Although often time-consuming and sometimes difficult, government accounts can be well worth the extra effort.
By Janet R. Gross
Government and paperwork. The two seem to go hand in handand someone has to supply all those forms and documents. Although many government jobs must be bid, making account loyalty uncertain, such customers are still courted by some distributors.
Reno, Nevada-based Intraform services Nevada's workmens compensation department. According to President Doug Clary, the state's threshold for competitive bids is $12,000. "That's a pretty good printing order," Clary
noted. "There's a lot of printing under that amount."
Department heads want to avoid the state's cumbersome purchasing process when they can, Clary explained. "They will request a particular vendor for a new order, with the idea that they get the consultation and design for free. Then they bid out the repeat order. But those opportunities are few and far between," he said.
Most jurisdictions have far lower bidding thresholds, which makes winning government jobs tougher. SBF (formerly Systems Business Forms), Savannah, Ga., services federal, city and county accounts and must bid on any order over $500, said President Chip Grayson.
"They don't have to go with the low bidder, but if they don't, they have to be able to back up why they chose another vendor," he explained.
To help win such jobs, SBF plays up its reputation as well as its line of furniture products and services such as storage, free local delivery and a forms management system with extensive reporting. Still, Grayson noted that it's a more difficult sell than retail accounts.
Another approach to winning government customers is offering specialized services. FORMost Graphic Communications, Rockville, Md., has won a growing business producing and mailing tax bills for local municipalities.
"We like to do things that are very complicated, as that limits the competition," explained President Jim Feldman. FORMost's full-service approach and extensive experience in direct mail "demonstrate to people whose jobs depend on a foolproof system that we're able to get the job done," said Feldman.
Distributors say they start their sales pitch at the department head level and work down. In some cases, there's a small team of decision makers. "Usually there's one person responsible for sending out tax notices and maybe a few people under them that we deal with," Feldman said.
In other instances, there are numerous contacts. "Government offices are a beehive of people," Grayson remarked. "There may be thre
e or four people in a department who will order products and you have to know each one and their idiosyncrasies as well as have the blessing of the director or administrator. You have to be everybody's pal."
Even after cultivating dozens of contacts, the distributor still has to go through purchasing, which tends to focus more on price than relationship, Grayson said. "Government is the hardest account to work."
Because of bidding directives, customer loyalty is variable. "They try to be loyal and generally prefer to stay with the distributor that gets the job right, but they're forced to bid," said Feldman, who consistently bumps heads with two directs. "Some we keep and some we lose and then get back the next year. If the directs get highly aggressive, there's nothing we can do."
Grayson said there is less loyalty from SBF's government customers than its retail accounts. "You can strike up a great relationship and [the department personnel] will say they want you. But if you go to bid and your price is too high or the county is under the gun with the budget, you're done."
Conversely, Clary has found his government accounts to be more loyal than others. "If they find a good vendor who does a good job and understands the printing process, they tend to stick with him," he said.
However, despite the vagaries of bidding, distributors report their government business is growing. Aggressive courting of city and county agencies has doubled SBF's business in that niche in less than a year, Grayson reported. Feldman has seen FORMost's municipal business blossom 12 percent to 15 percent annually.
"If you do the job right, they're receptive to anything else you offer, especially if it makes them more efficient and lowers their costs," he noted.
Lowering costs can be a double-edged sword in the government realm, however. Most agencies strive to spend all that's in their budget so funds will be maintained or expanded the next year. "They want to spend every dime because they want to see the budget go up, but if they're over budget, we're the guys to feel the hit," Grayson said.If it becomes apparent that there are unspent funds, an agency may rush to order at the end of a fiscal year. Most cyclical orders, however, revolve around timetables for sending tax bills, vehicle registrations, etc.
"The fiscal year is different for everybody," Feldman said. "Sometimes the municipalities will send their own follow-up notices; sometimes we handle it. The idea is to be flexible."
Grayson said his government customers procrastinate more than other accounts. "Then they demand to have orders in on time. Purchasing doesn't necessarily act on bids right away and the person ordering can get upset if the forms are late." Diplomacy then comes into play as the distributor avoids pointing fingers while apologizing and waiving rush charges.
- Places:
- Reno, Nevada