EP106: Breaking Into State Government Contracting
The $1 trillion infrastructure bill provides an opportunity for small businesses to develop a new revenue stream by way of state government contracting.
But if you jump in and start bidding without a game plan, you’ll lose 95% of the time.
And while it might feel risky to put significant time and effort into the necessary prep work, you’ll be much more likely to win state contracts than your competitors who bid cold.
On this episode of The RFP Success Show, I share our seven-point plan for breaking into state government contracting, explaining why it’s important to start with a strategic plan and conduct market research to learn the procurement landscape.
I offer insight on building relationships in a state government setting, challenging you to develop a monthly outreach calendar and sign up for your key target vendor lists and RFP aggregators.
Listen in to understand the RFP Success Company’s response capacity framework and learn how these seven steps will help your business secure high win rates on state government contracts.
Key Takeaways
Our 7-point plan for breaking into state government contracting
Strategic plan
Market research
Relationship-building strategy
Bid opportunity tracking
Short-term response capacity framework
Long-term response capacity framework
Response management
How to identify your target market, ideal project and high-value clients
Why I suggest developing prospect and competitor profiles as you learn the procurement landscape
The myth that you can’t build relationships in state government contracting
How to develop and execute on a monthly outreach calendar
Why it’s crucial to sign up for key target vendor lists and RFP aggregators
How to create your assessment criteria, content library and response process
How long-term goals inform the team, tools and resources your business will need
How our 7-point plan secures high win rates on government contracts
Resources
RFP Success Show EP106 Transcription
(00:00):
You're listening to the RFP Success Show with eight time author, speaker, and CEO of the RFP Success Company, Lisa Rehurek. Tune in each episode to learn what today's capture and RFP teams are doing to increase their win percentages by up to 20, 30 and even 50 percent, and meet the industry trail blazers that are getting it right. Let's get started.
(00:24):
Hello everybody, and welcome to the RFP success show. I am your host, Lisa Rehurek, founder and CEO of the RFP Success Company. Today. I'm talking to you about breaking in the state government contracting. So we have a lot of listeners and a lot of clients that come to us saying, "Hey, we want to break into state government contracting. It's something that we've never done before, or we've kind of dabbled in it. We've dipped our toes, but we really need to ramp up. We haven't been successful yet. How do we make this a better, more successful opportunity for us?" That's what we're talking about today, either breaking into or really ramping up state government contracting. And we've developed a seven point structure that we believe has to be put into place before you can really see success. You can think of this as your high level overview of your roadmap for success.
(01:22):
That's we're going to talk about today. Again, it's going to be high level. There's a whole lot of details that go into each one of these, and we'll probably be doing a lot more podcasts about each one of these points in more detail. But right now, I really want to share with you that high level overview, because what happens is most companies just jump in and start bidding and then they get frustrated, right? It's a recipe for disaster to do that because you're really going to lose way more than you're going to win. What happens? Then you do that. You get frustrated. You think state government contracting isn't for us. Bidding on RFPs is a losing proposition. Because in that structure, just jumping in without a game plan, it is a losing proposition, for sure. And we want to help you understand what it is that you need to have in place and how you can start planning for this so that you can see success in state government contracting.
(02:18):
That is a viable proposition, by the way. There are a gazillion different companies that out there, because obviously the government buys mostly through RFPs. They buy a ton of products and services. So it is an opportunity. And right now we're even seeing companies that have always said no, particularly in the technology arena said, "No, we're not going there." Now with new infrastructure bill that is going to come out, all of these monies that state governments have for infrastructure, oh my gosh. There's so much opportunity for so many different kind of companies, construction, manufacturing, like I said, technology, because we need technology to support a whole lot of what's happening. So there is a lot of growth opportunity there in state government contracting.
(03:11):
The other thing I want to say before I jump into our seven point structure is this. I know it can feel uncomfortable and risky to put time and resources into the first six steps that we're going to talk about. I get it, because you're going to put time and effort and money towards this not knowing if you're ever going to win. But it's just the same as any new line of business you choose to invest in in your business. You've got to do the work up front and be prepared before going all in. I'm telling you now, it's going to cost you a lot less and it's going to be a lot less risky to do this work up front than it is to bid on one cold RFP after another. It can cost you anywhere from, on average, $10,000 to $50,000 to respond to an RFP. I will even tell you for the larger ones and as you start getting into bigger multimillion dollar contracts, billion dollar contracts, it can cost you hundreds of thousands of dollars to respond. That is not a joke.
