In the last twenty years, we’ve seen federal IT spending rise and fall. However, even when the pie shrinks, it still remains full of opportunities for federal software sales vendors who are efficient and agile enough to adapt to a shifting sales climate. Some companies choose to proactively avoid targeting the federal government due to painfully long sales cycles or hopelessly complicated processes, despite the fact that federal technology sales are a $400 billion market.
While selling to the government can be more difficult and complex compared to commercial sales, the federal government tends to spend big when it comes to information technology.
Numerous companies have been successful selling to the commercial sector and assume they can push into the federal space by simply hiring an experienced federal sales rep who knows the industry. However, continuing to close deals the same way on the federal side is not that simple.
The difference between selling to the commercial market and the US Government is like night and day. Sales to the government is truly the flipside of commercial sales. Many companies try to go from one side of the fence to the other and aren’t successful.
Businesses exploring the federal marketplace should start by considering the different contracting options available to determine which fits the best. Companies looking to attract federal software sales professionals must express a strong understanding of what it takes to sell to the government. Selling to the buyer with the biggest wallet on the planet earth doesn’t happen with zero investment. This includes attending events, understanding certifications, partners and having realistic expectations when it comes to sales cycle length. Above all, companies need to make financial and time investments to make it possible to sell to the government.
Here are a few of the critical components to getting started selling to the government:
Working with a prime contractor is the fastest way to get started while subcontracting is the most popular partnering tool that allows businesses to test federal sales without suffering undue risk.
- GSA Schedules
Businesses both small and large sell under the terms of a GSA Schedules contract. GSA Schedules, also known as Federal Supply Schedules, are “indefinite quantity (IDIQ), long-term contracts under the General Services Administration. Originally developed to assist federal employees in purchasing products and services, GSA Schedules Contracts contain pre-negotiated prices, delivery terms, warranties, and other terms and conditions to streamline the buying process.
While it is not required that contractors hold a GSA Schedules Contract to conduct business with the federal government, many agencies will only place orders through GSA Schedules Contracts, so most businesses that conduct significant business with the government find it necessary to obtain one.
- Fedramp Certification
Cloud providers looking to sell to the government need to get certified through the Federal Risk and Authorization Management Program (FedRAMP).
FedRAMP is an authorization program requiring cloud providers to receive an independent security assessment conducted by a third-party assessment organization (3PAO) in order to sell cloud services to a government agency.
This is intended to be a one-stop-shop for government agencies to procure services from authorized cloud providers that meet FedRAMP requirements. Positive assessments reward providers with a Provisional Authority to Operate (P-ATO) so that government agencies may consider them for service.
- A Longer Sales Cycle
Federal software sales cycles tend to be significantly longer, compared to commercial sales cycles. Companies that want to attract and hire federal sales reps need to have realistic expectations for timelines to bring in business and what a salesperson can generate if the company is not set up properly to work with the government.
High-performing federal software sales reps are going to be most interested in companies that understand the difference between commercial and federal sales cycle times. If a VP of sales expects a federal sales rep to close sales in the same amount of time as a commercial rep, it’s more than likely the federal rep will not want to work for that company.