When we think about what goes on in the halls of power in Washington DC, it’s easy to think that it represents a “world of politics” that’s mostly separate from the world of business. Of course, nothing could be further from the truth. Though there are certainly parts of government operations that aren’t influenced by domestic and international business interests, the truth is that business and effective sales teams are far more instrumental in shaping policy decisions than you might think.
Of course, nobody knows this better than companies who are actively involved in courting federal sales.
While much of the federal budget is comprised of funds that are identified for various programs and policies years in advance, the federal government also has a discretionary spending budget that is renegotiated and competed every year. And according to data from 2018, that discretionary budget totaled $1.3 trillion—with a T.
Obviously, $1.3 trillion is a pretty big pie that plenty of private companies would like a piece of. Still, the process of federal sales is highly complex, incredibly interconnected and always in perpetual motion. For those reasons and others, any business hoping to get a federal contract would do well to have a big picture understanding of the entire process.
To put it simply: the federal sales process can best be understood as a 3-ring circus.
To be clear, the comparison to a 3-ring circus isn’t to disparage the good work that the government does. Instead, it’s to make the point that like a circus, it has three major rings of influence, all of which are interconnected—and along the way there are plenty of spectacles and distractions to get lost in. When it comes to closing a sale (or getting an actual “contract”), many hopeful companies focus only on one aspect of the process, one stage of implementation or one key individual. The reality is that each of these federal sales represents a constellation of decisions.
As such, successful companies sell to a constellation of customers.
In a sense, the three spheres of influence are three different ways that federal sales can be pushed and pulled in different directions. But to get a better idea of the big picture, let’s take a look at each of the three spheres of influence more closely.
Of the three spheres, the sphere of agency may be the most flexible. To put it simply, the sphere of agency identifies a requirement or a need. These differ by department and agency, but they can be thought of in straightforward sales terms: these are the “holes in the market” or the “niches” that businesses and developers can move into to address. When it comes to your business, you can think of affecting this sphere by influencing either a department at large or any strategic individual within an area or department.
When it comes to industry, we’re talking about the developers, executives and major companies involved in a sector—the same sector in which you’re trying to make a sale. In the simplest terms, this often means developing strategic relationships with other businesses in the same arena as you, some of which may already have federal contracts or who may be putting out Requests for Proposals (RFPs) to which you might respond. By thinking of this sector more in terms of strategic alliances rather than outright competition, businesses of any size can make strategic inroads towards increased federal funding.
In order to get a federal opportunity authorized and actually funded, getting congressional approval is absolutely essential. Nothing happens without their approval and agreement—so they’re another important arena in which to exert influence. The strategic points of entry here are in developing relationships with Senators, Representatives, committees and caucuses however you can. If you have important information in an industry that’s relevant to legislation they’re working on, leverage that information that way to develop relationships that can be advantageous for everyone involved. While Congress doesn’t approve actual contracts, they fund the underlying requirement. You can help them; they can help you.
Although the world of federal sales is complicated, the important thing to know is to try to make sales from the beginning and to the whole process. If your company’s plan is only to submit a proposal from downstream information and hope for a contract, you’ll be leaving big opportunities on the table. . If you and your sales team are actively courting relationships with Congress, identifying needs, staying plugged in with other industry leaders and affecting your purchasing agency wherever possible, your chances of success are exponentially higher.
No matter how big your company is, using a 3-ring circus understanding of federal sales can take your business to a much higher level.