your customer’s pain and have empathy for their situation and be credible in a conversation about the subject.

Power

You can’t sell something to someone who doesn’t have the authority/ability/money to buy. Talking to anyone else other than the decision maker is merely a sponsorship conversation to diagnose the pain and prepare to have a discussion with the decision maker.  However, what is challenging is that VIPs in the Public Sector are rarely the real decision makers.  The real decision-makers are the people who have the legal authority to spend our tax dollars, negotiate, purchase, and sign their name on the government’s behalf on the contract.  It’s very important for you to identify the real decision-makers and to spend the time to build strong relationships so that they feel comfortable doing business with your company.

Go to conferences, vendor outreach sessions, one-on-one meetings, every place that sponsors and decision-makers have the chance to meet, shake hands with and look eye-to-eye with the people who buy what you sell. These targeted people may have various titles such as contracting officer or specialist, technical specialist or program manager.

Value

The decision makers not only need to understand how your service/product performs within their organization but believe that the capabilities presented will solve their pain for less investment than the pain costs. (example: we will lower your turnover to 5% thus saving the organization $1M at an investment of only $50k).  As stated before, in the Private Sector this is usually Return on Investment (ROI), however in the Public Sector this could be saving lives or even being reelected.    The point is that you need to be able to articulate your value to the audience.

Vision

Sponsors and decision makers need to gain an understanding of how your solution will work within their organization to solve their “Pain”.  When positioning your company be efficient, but don’t talk fast.  Know your audience and stay natural, yet confident — not scripted.  Be able to articulate the problems you solve and the solution in your audience’s context, as well as, your competitive advantage. Use facts that resonate, talk about the team and most importantly talk about references.  Don’t get too technical, never get defensive and don’t lie–EVER! (if you ever heard the phrase ‘fake it till you make it, wipe it from your memory’).

For an example of positioning refer to this Shark Tank example.

For something more fun (yet less realistic) but related to Public Sector check out Tony Stark selling to the DOD here…

Sit down and write out your company’s elevator pitch in the most efficient wording possible: The problem (Pain), your solution, your target market, your competition and competitive advantage.  Describe your team, your business model, your traction (references) and if appropriate your financials.   Then practice this elevator pitch over and over and over until you can pivot it confidently to any decision maker, prime-contractor, sponsor or investor in under 60 seconds. …BUT Here is the thing to keep in mind–The real world of sales doesn’t work like SharkTank.   If you started yammering about your solution to someone ‘on an elevator’ without context it will make them get off at the next floor.  Remember J. Gitomer’s saying “People don’t like to be sold to but they love to buy” “Rather than selling, take a look at buying. Would you rather know how to sell, or would you rather know why people buy?”–This is the Art of sales–you have to be comfortable, confident and casual in your approach to people.  Customers are not objects… They are people.  Here is an example of a casual approach that worked on me (an investor in http://www.gel-e.co):

• Customer (investor): “So why are you at this meeting?”
• Entrepreneur: “We’ve got a unique product that stops bleeding fast.”
• Customer (investor): “Stops bleeding? Really?”
• Entrepreneur: “Yup. Using safe, naturally occurring biomaterials too.  We design wound treatments for a variety of applications and patients, spanning from surgical gels to bandages for patients on blood-thinners experiencing routine nuisance bleeds.”
• Customer (investor): “That’s an interesting idea, my son deals with bloody noses all the time.  Will it help with this issue?”
• Entrepreneur: “Yes, and much more! Hey, would you like to see it in action?”

“Tell me, and I will forget. Show me, and I may remember. Involve me, and I will understand.”–Confucius

Control

This is where things get tricky regarding the process of selling to the Public Sector versus the Private Sector.   In the Private Sector, you would ensure your customer has a clear, written and agreed upon process about how to buy from your company at each step.  You would be presenting the buyer with a draft evaluation plan for their approval including a written checklist including what is going to happen in the process, when it will happen and who is responsible for deliverables.  In the Public Sector, there is a defined process set forth in laws and called out in the Federal Acquisition Regulation (FAR)—DFAR for the Department of Defense.   This set of laws both make the sales process longer and costlier but also drive you to ‘control’ the process in a different way.

Let’s review some of these differences beyond what was mentioned previously:

• Government customers use purchasing vehicles–this vehicle could be as simple as a government credit card, it could be as complicated as a 200-page response to a Request for Proposal (RFP) or a pre-approved contract called a GSA Schedule. Certain types of contracts even limit the amount of profit you can earn and the amounts and types of costs you may recover.  You must know what purchasing vehicles your customer’s agency would use to buy your services and products and how to get on those contracts or partner with a firm that is already on them or better positioned to win a future contract.   Leverage the tools that the SBA, the Office of Small Business Utilization (OSBU) and the GSA provide to identify potential teaming partners (Subcontracting Directory and eLibrary sites to identify potential teaming and subcontracting partners) and stay on top of FedBizOpps.gov. Recently Other Transaction Authority (OTA) contracts seem to be the hip new thing in some acquisition circles.  If your customer supports OTA contracts you need to understand how to best leverage the vehicle because it could minimize the length of the sales process dramatically.
• Government contracting authorities must require certain certifications and compliance such as FedRAMP and NIST 800-171. You must know what is required and have a plan to fulfill these compliance hurdles—you will be asked if you comply and if you do not have a plan you will not be taken seriously.
• The Federal Government needs to spend their current fiscal year budget by the end of September. You need to understand both the timing of the contracts as well as the US Federal budget process and the opportunities and risks associated with the process (example: continuing resolutions).  The process is much slower than that of the Private Sector and you need to be able to financially make it thru the process.
• The Federal Government has small business set aside goals. You need to understand what these are for your customer’s agency and if they are going to help or hinder your success.

Sales is 49% art and 51% process (“Control”) …   The 49% art is defined in how good you are at articulating value plus how well your team can deliver value.  The 51% process is how you project manage all the nuances of the sale and make more money than you invest in the process.

A great elevator pitch can only come from a person that understands, and has empathy for, the customer’s Pain; can articulate a confident Vision with Value to ALL decision makers; understands the procurement landscape enough to project manage the sales process (Control).