Will You Be Able to Tame the Transition?

Allan Rubin 65x85summit-white-houseBy Allan Rubin, Vice President of Marketing, Arrow Enterprise Computing Solutions

A new administration always brings change in Washington. But how will a Trump or Clinton White House affect the government IT market? We won’t know for sure until a few months in, maybe even a year.

That’s exactly why immixGroup’s upcoming Government IT Sales Summit includes a session on Taming the Transition: Marketing & Sales Tactics for a Year of Turnover. I’ll be moderating a panel of speakers with years of experience in government marketing and navigating presidential transitions.

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Shielding Yourself from Sequestration

photo_Chris Wiedemann_65X85- one postby Chris Wiedemann, Senior Analyst

If you had a chance to view immixGroup’s Market Intelligence briefing on sequestration yesterday, you hopefully have a better understanding of what the proposed cuts mean to IT companies.  Tim Larkins summarized the history of this situation – what sequestration is, when it became law, and just how those cuts (which weren’t really supposed to happen) actually arrived. He also covered some of the projected long-term impacts of sequestration on federal spending. This information is all vital – it will help you understand your customers’ pain and better equip you to discuss the cuts they’re experiencing.

Today, though, I want to take a minute to reemphasize some of the key components of Tim’s presentation: what does this mean for federal sales? The “snowquester” is actually a pretty good metaphor for the impact of these spending cuts on the federal IT market: some segments will stay pretty dry, while others may well get buried. So what should we be doing to shield ourselves from sequestration?

First and foremost, when you’re finalizing a deal with your customer, make sure the money is there. That means asking your customers two questions: what activity account is funding the purchase, and is the right amount of money in that account? Remember, while program people are creating demand, they have to request that money be transferred from Treasury into the right activity account before they can actually buy anything. This is the step where the sequestration cuts are actually taking place – think of them as a leak in the cash pipe. That leak could mean that money intended to purchase your products is actually getting lost before it ever lands in the right activity account. Don’t forget: unless you and your customer both know 1) which account is funding a purchase, and 2) whether that account contains the right amount of money, you’re subjecting yourself to potential delays and hang-ups down the road. You might even not get paid.

A few more points that I want to emphasize:

  • Although the long-term impacts of these deficit cuts will probably be minimal, we are going to feel the pinch in the short term. Federal IT spending will decrease overall this year, particularly in DOD, where they have been spending as though the sequester would not be implemented.
  • Most of the cuts to IT spending will probably be felt by systems integrators and services contractors, both large and small. All the language coming out of OMB and other government sources indicates that there are many duplicative or otherwise unnecessary IT services contracts that will probably be descoped (or cancelled outright). This is bad news for small business subs on large contracts, but is actually good news for the COTS community, since government will need to buy more tools to perform the tasks that they used to outsource.
  • Keep your audience in mind. At the executive level, demonstrating cost savings and value is going to be more critical than ever – if you can’t demonstrate real ROI within two years of purchase, your customer likely won’t be interested.
  • At the end of the day, there is still a mission that has to be met, and government customers won’t be able to use sequestration as an excuse not to do their jobs. If you or your clients can help them meet that mission, you will still find a willing audience.

As always, if you have more specific questions, I urge you to reach out to the Market Intelligence team. Good luck and happy hunting.

Reloading Your Federal Marketing Toolbox

photo_Allan-Rubin_65x85by Allan Rubin, Vice President, Marketing

My mother likes to complain that my father takes tools from the toolbox and doesn’t replace them, leaving her with a handful of nails and no hammer to drive them. Frustrating, right?

Marketers trying to attract the attention of government buyers face a similar dilemma: tools are getting taken from our tool kits and not replaced. Since my last posting about government event cancellations, we’ve heard of at least two more: the Department of Homeland Security’s 6th Annual Industry Day and DIA’s Defense Intelligence Worldwide will not take place.

Traditional media sources continue to struggle, with editors and reporters being downsized and print magazines continuing to consolidate. The impact of Sequestration cuts on major contractors and systems integrators is unlikely to help this trend as marketing budgets will surely be hit.

Those of us who are active in lead generation (via phone campaigns, email blasts, and events) will surely see conversion rates take a hit as furloughs kick in. What’s the best day or time to call or email someone if they’re not working that day? Will ongoing furloughs, downsizing, and political fights over giving a meager 0.5 percent pay raise break their spirits and drive them out?

