Tiffeny Price
650.279.9992
411@tiffenyprice.com
Tiffeny Price
650.279.9992
411@tiffenyprice.com
Marketing Programs Consultant
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President Obama plans to spend billions over the next several years on technology infrastructure in the new stimulus package
and the news has ignited tremendous interest in state and local and education markets among technology manufacturers in
the Bay Area and elsewhere.

A quick review of the mountains of information involving the stimulus package funding tells me that for solution providers and
manufacturers will see many wireless projects in K-12 and local government as well as higher education. I think there will be a
lot of interest in 802.11n wireless networks to support emergency communications and public safety projects. Both wired and
wireless infrastructure in the public healthcare markets is going to receive massive funding. I also think content management
and records management will have a lot of growth in healthcare and that will spur security and compliance IT spending,
especially for HIPPA.

Right now solution providers and manufacturers alike are swimming in a sea of slowly dissolving sales opportunities and
reduced pipelines in commercial sectors. So for many, the steady ebb and flow of state and local and education sales is a
strong attraction along with the enthusiasm for technology that the new administration brings.  

Less costly and easier to enter than Federal markets and packed full of funded IT initiatives; state and local and education
markets is proving to be the next best playground for technology manufacturers and solution providers.  

But all playgrounds have rules and the ones found in these markets have broad latitudes of interpretation when it comes to
selling technology products.  Here is my list of the top 5 myths that need to be dispelled in your company so you can fast track
your sales and marketing efforts.  

1. The government always buys from the lowest bidder, it’s a low margin business.
2. Now that I have a GSA schedule I can also sell to state and local and education markets too.
3. The RFP does not say how many they are going to buy so it must not be worth much.
4. Now that I have a contract I won’t have to keep bidding on projects.
5.  “We can sell our products in this state or institution. Our partner, distributor, or reseller can just add our product line onto
their state or education contract.”

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1. The government always buys from the lowest bidder, it’s a low margin business.

This myth can easily be paired with, “Why sell to the government? They never have any money.” It is my humble opinion that if
you hear this frequently from your state and local or education customers, you are either pursuing the wrong customer or they
are trying to get you off the phone or out of their office.  Like their commercial counterparts, smart state and local sales people
follow the money to find their customers so “no money” discussions don’t take place.

As far as always buying the cheapest thing from the lowest bidder, when it comes to technology products, this rarely is the
case. State and local procurement is pretty savvy at weeding out the fly-by-night low bidders. For manufacturers, you can expect
to see Gartner Group’s Magic Quadrant, state agency surveys, or meeting installed based thresholds as criteria for an
acceptable brand on a state contract.

Your competition rarely wins contracts because they have a lower cost than you. A more likely scenario is that your competition
had a winning proposal because they knew something about the customer that you didn’t and that gave your competition a
pricing advantage. Most state contract awards are based on having a good prior knowledge of the customer and a well thought
out proposal based on that knowledge.

2. Now that I have a GSA schedule I can also sell to state and local and education markets too.

I can’t help but smile a little when I hear this one. But I can easily see how some people get the impression that having a GSA
schedule means you are also handed the keys to the kingdom in state and local and education markets. After all, there are
tons of articles that tell you Schedule 70 holders can now sell to state and local government. Sounds easy as pie?

Here are the realities...

Yes, there is a provision made in GSA contract language that allows for state and local government entities to purchase IT
products. This is true. But remember these caveats for any sizable state and local project being purchased off your GSA
schedule:

In local government and public education sectors, your customer needs to have a purchasing agreement in place that
designates your GSA schedule as a contract vehicle.  Sometime this is easy to do, other times it can kill the deal. Make sure
this is set up ahead of time.

State agencies typically do not or cannot use GSA schedules for these reasons:  

•        In order for a state agency to contract independently they need to have their own purchasing authority. Most agencies do
not have this, as purchasing is handled by one central department. State law enforcement agencies tend to be the only
exception.

•        State agencies are almost always required to adhere to purchasing contracts or an “acceptable brands” list established
by the state department of information technology. These lists or contracts may or may not include your product or company.

The only technology contracts that I see in wide use among multiple state governments are contracts administered by the
Western States Contract Alliance (WSCA). We will talk about WSCA in another article. Until then, you can learn more about
WSCA contracts here. www.aboutwsca.org

3. The RFP does not say how many they are going to buy so it must not be worth much.  

Term contracts in the state and local rarely have dollar figures attached to them, but, they tend to be ones that are worth more
since all the state agencies within a state government buy from them.  

4. Now that I have a contract I won’t have to keep bidding on projects.  

Most contracts are awarded to multiple vendors so you still need to compete among contract vendors for the big IT projects.    
Sharpen your proposal skills. A salesperson with no proposal skills or support is like trying to plant  a daisy in the middle of a
monster truck rally.

5.  “We can sell our products in this state or institution. Our partner, distributor, or reseller can
just add our product line onto their state or education contract.”

Except for the catalog type IT contracts like CMAS, Ohio STS, and Texas CISV, solution providers cannot just add a new product
line to an existing contract.  I am not sure where the idea of just “adding a product line” came from, but the thought has
definitely taken hold among companies new to state and local and education markets.

Here are the facts:
State and local and education purchasing guidelines go the extra mile to make sure there is little to no overlap of products
available on their contracts. For example, if you have a contract for computer systems, this does not mean you can add a line of
printers to your contract.

It is important to remember key differences between state and local and federal purchasing, namely that state and local IT
contracts are formed by commodity, brand, or project, and GSA schedules are formed by vendor first, then commodity.

Also, remember myth #2 above. State agencies as well as education institutions have their own IT purchasing guidelines and
acceptable brands list that may or may not include your product.

Finally, you will find that state purchasing officials are keenly aware that increased contract purchasing volume translates to
lower prices or other vendor concessions. So expect them to act quickly to ensure orders are properly funneled and they are
quick to not dilute the contract value or create vendor conflict with competing contracts.

It is also interesting to note that some of the larger RFP’s for the supply of information technology products and services have
significant evaluation criteria geared towards marketing. Specifically, how your company will market the resulting contract and
expand its presence.
Copyright © 2011 Tiffeny Price, Mountain View, CA All rights reserved.
411@tiffenyprice.com
Five Myths about Selling IT Products and Services in State and Local and Education Markets

Find out how to navigate the finer aspects of state and local and education technology sales and fast track your marketing
efforts from industry marketing consultant Tiffeny Price. Learn more by contacting Tiffeny directly 650.279.9992 or visit her
website at
www.tiffenyprice.com. For overall business growth strategy and management coaching contact Michael Lisagor at
206.780.4202 or at
www.celerityworks.com.

Also see
www.stimuluswatch.org for up to date information on state, local and education funding requests.