Winning business in government: 2. There’s no selling to government

There’s a simple reason why you can’t sell to government: you can’t go through a process of ‘closing’ a deal without ending up in a tender process, or at very least a process of comparing competing quotes.
Once you’re responding to a tender you’re locked into a bidding process which means using bidding techniques, not sales techniques. Of course you can use sales techniques during a bid if you want, but
you’re likely to be giving your buyer the hump and making it harder from them to buy from you.

The real problem with using sales techniques is that government doesn’t buy anything. I know that doesn’t make sense, but hear me out. Government tenders for things, so prior to the tender if they’re
meeting with you they’re focused on trying to gather the information they need to publish a good tender. If you’re already in the tender process then they’re focused on running a successful tender, which means they’re focused on process, audit trails, scoring and negotiating. Sure, at the end of the process they’ll sign a deal, but they’re concerned with the outcome delivered by the tendering process
and the rules of the tendering process trumps everything else. So whilst most people might think of it as buying, they’re rigidly tendering according to the law and that’s what drives any transaction.

Right now, all the sales professionals who’ve been winning business in government are jumping up and down and saying “this is rubbish, I’ve been successfully selling into government for years and they’ve been buying our services for years”. I’m sorry, but you’re wrong, you’ve been successfully marketing and then bidding into government for years, your attempts at selling into government have been a waste of time and your customers have been thinking that you’re the human equivalent of spam.

Apart from the fact that government tenders rather than buys, it doesn’t help that most public servants are allergic to the sales process, so when they hear a sales pitch all they think is: “she’s lying, she’s lying, she’s lying”. They grit their teeth and try and get through the meeting, because they need information, but they’d be happier if they could spend the time burying forks into their legs.

The only approach that works in government is to build advocacy for your product within the buying organisation.

What does the Public Services (Social Value) Bill mean for suppliers?

The Public Services (Social Value) Bill was passed into law earlier this month and will bring a new regime into force for suppliers looking to win business from government. The bill requires buyers to evaluate contracts on the basis of their social, economic and environmental impact and then to monitor any commitments that suppliers make in those areas.

The bill requires buyers to set up an evaluation model that will effect all bidders in a procurement. It remains to be seen how much weight buyers will give to social values, but there are a raft of pressures groups ready to challenge those who look like they’re only paying lip service to the new law.

It will also be interesting to see how suppliers respond, are they going to opt to simply beef up their CSR programmes or will they look to take a genuinely proactive approach? What if you’re a bank that received a public bail-out, how on earth are you going to persuade the public sector that you’re a force for social good?

Here’s a list of three areas that suppliers could look at once the bill comes into force later in the year:

1. Job creation – suppliers who can demonstrate that they are putting jobs into the economy will have an advantage over suppliers who opt to outsource work abroad. Those who outsource work abroad will have to make a strong case that the reduced costs to the buyer will have a positive economic and social impact.

2. Supply chain management – where there is an opportunity for suppliers to use sub-contractors in their work, they will want to demonstrate that they are recruiting locally, and that sub-contractors are being paid on the same terms as the prime contractor. If sub-contracting opportunities can be passed on to a social enterprises then even better.

3. Community initiatives – Building developers are used to being asked to make contributions to the community infrastructure when they build new buildings. Other companies are going to be expected to do the same. Consultancies may want to volunteer at local schools, and IT firms may provide software or services that benefit a local charity.

Why GPS needs mandates

The new GPS non-permanent staff PQQ is expected in May. We’ll be publishing an insight report prior to publication to help bidders really know what’s happening in Government. As part of our work we’ve found some telling insights, for example, spend through the GPS framework accounted for less than 20% of the £160m spent on agency staff across Central Government last year. We’ve also identified 19 different frameworks for agency staff across Central Government, giving a clear indication of how fractured Central Government contracting is. Clearly John Collington and David Shields have work to do in every category before they have got real control.

If you want to know more about our upcoming report get in touch.

