Similarities and Differences between Government Contracting Business Development and Private Sector Sales
Sales is sales in any industry, right?
Wrong. While building relationships, assessing customer needs, and closing deals are common tasks in every sales process, there are definitely differences in approach, especially when it comes to private sector and government contracting sales. And understanding these similarities and differences can be extremely important to whether your firm is growing, shrinking, or getting penalized. Yup, penalized, fined, and potentially more – scary stuff!
Whether you’re hiring a new sales or business development leader, growing your private sector firm into the government space, or vice versa, you’ll need to navigate the differences between the sales processes of each of these industries to make sure you’re doing it right.
Check out the key similarities and differences in the categories below.
Developing Business Relationships
That blanket statement is true in the development of both government contracting and private sector businesses. In both cases, it is highly important to develop a positive relationship with existing and potential clients. Expanding your network of existing and potential clients is beneficial for the improved name recognition, work history, and list of references that comes along with those relationships.
Simply establishing those relationships is not enough though; you will need to regularly maintain each relationship you develop. This includes periodic communications, site visits, phone calls, and even holiday or birthday cards. This will make sure your client relationships remain strong and will protect you from falling out of favor due to unpopularity, inaccessibility, lack of recognition, or other reasons.
But you do have to be extremely careful in how you maintain these business relationships. Relationships within the private sector have a greater amount of latitude in what is allowed. Celebrating a sales agreement with a new client by having a lavish dinner or by enjoying a major sporting event together is perfectly acceptable in the private sector. A move like that in the government contracting world could land you in jail.
Every business developer in the government contracting sector has to be extremely sensitive to local, state, and federal restrictions on business relationships. Kickbacks and bribes are clearly defined and aggressively prosecuted in government contracts. Local “pay-to-play” laws will also dictate limits on the donations you are allowed to make to individual or group political campaigns.
You also have to be careful to avoid the slippery path of prearranging future contracts with your government clients. Relationships with government contacts are developed to improve your win probability but they cannot be used to bypass any applicable bidding laws.
Major changes to decision making personnel can be more pronounced and abrupt in the government contracting world when compared to the private sector. Private sector companies will hire, fire, expand and reduce in a generally fluid processes. These changes can often be foreshadowed by predictable measures such as poor sales, bad executive decisions, or loss of clients.
In government contracting, political shifts in elected officials of the governing body can result in major changes to agencies’ thinking, voting, and hiring processes. Political shifts are often accompanied with changes to appointed officials and key personnel in certain agencies.
Successful business developers in government contracting firms will often develop key relationships on both sides of the aisle while never allowing personal politics to enter their business decisions. This could mean making equal donations or attending fundraisers for both political parties. This will keep you in the good graces of both parties and safeguarded from dramatic or unexpected political swings.
Relationship development will always be crucial to the success of your company, but you have to understand the rules and nuances to be effective.
