Live From The MeritDirect Co-op: Follow The Money — Back To The Government

In fiscal year 2006, the federal government had $412 billion burning a hole in its pocket. Direct marketers may be getting their share, but there’s no reason why their share shouldn’t be larger, according to Mark Amtower.

DMers may not realize how much of that $412 billion is already landing in their coffers. Common wisdom — which is wrong wisdom — holds that marketers ought to avoid mailing to government or agricultural prospects.

“I can give marketers a list of credit card prefixes — the first four numbers that are used exclusively for government purchases,” Amtower, president of Amtower Companies, a business-to-government (B2G) consultancy, said. “When they look at their sales records, they find that 2 to 5 percent is federal, and they never knew it.”

Those numbers are even bigger among pure business-to-business marketers. “We do profiles of our B-to-B clients — those in healthcare, education, city and state government, and religious organizations,” said Peter Long, CEO of MCH, a business-to-business list and database provider. “We find that 30% of their customer base resides in these segments.”

Long cautioned that marketers targeting governments must consider several unique factors. First, the network of individuals who influence and authorize purchases is considerably more complex than in private industry, and a marketer must be sure the right person is solicited. Second, timing concerns can yield some low-hanging fruit, but that fruit can spoil quickly. Unlike private industry, where dollars saved at the end of the fiscal year can show up in employee bonuses or be reinvested into the company, most government entities’ budgets are on a use-it-or-lose-it basis. That which isn’t spent is lost, and subsequent budgets can be cut as a result.

The trick, therefore, is to know when each entity’s budget year is turning over — June, September, the end of the calendar year — and to time campaigns accordingly. Give lingering funds a place to go. But timing counts: Miss the end of the academic year and not only will the funds be gone, but so too will many of the teachers who could influence purchases.

The good news is that the level of data available on purchase influencers and decision makers is considerable, according to Jeff Moriarty, vice president of list management at Merit Direct. There are compiled files, but there are also response-based lists from conferences, catalogs, and magazines — and controlled-circulation magazines require a great deal of information on their qualification cards.

“Look and see how detailed you can be in finding the person responsible for specific products,” Moriarty said. Don’t just look for maintenance product purchasers: There are files that offer government officials who buy ground protection products, and some even go as detailed as lawn mowers and other equipment. Likewise, software, hardware, hazmat equipment and other product lines often have dedicated purchasers.

Identifying the right customer isn’t the only tactic B2G marketers should use. Tailoring material to the audience boosts empathy, and therefore response rates, Moriarty continued. And don’t afraid to get granular: Rather than featuring a generic military figure on a catalog cover, use a separate image for each service. Don’t rely on the same copy for elementary and higher education mailings.

Anne Armstrong, president and group publisher at the 1105 Government Information Group, a government-focused magazine firm, reaffirmed this point, citing tensions and differences between state/local and federal government branches. Often state and local governments are more nimble, and more daring, than their federal counterparts. They can launch pilot programs much more quickly, and these can show results — which can be used to build future relationships and sales — much more quickly as well.

For those marketers who find B2G marketing daunting due to the specter of endless paperwork, Moriarty noted that 350,000 government credit cards under the SmartPay system racked up $17 billion in charges — and purchases under $3,000 do not require contracts.

There are hazards for those who would pitch for government business. Get a reputation for sending proposals for every potential contract, and government agencies will take note — and not in a good way. Your company may be solicited for bids by a buyer which has already chosen its vendor, but needs to show it has evaluated a minimum number of proposals due to regulations.

E-mail can bolster marketing efforts as well. Washington-based government offices often irradiate — to the point of baking — catalogs, or hold them up in mail rooms while the books are scanned for foreign substances, according to Armstrong. Government e-mail names are usually selectable from list companies: Many have .gov (government), .mil (military) .us (United States) or .edu suffixes, which aid selection. State governments often use state abbreviations in their domains. And e-mail messages can be timed toward the end-of-fiscal-year time frames.

But even this channel isn’t without its pitfalls. The Department of Defense routinely blocks HTML messages — only text-based e-mails get through, Armstrong said. She recommended sponsoring pre-accepted newsletters or e-publications, as requested publications do get through.

“We are seeing, in the institution space, a lot more spam-blocking technology, especially in schools and healthcare facilities” Long said. “If you don’t do your campaign in exactly the right way, a good portion will get washed out.”

Amtower, Armstrong, Long and Moriarty spoke at a panel held during MeritDirect’s Business Mailer’s Co-op and Interactive Marketing Conference.