Government Sales Incentives

A breakdown of how selling to government differs from private sector, focusing on incentive structures and decision-making processes.

Core Differences in Incentives

• Private sector decisions are based on direct benefits to the business/individual
• Government purchasing decisions often don't benefit the decision-maker personally
• Government officials' power/earning potential often tied to:
  • Keeping costs high
  • Maintaining high manpower
  • Avoiding displacement of existing systems

Government Sales Challenges

• Deals not frequently recompeted
  • Some contracts only reviewed every 35+ years
  • Less opportunity for new vendors to enter
• Heavy lobbying and marketing requirements
  • Success often depends more on influence than technology
  • Need to convince multiple stakeholders at different levels
• Local politics heavily influence decisions
  • Jobs dependent on existing systems
  • Politicians deeply involved in procurement
• Decision makers may actively resist cost savings
  • No incentive to reduce budgets
  • May see efficiency as threat to their position

Private Sector Sales Advantages

• Faster decision making process
• Only need to prove value proposition to end customer
• Customers directly benefit from:
  • Cost savings
  • Increased efficiency
  • Reduced manpower needs
• More frequent evaluation of vendors/solutions
• Merit-based selection process

Success Strategy for Government Sales

• Build relationships with right partners in government
• Understand what government actually needs
• Invest own money to build working solutions first
• Prove capability before seeking contracts
• Focus on technological superiority
• Be prepared for longer sales cycles
• Maintain credibility through demonstrated success

Risk Factors

• Government officials may not benefit from your success
• Political considerations can override merit
• Existing contractors will actively resist displacement
• Need significant capital to self-fund development
• Must navigate complex bureaucratic processes