(04:13):
So there is a lot of time and effort that goes into it. It's not that different than the sales effort going into a big opportunity. That costs time and money as well. It might just not feel as consolidated. So I don't want you to think that this is a losing proposition, but what I want you to hear from this podcast episode is that you have to have your ducks in a row. Just like you wouldn't go build a house without a plan, you need to build this new line of business as an investment up front before you go all in. And as you go through these steps that we're going to talk about, you might find in step one or two, that, okay, this is not really what we want to be doing. And then that's a good time to abort and go back.
(05:00):
But if you are saying, "Hey, as a company, we are looking for a new revenue stream." And a significant revenue stream, which I think so many companies are doing right now, because guess what? We like to have diversification, it's great to have different revenue streams. This is a fantastic opportunity. These are sales opportunities that are already handed to you on a silver platter, meaning there's already an opportunity there, you know they need it. You know they've got the money for it. It's just a matter of building the relationship and the trust in order to win the business. So I am a huge proponent, of course, because I own a company called the RFP Success Company. So we know that there is a lot of opportunity out there. We just want to help you break into it or ramp up to get that success that you are looking for. That is what we're here to do. So let's jump into this seven point structure that I keep talking about.
(05:53):
Step number one is develop a strategic plan. If you've listened to me at all, you hear me talk about strategy all the time. I'm a huge proponent of strategy. The reason being is that it sets the stage. It helps you lay the foundation. Probably also heard this quote from me that I talk about that I've heard from my dad. If you don't get the foundation right, it's going to follow you all the way to of the roof. And we see it time and time again when companies come in and say, "Oh, we've tried to state government contracting, but we've tried five and we've lost them all." It's like, okay, well what market are you going after? What's your game plan? What are your goals and objectives? And they're like, "I don't know. We just had this RFP. It came across our plate and it was a service that we could provide." And then they go after it, and you're just going to lose most of the time. Certainly there's times you can get lucky, but most of the time you're going to lose.
(06:44):
So step number one, develop a strategic plan. What does that look like? You've got to define your market. Where can you stand out and who wants your services? Where is the market for what you offer and where can you stand out? There was, I believe it was the episode right before this one, and we'll put this in the show notes, with my coach, Charles Fred. He owns a company called True Space and he does this really well. He helps you define your market and develop market criteria. And one of the things that he says that I love the most is that your market, your target market should be a market where you can stand out. And I love that because it makes us look at it just a little bit differently instead of just blending in with all of our competitors. It really allows us the opportunity to say, "Okay, where are we going to stand out?" And I know for me and our company that has been a game changer. So you develop some market criteria around what kind of a market do you really want to work with?
(07:46):
Number two is you define your target prospect. And again, quoting Charles Fred, is you want to develop high value clients. You want to know who your high value client is. One of the things that he says, and said in that podcast episode just the previous one to this, is that your clients are either going to help you build your business or deplete your business. So who is that target high value client that is going to help you build your business? And there's more to it than that. There's also, how much do they value you? How high maintenance are they going to be? Are they going to nickel and dime you? It is a beautiful thing. When you find those high value clients that just get you and they get what you offer, they want what you offer, it's a partnership, and that is the most beneficial for everybody. So that's what you need to do is define that high value client.
(08:45):
The third piece of developing a strategic plan is diving into your ideal project. So it's not enough to just know your market and your target, but to support that is, what does your ideal project look like? And there are things, like obviously financial. What kind of a margin? But what kind of a project is going to excite your team, is going to help your team grow and develop into new things, is obviously aligned with the expertise that you provide? So it's just about the market and the high value client, but it's also about the project. What kind of projects do you really want to be working with?
(09:22):
And when we work with our clients, we actually have a package at the RFP Success Company, where we take clients through this whole process. We work with them for about nine months to really develop all of this, starting with the strategic plan. And I love working on the developing of the ideal project criteria, because a lot of times people don't even think about it at that level. They're just like, "Okay, we can do this work. Let's go do it." But a lot of times what happens is when we just say, "Hey, we think we can do this," it's so hard on the staff because it's not in alignment with really what the company should be providing. So developing that ideal project criteria is very important.
(10:00):
And then fourth, and this is no big surprise, identifying your annual goals and objectives. What is it that you're trying to accomplish in year one? In year two? In year three? We like to do a three year runway because a lot of times in that first year you might bid in, you're going to lose a little bit because you don't yet have the momentum of the relationships, and people don't necessarily know who you are. So understanding that runway for your ROI is extremely important, because when you're looking to invest, you need to know when you're going to get a return on that investment. So that's step number one.
