Your Marketing Focus for FY 23
When I was a younger man, photography was my passion. This was back when cameras had film and auto-focus was just a fantasy that photographers dreamed. But then as now, focus was critical. You had to distance yourself from the subject to make sure you had the right composition that included the subject and without a great deal of extraneous items in the viewfinder. Once you had the composition right you’d twist the ring on the outside of your lens until the image was sharp and clear.
As we move from the pedal to the metal period of proposal writing of the 4th quarter of the federal sales cycle, I think about this as a serviceable metaphor for a marketing strategy in the coming year. We want to zoom in on a market segment that we can see our subject opportunities fully without a lot of extraneous information. Then we can make the effort to create a sharp picture of the addressable market.
I work with a bunch of small contractors. For many of them the business development department is the owner plus a piece of one or two staff members. This might expand to take on the extra duties during a proposal effort, but the amount of staff time for marketing is limited. Capture best practices state that you must tightly focus on a narrow market, to achieve a greater level of visibility and market knowledge to be more competitive. Smaller is better.
So, when I ask a new client what their focus is, they might answer, the Department of Health and Human Services. Now my client is a company with 25 or 30 employees with most of them 100% billable and they want to focus on an agency with 80,000 employees and a budget north of $1.5 trillion. As their advisor, my job is to help them zoom in to a tighter market segment.
Within HHS, clearly the Center for Medicare and Medicaid Services is very different from the National Institutes of Health which is different from the Office of Women’s Health. Does the owner +1 really have the time to get to know the mission and culture of every sub-agency of HHS, the key procurement contacts, the preferred vehicles, and the potential teaming partners? Is it even worth trying?
What about the Office of Women's Health in HHS? This target seems more manageable. The HHS employee locator shows 25 staff members. We could get to know this office well. However, the 2022 HHS budget in brief says their budget is only $35M. How much of that is going out in contracts? How many of those contracts are within the capabilities of one of my clients? What if it is 2 RFPs per year? If we put all our development efforts into OWH and my win rate is 50%, will that one contract be enough to justify the development budget and meet the owner’s goals? Probably not.
That is the conundrum. I want my market to be big (HHS) so I have a bunch of things to bid on; yet I don’t have enough time and resources to cover all that territory.
Here it is, the first week in October and it is time to set the BD strategy for FY 23. If you are brand new to federal contracting, or you want to open a new market segment to pursue, how do you zoom in to the market segment that is large enough to be worthwhile but small enough for you to pull it into focus so you can win business.
Figure out SOME way that you can set yourself out from the crowd
· Mechanism access
· Past performance from another industry or agency that sounds like what they do in your target market
· Staff experience in the agency
· Next door neighbor with connections
· Teaming partner connections (although those teaming partners are going to be looking for the same differentiators as above)
Notice this list does not include technical superiority. I am assuming that your company does what you do excellently and has a good price point. Some owners new to federal contracting delude themselves into thinking that just because s/he can perform on the proposal SOW as it is written that they have a good chance of winning. The problem is that there are so many other companies that do just what you do. Some of them have connections to the agency that help them target their offer or get a more favorable review from the evaluation committee. The secret sauce in your marketing is to know how you are different and choose those opportunities where that difference is going to matter.
Notice this list does not include set-asides. A set aside is not a means to differentiate or win, it is only a way to reduce competition. Any company making resource allocation decisions needs to consider whether the set aside is favorable for them. This goes for choosing the market segment (do they set aside business in a way that is favorable for my company) to the capture stage (is the incumbent or expected recompete contract set aside favorably for me) to the bid/no bid stage. But set asides are not something that differentiates you in the eyes of the teaming partner or buyer unless it also comes with market intimacy, relevant agency past performance absent some rare and truly superior aspect to your technical delivery.
Case Study 1. A woman-owned small business with past performance with the transportation authority in her state as well as a marketing contract with a technology system that connects first responders across the country. In her industry, marketing communications, there is a great deal of work in the Department of Health and Human Services. However, knowing that there are many players in that segment that have strong health past performance she skipped HHS in favor of a full-on effort to become known in the Department of Transportation through small business advocates and networking through her state transportation contacts. She won a small marketing contract in DOT and now is pursuing some potentially big opportunities connected with the bi-partisan infrastructure bill. She was also able to spin her work with first responders to win work with the Commerce Department reaching the same audience. A past contract with a state agency that was funded by Immigration and Customs Enforcement played well enough for her to win a contract in DHS.
Case Study 2. A marketing communications startup has staff experience in the Veterans Administration, Army and the health sector and is SDVOSB. The management of this company spent a considerable amount of time making connections with larger prime contractors working in the VA and DoD health space. While they consider many prime contract opportunities, most of the time they come up against well entrenched and strong competitors in the space. For other work with weaker or no incumbents, the award decisions come down to the lowest priced offer among a group of similarly experienced firms. Where this company has excelled is in the ability of the leadership to make connections to technology, research and management consulting firms that operate in the agencies where they have past performance. They bid as a subcontractor supporting a marketing task within a much larger prime contract. The SDVOSB status helped win subcontracts for VA work under large primes. Too often a company will only have the prime contracts in their capability in their viewfinder, when often there is a bunch of work embedded in larger work scopes that established, larger contractors need help with.
What is your best strategy in FY 23? Fearlessly examine your company past performance, your staff experience and your network to find the answer. How do you stand out? What work are you best situated to win over the competition in your market? What agencies are easiest for you to network in and around?
Tell me what you think of these ideas and share with me your success stories (and failures that you learned from). Happy hunting! You can use the comment facility on this post or send it directly under Contact.