Choosing A Winning Sales Strategy
By Kristine Fisher
When selling to state and local governments, or education, you have two main options: will you sell directly to the customer or will you sell indirectly by going through a partner channel? Direct sales strategies may be faster and easier to pull together, but indirect sales strategies increase your chances of success when pitching your project to the government.
Direct Sales
In direct sales relationships, your end customer is purchasing directly from your company’s internal team. When it comes to doing business with the government, direct selling may not be as sophisticated a sales strategy, so it’s quicker and easier to put together and you maintain control throughout the process.
When selling directly, you maintain control over the sales cycle, you have a tighter grip on your margins, and you have a direct relationship between your product and the customer.
The potential drawback of direct sales is that you’re setting a very high bar when it comes to differentiating yourself from competition. Some situations are great for direct sales strategies, but if you’re doing business with the government, indirect sales strategies are typically preferred.
Indirect Sales
Conversely, Investopedia describes indirect selling as “...the sale of a good or service by a third-party, such as a partner or affiliate, rather than a company's personnel. Indirect sales may be used in conjunction with a company's direct sales efforts or may be used in lieu of hiring sales staff.”
When you decide to sell through an indirect market, you start to involve additional companies, whether that’s a distributor, reseller, or alliance partner. Alliance partners are system integrators, merging multiple products to meet the needs of large government programs.
The downside to indirect sales is that it involves a certain level of sophistication in your sales strategy, which means it may take longer to build… but in my experience, I’ve learned that indirect sales strategies boost your visibility and increase your chances of sales success when pitching your project to the government.
Why the preference for indirect sales?
The answer is simple: The US government is based on capitalism, and as we know, capitalism is based on competition. The government has a fiduciary responsibility (especially when spending taxpayer dollars) to ensure that those funds are appropriated and managed through competitive means, and that the absolute best value is achieved when purchasing the product or service.
When your product is embedded as part of a larger program, it adds additional value. That value could be in the form of additional services, additional support, trusted advisors, oversight, or project management. No matter what, selling through a third party usually achieves a certain level of competitive advantage, and that is good for business (with the government)!
Are you a sales leader looking to develop or fine-tune your sales strategy? Book a call and we’ll get started.
Kristine Fisher, Business and Government Relationship Expert
Founder of Kaleidoscope Works, Kristine designs and implements strategic solutions for small, small, mid-market and enterprise business partners. With experience as a Procurement Officer for government, as well as the many national roles in the Private Sector, Kristine is an expert at enhancing your success when selling to State & Local Governments.
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