(10:36):
Step number two in this seven point structure is market research. So now you've got all of that. Where do you find targets, right? Where do you find them? And what's great and brilliant about going into state government contracting is there's just a lot of information out there. You just have to have somebody that is well versed in digging around and making phone calls and that kind of market research. So you've got to then take all of that criteria and say, "Okay, who are our top prospects?" And develop prospect profiles to go with that so that you can identify, making sure that they match with that criteria that we've identified in step number one.
(11:16):
So we develop those prospect profiles. We've got a team of people that go through and do all of this for our clients, and it's really fun to see what comes out of that market research, because there is just a ton of info when you start thinking about FOIA requests. If you're not familiar, a FOIA request is a Freedom of Information Act, and state government contracting, there's just a ton of public information available under FOIA. Whereas if you're working in corporate America, it's hard to get some of that info. So it's really fun to develop those prospect profiles, because there sometimes can be just a gold mine of information.
(11:51):
Another piece of the puzzle is learning the procurement landscape. So you're going to have state agencies that are your top prospects. Now of course we're looking at state government contracting, so it's going to be a state agency of some sort. What is the procurement landscape? How do they buy? Is it a centralized or decentralized procurement department? That's hugely important when you get to the relationship building step, which is step number three, we're going to talk about here in a minute. So understanding that procurement landscape, hugely important. Identifying the competitors. So who's playing in this? And again, this is fun information because you can generally find this. Who is the incumbent contractor? Who's bid before? Who might be out there trying to bid and get into the space like you are? So identifying those competitors and then developing some competitor profiles around that so that you can better understand your competitors.
(12:43):
Why is that important? Because when you go to write your proposal, you've got to understand your competitors. You've got to understand what is happening with your competitors. Because if you don't, you can't write to your differentiators. How are you going to know how you're different than your competitors if you don't know who your competitors are or anything about them? So very, very important that you have that information as well. So we always suggest you having somebody who is in charge of this. Don't ask your sales person to do it. Don't ask an administrative assistant to do it. Hire somebody that knows market research that can be dedicated to this process, because you want these done and you want them done well, and you don't want somebody who's like, this is kind of a side job for them, because it's just never going to get done, and you're going to be in this rip tide swirling around and never getting that forward momentum that you need.
(13:40):
Okay, let's go on to number three. Number three is a relationship building strategy. So, yes, relationship building strategy's so important, and yes, it can happen with the RFP state government contracting work. Most people say to us, "Well, you can't really build relationships." I'm like, "Yeah, you can. Guess what? You can." It's so important to do because if you're bidding cold, you're going to lose 95 percent of the time. If you're bidding cold, honestly, you have less than a five percent chance of winning. But you've got to get a warmth going there with the buyers and the procurement officials. So the interesting thing about state government contracting is that you got to deal with the procurement folks and you've got to deal with the buyers that sit in an agency somewhere.
(14:24):
So developing a relationship strategy for how you're going to reach out to these people, we develop a monthly outreach calendar for all of our clients based on who their prospects are, based on what they're trying to achieve. And then we sit down and we say, "Okay, let's map this out. What does that look like?" That monthly outreach calendar is a combination of email, phone calls, in person, which is a lot harder in state government contracting, but there are some plays there depending on the state and the agency. So we strongly encourage you to develop this monthly outreach calendar. And then if you have to, develop email and phone scripts. And again, this is something that we do for our clients so that it's just easier for them to kind of follow along. Depending of the sophistication of your sales team that's going to be building these relationships, you might need those scripts.
(15:17):
Also, developing marketing and sales collateral. What should that information say? Sometimes that looks like best practices or white papers. It's not just a sales piece like, "Here's our capabilities." You've got to give them some value. And actually something that I didn't mention in the market research is that there's also industry understanding. What's going on in their state? What's happening behind the scenes? In the area that you are expert in, the more that you know that, the easier it's going to be to flow into this relationship building, because you've got to give them something of value. You just can't keep calling them up and saying, "We want to build a relationship with you because we want to do work with you." That's not what I'm talking about here. And it's with any other sales relationship, you've got sales call, sales development, business development opportunity, you've got to build a relationship. And it's the same here. So there are different things that you can do, but I would start with that monthly outreach calendar and then making sure that you've got supporting materials in order to help facilitate that outreach.
