Marketing to the Public Sector

15 December 2003—Public sector organisations, such as central and local government, defence, healthcare, education, and the judiciary, represent significant opportunities for suppliers of technology-based services and solutions. But marketing services and solutions to the public sector has its own specific challenges. Buyers are more rule-bound, cost-conscious, and risk-averse than their peers in the commercial sector.

ITSMA’s recent marketing roundtable, hosted by Vega Group in the United Kingdom, provided senior marketing executives with the opportunity to compare and contrast their experiences of this sector and share ideas on the strategies and tactics that prove most successful for reaching and engaging these buyers.

Roundtable participants highlighted three primary challenges:

1. The lack of reliable market intelligence and analysis upon which to plan marketing programmes
2. Difficulties in engaging with buyers and influencers before a tender process begins
3. Managing perceptions of value and risk around decisions

These challenges are discussed in the following sections.

Generating Reliable Market Intelligence
Roundtable participants agreed that ample data is available on public sector opportunities and trends. Sources such as Ovum Holway, Kabel, and EGI and government sources such as the Office of Government Commerce in the U.K. are widely used. Increasing freedom of public information has made the Web a great source of information for almost all subsectors within the public sector.

Developing meaningful intelligence from this data, however, requires a systematic approach to collecting, sharing, and reviewing it and combining the external information collected with proprietary intelligence gathered from existing clients and prospects, client-facing staff, partners, and independent experts. Preferably, according to roundtable participants, organisations should include someone with clear responsibility for owning this effort.

Several participants emphasised the value of account-based intelligence. Marketers can use opportunities such as consultation papers issued from public sector organisations to gain detailed knowledge about spending plans and priorities while demonstrating expertise in the form of feedback to the consultation process.

Engaging Buyers and Influencers Before the Tender Process Begins
Most suppliers understandably try to engage buyers in the public sector before the start of a tender process. Demonstrating expertise and building relationships allows providers to create a more favourable position at the start of the process—or perhaps even avoid the tender process altogether.

This is easier said than done, but one obvious approach is reaching out to public sector buyers within their own networks. Societies and networks are popular in the public sector as civil servants take the opportunity to find out about each other’s initiatives and concerns. Participating actively when possible in these types of events can be vital to getting into the flow of recommendations and referrals.

Thought leadership works well in the public sector. Identifying and explaining best practices in emerging initiatives is always popular, and even central government departments are willing to travel to other countries (at their own expense) to see how their peers have tackled a common issue.

As with private sector buyers, public sector buyers often rely on third parties to help them make selection and purchase decisions. In the public sector, ‘shoppers’ are independent procurement experts that help with the whole purchasing and tender process, and they are valued for their knowledge of suppliers and solutions as much as for their procurement expertise. By targeting these third parties with marketing programmes, suppliers can help ensure that these key influencers are in a position of knowledge and able to recommend them—and by so doing help to build the shoppers’ own credibility in the eyes of the client.

Managing Perceptions of Value and Risk
Marketers at the roundtable were at pains to point out that few public sector deals are ‘partnership’ or ‘value-based’ currently, despite much discussion about the advantages of such approaches. More common are the classic pricing methods (particularly market- or competitor-based ones).

There is a strong need to help public sector buyers make their case internally for the investment in technology services and solutions. Marketers can help with the production of tools and models for this purpose, but benchmarks and references are also powerful as ways of both demonstrating value and reducing the risk of decisions.

A good reference programme of successful projects in the public sector is agreed to be a must for marketers. The good news is that buyers in the public sector are often keen to talk about their successes, making it easier for experienced providers to tout their positive record and references. The only potential hitch is that buyers may be reluctant to talk about savings if it means that they become ‘shavings’ off their budget for the following year!

—Bev Burgess, info@itsma.com

ITSMA Europe will run another public sector marketing roundtable event next year to exploring these issues in more detail. If you would like to attend or recommend a colleague, please contact Sammy White at +44 (0) 1892 523060 or swhite@itsma.com.

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About ITSMA
ITSMA specializes in helping companies market and sell services and solutions more effectively. As a membership organization, we provide research, consulting, and training to the world's leading technology, communications, and professional services providers to generate increased demand, strengthen customer relationships, and improve brand differentiation. ITSMA is based near Boston, and has offices in London and Tokyo. Learn more at www.itsma.com.