Differentiation in the age of commoditization

Lowest price is not the best indicator of long-term success in the government market, but but being a thought leader is.

In a government contracting landscape littered with the landmines of Federal Strategic Sourcing Initiative, lowest price, technically acceptal contracts, and reduced fees for skilled personnel, the need for your company to stand apart and above the crowd is more important than ever. Regardless of what they call it, GSA and the Office of Federal Procurement Policy  continue to push low price in as many ways as possible.

Winning on price alone is not a winning strategy for most companies. Further I don’t believe government procurement based mainly on price is good for the country.

I spoke at two conferences recently, each highlighting the need for company differentiation in similar circumstances.

Speaking at the fall Association for Proposal Management Professionals conference I addressed the value of the subject matter expert position in the bidding process. While there I attended a few other sessions, both on communications. Chris Simmons and Robert Katz both discussed communications in ways that help companies stand out in the oral portion of proposals, but both presentations also have broader implications. Communicating clearly and telling good stories is part of the sales process as well as part of the capture process. Speaking well is always a huge differentiator.

At the NITAAC Contract Holders event I spoke about what it takes to sell from a GWAC, in part about why you need to differentiate your company’s capabilities. Lots of the Q&A revolved around how to respond to RFQs, especially when the customer does not know you.

If the buyer doesn’t know you, that is not their problem –it’s your problem, and one that you can and should address.

Both conferences brought to the fore the need for legitimately and carefully differentiating your company in ways that resonate with buyers and influencers, then developing and sharing information around your differentiation points.

Value marketing content

Differentiating then developing and sharing pertinent content will help address concerns about whether the customer knows you or not. Market Connections 2015 Federal Content Marketing Review has one slide that illustrates how content is valuable at every stage of the procurement process, from the identification of the need for a product or service to the decision to award.

The slide is a graph of the seven stages of that process and eight types of content that can influence the process. The seven stages are identification of need, budget allocation, determining requirements, drafting RFP, identifying qualified contractors, proposal evaluation and then the award. The content types include webinars, case studies, enewsletters, ebooks/interactive publications, marketing collateral, infographics, podcasts, and blogs. The graph illustrates which types of content work best at each stage.

Differentiation is much more than simply saying “we’re really good at X”. It is the process of determining what you do best that customers need, then providing verification to the customer that you are indeed good at what you claim.

In the 2012 Government Contractor Study (also by Market Connections), there is a slide on the best marketing tactics. The number 3 tactic is “thought leadership materials”- and it has an asterisk saying that companies that produce these materials have a higher win rate.

top marketing elements

Why a higher win rate? They are differentiating themselves by claiming a slice of intellectual real estate that is valuable to the buyer, then developing and sharing information to facilitate the buying process, skewing the buyer’s preference toward them.

To be successful, the process of differentiation needs good content for validation of your differentiation claim. Otherwise you may as well have a business card that proclaims your goal is 150 percent customer satisfaction, exceeding customer expectations, claiming your Mom makes the best cookies or some equally nebulous claim.