(16:26):
And then last but not least, the other part of relationship building strategy is, do you have a supplier diversity strategy if applicable? And what that means is if you are a diverse supplier, a woman owned business, a minority owned business, anything that falls under small diverse business certification, and you can look that up, you should also have a strategy for that, because a lot of times the procurement entities have requirements for how much companies need to use supplier diversity. And so I could go on a soapbox about this, but what happens is that you could have a huge company that's bidding on an opportunity and they have a 20 percent requirement to outsource 20 percent of the work of that contract to a small diverse business. So if you're a small diverse business, there's all sorts of strategies that you can have there to not even necessarily go directly to the state government agency, but to work through a partner. So there's another piece of the puzzle there, but all of this under this relationship building strategy umbrella.
(17:32):
All right, I'm going to take a quick break, give you a quick commercial and I will be right back with item number four on this list.
(17:40):
Is your company looking to break into state government contracting? There are seven key components that must happen before you dive into state RFPs. Jumping in without a solid strategic plan and the right pre-planning could cost you time resources and lost revenue. Learn more about the RFP Success Company's state government services, and book a call at findrfpsuccess.com.
(18:07):
All right, everybody, welcome back. So we are now on item number four of our seven point structure for how to break in or ramp up your state government contracting. So once you have those first three pieces of the puzzle in order, now you've got to figure out where the opportunities are, right? Hopefully by now you've identified your target. You know who the states are. This is very simple, although it's time consuming, is to sign up for vendor lists. The best case scenario is that the agency buyers know you and they will reach out to you when they get an RFP. However, you can't rely on that for a multitude of reasons, so you want to sign up for key target vendor lists.
(18:53):
And this just takes a little bit of time and a little bit of perseverance, because you've got to call the state. You've got to call the procurement departments. You've got to find out what different kind of vendor lists they have. Not all states just have one. Some of them also have what's called an MSA or some version of that, which is a master services agreement, which gets you to be a preferred vendor, which then agencies can go to, and you're already somewhat pre-approved. You're still going to have to respond to an RFP, by the way, but you're somewhat pre-approved. So it's important to understand, goes a little bit to that understanding the procurement landscape that we talked about under research, and making sure that you're signed up to get emails for any of those vendor lists.
(19:39):
The second thing that we recommend is signing up for an aggregator. Now, please don't sign up for an aggregator alone. And what an aggregator is, is they're findrfp.com, BidSync, Ombia. There's a handful of them. There's a bunch of them out there, actually. You want the ones that specialize in state governments, but they're just not all inclusive. And they're going to lag a little bit. You're going to maybe not get something for three to five days. And in the world of RFPs, I'm here to tell you three to five days is like a lifetime. You need those three to five days because you don't have a lot time to respond. You want as much time as you can get.
(20:18):
But I also like the aggregators because it gives you a little bit of a backup to the vendor lists. So it's just a little bit of a safety net, if you will. So we recommend going out and signing up for both of those. That's what we do for our clients, is we get them on all the vendor lists and then we sign them up for the right aggregator with the right key words. And then they've got things coming in from a couple of different places, and in case that agency buyer doesn't call you direct, you see what's coming in.
(20:49):
All right, now we move on to the next piece, tenet number five. And this is the response capacity framework. And we break up response capacity framework into short term versus long term. And the reason is that there are things you need to do in the short term to get that first RFP going, but there's also things that you need to plan to for the long term. And we're going to talk about both. So the first one is short term, right? And what does this look like? Number one, it's developing assessment criteria. So that RFP comes in, it sits on your desk, you look through it, you look at the title, you look at a couple of quick things and you're like, "Oh yeah, we can do this."And you're off to the races. This happens often. We have so much experience with companies that do that. They look kind of at a high level and they jump in.
(21:38):
That assessment criteria is massive, because you only want to be bidding on things that you should be bidding on. Not that you can be bidding on, but that you should be bidding on. That assessment criteria is driven off of who your target client is, who your market is. Remember that project criteria that I talked about in number one? That is part of this as well. We also want to look at things that are deal breakers for you. And so those are predefined upfront. You need to predefine those and have a list and go through that checklist. The other thing that the assessment criteria checklist forces you to do, is it forces you to look at the whole of the RFP instead of just the high level scope of work that you're like, "Oh, we can do this. Let's do it." There's so many other factors that come into play and it forces you to look at the terms and conditions. It forces you to look at the pricing. It forces you to look at the timeline, resources needed, all sorts of things.
