For companies looking to broaden their market and reach new SaaS customers, the B2G (business-to-government) sector can be a huge potential source of additional revenue. Government clients often set long-term contracts with their vendors and can initiate a number of high-volume projects for various SaaS solutions.
However, selling solutions to government entities is a very different process and requires you to understand the nuances of B2G SaaS selling cycles. Here's a comprehensive guide to help you navigate the government procurement landscape and increase your chances of success.
Understanding the Government Procurement Landscape
It’s important to know that the procurement process for government buyers works very differently than traditional B2B transactions. Since government entities need to be transparent at all times when it comes to how their funds are being allocated, going through several stages of due diligence before committing to a SaaS vendor isn’t uncommon.
Certain regulations like FAR (Federal Acquisition Regulation) place very strict protocols on government spending. It’s important for B2G companies to get a sense of what these regulations stipulate and if their organizations are in alignment with the required certifications that may be required to do business with the government.
Unlike individuals or businesses, governments generally don’t purchase their products or services outright. This is especially when purchasing for board service categories like public safety solutions or other larger projects. Instead, they will usually acquire their technology through a formal process like an RFP (Request for Proposal). In these situations, businesses will pitch to them directly, outlining their service offerings and price points.
The final decisions of whether or not a government decides to move forward with a particular SaaS vendor typically doesn’t rest with one person. It usually involves a team of specialists and budget officers that will come together to choose the most appropriate option for the project.
Developing a Winning B2G SaaS Sales Strategy
Once you have a better understanding of the B2G selling format, it’s important to create or adapt your SaaS selling strategy to see the best results. You can do this by building your strategy on these important categories:
Value Alignment - While many companies may be quick to target the lowest price points in their bids to the government, it’s important to focus on your value proposition first and foremost. Government contracts tend to last longer than typical business ones, which means government entities may be willing to pay more for a service they know they’ll be able to trust, which will bring them long-term value.
Security and Compliance - Security and compliance standards are non-negotiable in government settings. This means that if you aren’t currently in alignment with the documented requirements of RFPs there is no point in leaving a bid. You’ll want to spend a fair amount of time researching any government standards in your niche to make sure you’ll be able to be considered for any B2G deals.
Relationship Building - While final decisions of government sales are rarely left to one individual, this doesn’t mean that you should invest time into building relationships with appropriate contacts during the bidding process. Since government sales cycles tend to be longer, having reliable contacts who can help you make sure your business is checking all the necessary boxes during the proposal process can be very helpful in ensuring your bids are seriously considered.
Accepting Longer Sales Cycles - One of the largest challenges of selling SaaS services in the B2G space is the timeline to close. It’s important that you stay patient during the process and recognize that projects can often be stalled or budgets repurposed. Don’t let this discourage you, as there are often a variety of RFPs you’ll be able to take part in every year.
Creating Effective Proposals and Bids
Considering the amount of proposals that most governments will receive during their open buying seasons, it’s important that you make sure your proposal outshines the rest. Here are some ways you can help to ensure this:
Pain Point Focus
It can be tempting to provide a list of features that your SaaS solution provides without necessarily connecting the dots on how and why they are important to your potential customers. This is why you should focus primarily on the pain points that your audience is likely experiencing and, specifically how your solution can help to address them.
Compliance Adherence
Compliance is a major deal when selling B2G products. There is a good chance that many companies may try to glance over this topic, but you should make it a point to highlight all the different ways you’re solutions are designed to support the government’s regulatory requirements. This could be by highlighting all of the relevant certifications you’ve attained over the years and any actions you’re taking to ensure the security of your SaaS application.
Transparent Pricing
Because the selling cycles can be lengthy during RFPs, it’s important to answer as many questions as possible in your proposal by providing completely transparent pricing. While most government bids should be formatted with your best offer up front, you may be able to offer a few different pricing strategies depending on the variable needs of the organization.
Attention to Detail
It’s important that you take the time necessary to make sure your proposal is as accurate as possible.Â
While most RFP terms are finalized after a bid proposal gets selected, you’ll want to have all of the information requested completely as accurately as possible to avoid any misconceptions down the road. This not only makes you look more professional but can also help speed up the review process once the proposal is submitted.
Start Winning More B2G Bid Proposals
B2G selling can provide many long-term revenue opportunities for SaaS companies, but it does require a unique approach to gaining and closing new leads. By following the guidelines provided, you can greatly improve your chances of getting your RFPs selected and create long-term relationships with various government entities.Â
Author: Kevin Ruef
Kevin Ruef co-founded 10-8 Systems after exceeding multiple companies’ sales records (both domestically and internationally). With more than a decade in sales, his experience ranges from B2B, B2G, and B2C. Since the company’s start in 2019, Kevin has been responsible for business development, strategic partnerships, and business operations.
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