The ScaleUp Guide to Federal Marketing: Establishing Credibility and Gaining Traction in a Lucrative Market
The federal government is a massive market with over $90B in annual IT spend and contractual relationships that are large and sticky, providing significant opportunities for revenue expansion over time. However, taking the leap should by no means be considered a small endeavor. The federal government is complex, riddled with regulations, and fraught with lengthy sales cycles that require significant upfront investment before realizing any returns. Marketing to the federal government requires a unique set of tactics and strategies that all ScaleUps should practice. Entering this market unprepared could mean years of misallocated time and resources.
To help companies avoid these pitfalls, Insight’s Marketing Center of Excellence conducted interviews with internal experts and portfolio company leaders, including Nick Sinai, Senior Advisor at Insight Partners, Lauren Franco, Senior Manager, Field Marketing at Recorded Future, and Hanna Wong, Director of Public Sector Marketing at Keeper Security. In addition to our interviews, we conducted secondary research and gathered relevant industry data to help inform your go-to-market. If you are just getting started with or looking to scale your federal go-to-market strategy, we encourage you to download our “ScaleUp Guide to Federal Marketing” for a roadmap on how to gain traction in this market.
1. Federal Marketing Must Align With The Customer Mission
The federal government is not like a corporation that is traditionally motivated to generate revenue and maximize profits. Rather, at its core, the government is an entity whose mission is to serve the public good. This distinction is critical to understand as it should inform your approach to your go-to-market strategy. Marketing to the federal government demands a custom approach: it cannot be one-size-fits-all and building trust is foundational to success. Organizations must prove that they have invested the time to understand the priorities of their buyers as well as communicate domain expertise:
- Develop your agency-specific lexicon: Each agency has its own language and aligning your company’s vernacular will ensure your message resonates with prospects and customers. While many sales and marketing teams take a one-size-fits-all approach, you can quickly differentiate yourself by translating your messaging into the language that resonates with the specific agency you are targeting.
- Stay current on government and agency-level initiatives: Federal government initiatives are constantly changing as new policies, pieces of legislation and executive orders are put in place. The federal marketing team must stay up to date on relevant news that impacts its target agencies. It is important to tailor your messaging to what is currently top of mind for your prospects and customers and how your solution can help facilitate their current priorities.
2. Creating A Federal-Specific Strategy with Supporting Tactics
A successful federal go-to-market strategy should focus on a set of key strategic and tactical building blocks. Core components include creating a government capabilities statement, establishing a clear in-person and hybrid events strategy, and investing in relevant digital marketing.
Government Capabilities Statement
The government capabilities statement is a simple, easily digestible, one-page document that clearly communicates core competencies, past performance, case studies for social proof, competitive differentiators, and any pricing or contact information.
Virtual & Hybrid Events
When COVID forced a transition to virtual events, federal marketers lost a key point of interaction with buyers to drive awareness, consideration, and secure placement on their agendas. However, the role of events continues to evolve, and companies that will succeed will have a roadmap in place for hybrid events that deliver to different attendees’ risk tolerance.
Federal IT buyers stay up to date through online publications, downloading thought leadership, attending virtual webinars, and participating on social media platforms such as LinkedIn. COVID-19 only accelerated this trend as without in-person events, buyers had to prioritize online methods of vendor discovery, evaluation, and selection.
3. Building a Team and Designing a Budget
Success in this market cannot be achieved with a perfunctory approach, but rather, requires a company’s full commitment to acquiring relevant expertise and dedicating the necessary resources. Prioritize finding the right leader and creating milestones to communicate leading indicators of effective and efficient spend.
An experienced federal marketing leader will not only bring critical knowledge of the market including budgeting cycles and funding processes but should have existing relationships across the ecosystem of buyers, distributors, and other partners. A seasoned leader should be able to navigate through the inherent complexity, reduce time to pipeline, and substantially improve your organization’s chances of success.
Meanwhile, marketing leaders need to carefully consider what their federal marketing budget can support and have an ongoing conversation with the CEO to align expectations. Federal marketing will most likely be an ROI-negative endeavor in the initial years, as entering new markets takes time to mature, especially those with potential sales cycles of multiple years.
4. Creating a Channel Strategy
Building a channel partnership program is table stakes for entering the federal market. Building strong partnerships help gain exposure to new leads, accelerate new logo acquisition, and unlock cross-promotion and expansion within existing customers. Establishing traction in Year 1 is highly dependent on the organization’s ability to identify and secure relationships with partners that can help secure that first win. For example, establishing a strong relationship with a VAR early on can help coordinate marketing activities with key tech partners and distributors who often hold the key to agency buyers.
Meanwhile, technology integration partners and distributors (Carahsoft, Immix, DLT) have large networks and hold significant decision-making authority in the market. Many agencies sign exclusive agreements with their distributors, forcing vendors to sell through their distributors for any contract. Nurturing distributor relationships pays dividends, results in greater marketing efforts on your behalf, but can often result in significant discounts.
5. Understand the Long Game: The Path to Recurring Revenue and Upsell Opportunities
Like traditional marketing, the success of your federal marketing will be highly dependent on the level of investment and execution. Given the high degree of ramp-up and long sales cycles, it is critical to set expectations for stakeholders and align on the right KPIs. Measuring both top of the funnel KPIs (# of target accounts, engaged accounts, qualified meetings, Opportunity $), as well as ROI KPIs (gross dollar retention and customer lifetime value), are important in order to communicate to both the CEO and the board about how marketing is making measured progress in the absence of new $ ARR generation.
Federal marketing will require a significant up-front investment of time, money, and resources. It will also require a heightened level of customer-centricity and a unique set of foundations, strategies, and tactics, the results of which may take years to realize. However, it can pay huge dividends and massive returns. Complete the form below to gain access to the full guide, which includes data points, guidance from federal marketing experts, best practice examples, and tactical checklists, so your organization can successfully build foundations, establish credibility and gain traction in this lucrative market.