(22:37):
We were working on an RFP not too long ago and we were three very, very solid weeks in with a week left to go, and they were realized that the state was looking for them to be on site in that state. Their staff had to be on site, and they're like, "Well, we can't do that." And they had to quit. They had to bow out. It is painful to do that because you just spent time and money and resources to go forward with this, and then all of a sudden to have to board it over something that could have been recognized very early on. So that assessment criteria is huge.
(23:18):
The other piece of short term framework that you need is a library where you have key content. We have 16 pieces of key content that we work with our clients on that we suggest you having. It includes things like the about us, and what are some differentiators and some different credibility statements. There's a list of 16 things. And it's so much better to have that up front and be able to pull from it and draw on it to leverage it for your response, versus trying to write from scratch when that RFP hits your desk and you're working on a deadline. That is no fun.
(23:56):
So having that key library content ready to go is something that we do before. We strongly suggest done before you've been on your first RFP. The other two pieces of the framework for short term, developing a response process and documentation of that process, and then identifying key roles. Who's going to play those different key roles? Making sure those job descriptions are done, making sure that the role descriptions are aligned with the right people, all of that. So that's your short term framework.
(24:27):
Now, when we look at the long term framework, what we look at is things like your longer term goals and objectives. What do you want to achieve in one year? Three years? Five years? The reason that that's important is because it really encompasses mostly the team. So what kind of a team do you need now? And then what kind of a team are you going to need into the future? Are you going to build that internally? Or are you going to outsource that to a fractional support team?
(24:53):
Internally, if you're going to build that, what does that growth look like? What are the milestones? When are you going to add new team members? How are you going to do team building and training and hiring and managing and motivating? All of those things, that all needs to be part of that long term framework. Also, what tools and resources do you need? Do you need to bring a software in that's going to help you manage all of your content and manage your responses? So there's a lot to think about more in the long term than the short term. So there's two different frameworks.
(25:25):
And then the very last piece of the puzzle is actually responding to an RFP. Now that you've got all of that in place, it's time to respond to your first RFP. So there's that decision point of, this is the right one we've gone through, we've gotten this through. It's one of our target clients. It's in our market. We have gone through the assessment criteria and we are deciding, yes, we're going to move forward. So now you've got to manage the response and you've got to write the response and you've got to have all those pieces with the puzzle ready to go.
(25:57):
It's something that we do when, again, this process that I've just laid out is an opportunity that an offering that we make to our clients, they come in and they hire us for this whole package, and then we help them with their response management on that first response. We help them with more than that, but on that first response, we help to walk them through what that looks like. Particularly if you're a company that has never worked in state government at all, it is really important to have a partner with you to help walk you through and to help you avoid those landmines and the things that we can plan all we want, but inevitably, there's more things that'll pop up in that RFP because every RFP is different.
(26:37):
So that response management piece, it isn't easy. It's hard. The content piece is important to understand. How to position yourself, how to not write all about you, make it more about the client and their solution, making sure that you're answering the questions. So there's a big strategy around response management, which is a whole other topic that we don't have done for today.
(27:01):
Whew. So that's a lot of information that I just threw out to you, but I just want to go through, again, this kind of the seven points that we've talked about. One is developing a strategic plan. Two, market research. Three, relationship building strategy. Four, bid opportunity tracking. Five, short term response capacity framework. Six, long term response capacity framework. And then seven, actual response management. So there you have it. The seven key areas that you really need to develop to build that foundation. And when you do that and you do that right, it's going to set you up for continued success, and you'll be one of those companies that builds that culture, transforming your organization into a state government contracting winning organization. Those are the companies that have high win rates of 70 to 80, 90 percent. 90's high, but 70 to 80 percent win rates, because they're bidding on the right things and they know how to bid.
(28:04):
All right, everybody. Thank you so much for listening. If you haven't subscribed, please go subscribe to our podcast so that you don't miss a beat. And we will look forward to seeing you here on the next podcast. Again, I'm Lisa Rehurek, your host. Until the next time.
(28:18):
This has been another episode of the RFP Success Show with Lisa Rehurek, eight time author, speaker, and CEO of the RFP Success Company. Thank you for joining us. If you have feedback on today's episode, email us at podcast@RFPsuccess.com. No matter your business size, industry, if you have an in-house RFP team or need outside support, the RFP Success Company helps increase RFP win ratios by 10 20 and even 50 percent. Learn more at theRFPsuccesscompany.com