Today’s blog post in FedConnects raised a few interesting questions. Among them:

How will government address the need for civil servants and military and intelligence workers to stay abreast of new technologies, innovate and collaborate in order to increase efficiencies and ensure productivity?  As part of President Obama’s Open Government Initiative, we are supposed to be operating under an open government mandate that encourages less siloing, more sharing of services and innovations.

How can true transparency and efficiency be achieved if government is restricting collaboration and opportunities for government leaders and industry to share ideas and work on problems?

If your organization relies on you to create demand in the public sector, it’s time focus on finding new tools to supplement the old ones. Will virtual events play a role as live conferences drop like flies? What role will associations play in educating our customers? How about social media driven information sources like GovLoop and Federal Technology Insider? I think it’s time to work some of these into your public sector marketing budgets, in addition to the targeted, local, and low-key events that were highlighted in Market Connections’ recent study.

Speaking of tools, we have a few that can help you make sense of Sequestration and the ongoing budget mess. Our Sequestration Resource Guide provides our take on how to deal with the pending cuts and also points you to market intelligence resources that can help. In addition, we’ve already had hundreds of IT sales and marketing professionals register for our upcoming webinar on Sequestration and the Federal Budget.

With so many tools vanishing these days, make sure you re-evaluate and take advantage of the ones that are left.

A Tale of Two Subject Lines

photo_Allan-Rubin_65x85by Allan Rubin, Vice President, Marketing

I noticed an interesting juxtaposition of subject lines in my (overflowing) email in-box today.

Early in the day, I saw this message from Defense Systems:

DISA collaboration tool doubling its capacity

The top story was summarized as follows: “The enterprise collaboration tool known as Defense Connect Online is about to double in capacity as users seek less expensive ways to conduct meetings and training in austere budget times, reports DISA.” The piece caught my attention as it signaled recognition of the inevitable: government employees are finding new ways to communicate and collaborate since they can’t travel in person.

Not long after, I received a message with this subject line:

Latest Conference Cancellations & Postponements on GovEvents

 This email from GovEvents.com led with the following summary, which serves as a continuation of my last blog post on a similar topic:

I think GovEvents.com is a great tool that provides a valuable service to the community (if you don’t use it, you should). It just struck me as significant that a company which promotes government events led its outreach effort with a message about…the cancellation of government events!

We all know travel budgets and other restrictions are hammering the marketing media mix. We see today that our DoD customers are doubling their capacity to host their meetings, training sessions, and other communications virtually to cut costs and minimize scrutiny from ethics officials and their superiors.

What does this mean for government marketers? Should we be investing more in online media, virtual events, webinars, and the like? Face to face communication will never be replaced, but what will place a close second?

The more important question is: where are you placing your bets?

We’re continually looking into new avenues to help our manufacturers and channel partners reach their government customers. I’d love to hear from you about how your plans are changing.

More Cancellations for Government Events

photo_Allan-Rubin_65x85by Allan Rubin, Vice President, Marketing

My wife may disagree with this, but I take no great joy in saying “I told you so.”

It’s no secret that events targeting government employees have fallen on tough times. We’ve used this space repeatedly to encourage immixGroup clients and channel partners to re-evaluate their event marketing plans. Unfortunately, we’re seeing more and more examples to prove this re-evaluation is necessary.

We learned today that the DoD Cybercrime Conference has been “postponed” with the following message as an explanation:

“Based on DoD’s budgetary uncertainty, The Defense Cyber Crime Center (DC3) has been given direction to reduce the government expenditure rate. Therefore, DC3 and Technology Forums have reluctantly come to the decision that we will not be holding our annual DoD Cyber Crime Conference in 2013. We apologize for any inconvenience this may cause and appreciate everyone’s efforts and support.”

This came on the heels of this message which we received on January 15:

“In response to DoD and DON guidance, the DON IT Conference, West Coast 2013 has been cancelled. The conference was scheduled for Jan. 28-30, 2013, at the San Diego Convention Center.”

In mid-December we received this notification of an event postponement. Is this a precursor to another shutdown?

“As a result of much deliberation, as well as guidance from the Army, AFCEA International has reached the decision to move TechNet Tucson to Augusta/Fort Gordon, GA.  The event will be renamed TechNet Augusta, and take place September 10-12, 2013 at the Marriott at the Convention Center.”

While I can’t yet confirm this, we’ve heard rumors that many of the AFCEA conferences may be cancelled this year. We hope that’s not the case but it’s worth watching.

