Market Connections, Inc. Releases 2016 Government Contractor Study Analyzing Top Marketing and Business Development Activities and Challenges
Fairfax, Va. – June 30, 2016 – The long government procurement process is the top challenge for both business development and marketing professionals in federal government contracting, and contractors are employing automated tools, thought leadership materials and events to mitigate those challenges and stay competitive, according to a new report from leading government market research firm, Market Connections, Inc.
Market Connections released the highlights of the 2016 Federal Government Contractor Study at a breakfast event this morning at the TEGNA Conference Center in McLean, Va. The national study of government contractors focuses on top challenges and best practices of winning contractors, including the most effective marketing and business development activities, strategies to remain competitive and expected changes in budgets, staffing and new business strategies in the next two years.
“The data backs up what we are seeing with our own clients. Over the past year, we have seen a record number of mergers and acquisitions in the federal market in order for companies to improve their focus and stay competitive. Winning contractors are also embracing thought leadership and automated tools to differentiate from the competition and increase win rates,” said Lisa Dezzutti, president and CEO of Market Connections.
The New Realities of Staying Competitive
In an era of federal budget cuts and lowest price, technically acceptable (LPTA) procurements, contractors note being more selective in what they bid on as the top action their firm is taking to cope in today’s environment. Four in ten also indicate looking at different markets outside of government and increasing the use of teaming partners.
To remain competitive, large businesses are significantly more likely to reduce staff, participate in a merger, acquisition or divestiture or to close facilities. Companies with higher new pursuit win rates rely more on lower cost junior staff, while companies with higher re-compete win rates are less likely to impose salary caps and freezes.
Thought Leadership Works
Three quarters of respondents (75 percent) rate thought leadership materials as the most effective marketing tools. Senior executives agree—87 percent cite thought leadership materials as effective. Speaking at large industry-wide tradeshows and conferences (71 percent) and hosting their own events (66 percent) also rank high on the list of effective marketing activities. And companies with higher new pursuit win rates grade themselves significantly better on demonstrating thought leadership and subject matter expertise (61 percent) than companies with lower new pursuit win rates (38 percent).
“We do not have budget problems in the federal government. But we do have an issue of leaders who need to implement change. To sell that change, you must be positioned as a thought leader and be able to provide insights and solutions they may not know about,” said Anthony Robbins, vice president of global defense at AT&T, who sat on the panel at the breakfast event.
Automation Makes a Difference
Four in ten companies (42 percent) currently use an automated capture management solution, while 28 percent are considering adopting a solution. Companies with higher win rates and the majority of their business with the federal government are nearly twice as likely to use an automated capture management solution. Those using an automated system less often report challenges around the long government procurement cycle, increasing and maintaining profitability and lack of staff.
Changes to Expect in the Next Two Years
In the next two years, respondents expect increases in the use of teaming partners (58 percent), the number of proposals they will submit (50%) and the use of both marketing automation (40 percent) and automated capture tools (38 percent). More than one-third expect marketing (38 percent) and bid and proposal budgets (35 percent) to increase, while 34 percent expect marketing budgets to stay the same and 40 percent expect bid and proposal budgets to stay the same. The largest staffing increases will come among sales and business development personnel, while bid and proposal and marketing functions will largely stay the same.
Download the overview of results at www.marketconnectionsinc.com/GovConStudy2016.
About Market Connections, Inc.
Market Connections, Inc. delivers actionable intelligence and insights that enable improved business performance and positioning for leading businesses, trade associations and the public sector. The custom market research firm is a sought-after authority on preferences, perceptions and trends among the public sector and the contractors who serve them, offering deep domain expertise in information technology and telecommunications, health care and education. For more information, visit www.marketconnectionsinc.com.