MSTAR gathers pace

ESPO’s MSTAR framework continues to win business at an almost relentless pace, although there are no public records of business placed through the MSTAR framework, we’re continuing to see evidence of Councils moving their business onto the framework, with a continued emphasis on Vendor Neutral arrangements. Councils without contracts are moving across to MSTAR in a bid to make direct savings on their budgets. We’ve also seen Councils simply closing out their existing contracts with suppliers and moving over to MSTAR with the same supplier, basically trading improved prices for extended terms. For more on local government agency staff see here…

Winning business in government: 1. Forget it

If you’re used to winning contracts in a corporate environment, but you’ve never sold to government, you might be thinking along these lines:

“The UK government spends around £22.6bn on goods and services. I must be a fool if I can’t find some business from a sector that is worth that much.”

There is some merit to that thought, but it bears closer inspection.If you’re a small or medium business, the market size is probably less than 10% of that work, so in one swoop, we’re talking about £2.26bn.
By the way, that definition of small and medium businesses covers businesses with less than 250 employees, so we’re not talking about bootstrapped start-ups.

If you’re a micro business (less than 5 employees), your market size will shrink by the same factor again, that’s still £226m, but if you think about how many micro businesses are striving for that business across all of government, well you’d better not plan on being a millionaire tomorrow.

Then there’s the fact that there isn’t really a single ‘government market’, its made up of five smaller markets, there’s central government, local government, health, education and justice to consider. They don’t really buy the same things and each area of government will expect you to have understood the challenges they face in their particular sector.

If you manage to build a specialisation in local government, don’t assume you will have any credit in the health market, to the protagonists in each, they are as different from each other as catering and legal services.

So, with a specialisation in one sector, e.g. local government, that means you’ve got £45m distributed between all the micro businesses in that sector.

Let’s add another problem, every part of government is trying to save huge amounts of money. So it is also a shrinking market.

And we haven’t even got to the point where you discover how painful it is to tender for business.

So, unless you really need to sell to government, I would forget it. That doesn’t mean don’t do it, it means only do it if you’ve got a high pain threshold.

Jamie Horton, MD of Comensura writes in the Guardian

Some interesting figures on the unintended consequences of cut-backs in temp staffing by Councils.

http://www.guardian.co.uk/public-leaders-network/blog/2012/mar/07/council-job-cuts-hit-women-and-young?newsfeed=true

When to use SMEs, an article for C4C

We’ve been featured on Campaign for Change, a UK blog focussed on changing the way Government does business, with a focus on IT projects (it has been set up by two ex-writers from Computer Weekly).

http://ukcampaign4change.com/2012/03/07/smes-when-to-choose-them-and-when-not/

In the post we argue that government needs greater insight into when to use SMEs rather than ‘hitting and hoping’ when it comes to appointing SME suppliers.

Recruiter uses Govmark research for local government analysis

Recruiter have used our research as the basis for an analysis piece on local government. The full piece can be found here:

http://www.recruiter.co.uk/analysis/smaller-agencies-to-bear-brunt-of-cuts/1012877.article

New research by Govmark, a company that provides research to government suppliers, found that a number of converging trends are having a major impact on agencies that supply into this £1.1bn a year market for agency staff.

If you’d like to know more about the market, get in touch with us.

Govmark featured on Spend Matters

Govmark have been featured on Peter Smith’s influential Spend Matters procurement blog.

“Govmark get their data through a pretty painstaking and painful process of digging through a whole host of publically available information – knowing where to look is key, but there’s still a lot of sheer legwork involved too.

They recently published a report on contracts for temporary staff in UK local Government. It contains some real gems – including the headline which says,

“There are 190 local authorities spending £325m p.a. without agency staff contracts”. Which means they’re probably in breach of EU regulations apart from anything else.”

You can read more here: http://spendmatters.co.uk/ticon/

Capita win Army recruitment deal

Despite the concerns of Esperito Santo’s David Brockton (see earlier post), Capita have won the Army’s recruitment contract renewal, worth an estimated £500m over ten years. Capita’s shares are up 2.7% on the news, but Brockton is maintaining his ‘sell’ rating, as he fears greater competition and tightening margins.