The drop in demand for government event attendance was clear in the recent data put out by Market Connections. This confirmed what most of us already feared:

“With shrinking budgets and fewer resources to support mission goals, federal government decision makers and influencers plan on attending fewer events this year. According to a recent poll by Market Connections, Inc., a leading government market research firm, 38% of government employees plan to attend fewer educational and trade events in FY2013 compared to FY2012.

The main reasons for the expected decrease in event attendance are budget and travel restrictions (78% and 58%, respectively). Just over one-third (36%) of respondents also report management will not allow them to attend events in FY2013. However, some government workers plan to attend about the same number of events (27%), and a few plan to attend more (5%).”

Market Connections notes a few silver linings in the data (summarized here). Most federal workers still prefer live events to webinars. They still see value in attending events to learn about new technologies in addition to networking. The key is to make sure your events align with the preferences of your target audience:

“Of the 400 government workers we polled, 58% prefer smaller, content-specific events over large trade shows with multiple vendors. Many of the respondents are thinking local, with seven in ten more likely to attend events that are close to home (69%) or hosted by a trade association (72%), as opposed to traveling to events that require a hotel (29%) or are hosted by a corporate entity (25%).”

So when your sales team or corporate office asks you to set up that glitzy product demo at the Ritz to attract 100 federal CIOs, you may have some bubbles to burst.

We’ve been proactive over the past 18 months to re-align our marketing programs to stay in front of these changes. If you’re an immixGroup client, contact your senior account manager or email me at allan_rubin@immixgroup.com to learn more.

UPDATE: As if on cue, I just got this message only a few hours after this blog post went live:

“Due to U.S. Department of Defense evolving budget directives and its current fiscal constraints, DISA has notified AFCEA International that DISA has cancelled its “Expanded Forecast to Industry” conference scheduled for 14-15 August 2013.  Senior DISA leaders are hopeful they will be able to resume the conference with AFCEA in FY14.”

Marketers Should Expect Scrutiny from Ethics Officials

Rita Walston, Director, Marketing Programs

I attended the latest Government Marketing Forum session last week to hear from three experts about “Ethics 2.2: The Changing Rules of Engagement.”  It was an excellent session with Anne Armstrong, president of 1105 Government Information Group, moderating a panel made up of Alice Eldridge, vice president and chief counsel, land & armaments for BAE Systems; Jeffrey Green, senior attorney and deputy ethics official at Department of Defense; and Stephen Ryan, partner at McDermott Will & Emery LLP.  The information the three of them provided was topical and relevant.

It also sent a chill through the room.

“The scrutiny of our community is coming,” we were told.

GSA and VA have become the poster children for inappropriate spending on events and marketing to employees.  As a result, careers were ruined.  Conferences such as AFITC were cancelled, hurting the ledgers of those companies that earn a living supporting such events.  Edicts emerged, such as the recent ban on Army attendance at non-DoD events.

The message from the panel was that there is, unfortunately, a fair amount of ambiguity among the rock-solid rules, but industry is advised to take the extra steps and err on the side of caution to ensure everything we do is above board.  Among the takeaways:

  • Food:
    • $20 or less, period.  While that can be difficult in pricey areas like DC, the rule doesn’t make exceptions for geography.
    • The “honor basket” is not sufficient.  You should prominently post cost and be able to provide a receipt on the spot to anyone paying for their meal.
    • If it needs a fork, don’t serve it.
  • Widely Attended Gathering (WAG) Exception:  the definition of what is or is not a WAG can be rather ambiguous.  Some ethics officers pin it at 25 or more attendees, some say at least 100 people, some look at how many different agencies and titles will be represented.  The panel’s advice is to include wording in your invitation that those interested in attending should check with their ethics officer.
  • Multi-Manufacturer versus Single Manufacturer Events:  Those “single-manufacturer symposia held at a nice place” were described by the panel as “troublesome”—which to me is a loaded word when spoken by a lawyer.
  • It was suggested companies might want to consider having a lawyer present during meetings with government.  This may seem extreme, but it does provide some insurance.

I believe government and industry need to communicate in order to ensure taxpayer dollars are being used to effectively accomplish agency missions.  The current environment is making that more difficult, and that’s where we, as marketers, as expected to get creative.  As we do so, however, we should keep in mind Ryan’s closing comments.

“There are implicit ‘wink-winks’ in this town,” he said, “and there will come a time that those become unwound, and you don’t want to be the poster child for that when it unwinds.”

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