Four Government Sales Steps for Medical Equipment Manufacturers and Distributors to Win More Awards

April 4, 2024 | Government

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Winning government customers can be a game-changer for manufacturers and distributors in medical equipment sales. Government sales can often be lucrative due to their short sales cycles and recession-proof nature, helping companies survive the ups and downs of commercial sales and the erratic replacement decisions of private and public sector health systems. 

However, navigating the complexities of government procurement requires a strategic approach tailored to the unique needs of this sector. It doesn’t start with bidding on everything and seeing what sticks. Instead, to emerge victorious in this competitive arena, here are the top three key activities that medical equipment manufacturers and distributors should prioritize:

1. Understanding the Buyer’s Behavior and Preferences:

One of the fundamental pillars of success in government sales is a comprehensive understanding of the buyers’ needs, preferences, and procurement processes. It’s not just about knowing who buys what you sell but, more importantly, how they buy it. Government agencies often have preferred contracting vehicles, set-asides for small businesses, and specific purchasing schedules that are tied to an equipment life-cycle metric they like to follow. The good news is this information is public. You just have to know how to find and effectively organize it. Investing time and resources in market research can gain invaluable insights into the nuances of government purchasing and help you understand the contracting officers and decision-makers within the agencies. This knowledge enables them to tailor their offerings, pricing structures, and sales strategies to align with the government’s procurement methodologies, thus increasing their chances of winning contracts.

2. Pricing Research and Competitive Analysis:

Pricing plays a pivotal role in determining the competitiveness of bids. Conducting detailed pricing research and competitive analysis is essential for medical equipment manufacturers and distributors to ensure their pricing strategies align with market dynamics and customer expectations. Fortunately, publicly available sites such as the General Services Administration’s (GSA) eLibrary and GSAAdvantage as well as the Federal Procurement Data System (FPDS) provide pricing information for similar products and services and valuable insights into past contract awards.  By analyzing historical pricing data and benchmarking against competitors, companies can clearly understand prevailing market rates and price their offerings competitively. This enables them to develop pricing strategies that balance profitability and affordability while positioning them as attractive options for government buyers.

3. Cultivating Strong Relationships and Partnerships:

In the realm of government sales, relationships matter just as much as the quality of the products or services being offered. Building strong connections with government agencies, prime contractors, and fellow industry players can open doors to new opportunities and foster trust and credibility. Medical equipment manufacturers and distributors should proactively engage in networking events, industry conferences, and matchmaking sessions to forge meaningful partnerships with public and private sector stakeholders. Distributors should seek relationships with reputable manufacturers to enhance product offerings and capabilities. Merely asking for a quote from the manufacturer in which the product has already been spec’ed does not make a relationship. It needs to go deeper than that, including quid pro quo. Both parties need something from one another, whether a product, relationship, socioeconomic status, or contract vehicle. Companies can boost their influence and enhance their prospects of winning government contracts by cultivating a strong network of allies and advocates.

4. Developing a Targeted Sales Strategy:

A successful government sales strategy requires a laser focus on prospecting and leveraging available contract vehicles and set-asides. Medical equipment companies should allocate a significant portion of their resources—approximately 80% of their time—to proactive prospecting efforts to identify and pursue viable opportunities within the government sector. This involves leveraging existing contract vehicles, such as GSA Schedules, IDIQ contracts, and GWACs, to streamline the procurement process and gain access to a broader range of potential buyers. Additionally, taking advantage of set-aside programs for small businesses, women-owned enterprises, and disadvantaged firms can provide a competitive edge and increase eligibility for government contracts BUT remember the set-aside status is a very small part of your strategy. It’s also not your value. By developing a targeted sales strategy that emphasizes proactive outreach, strategic utilization of contract vehicles, and alignment with set-aside initiatives, medical equipment manufacturers and distributors can position themselves for success in the government marketplace.

Winning government sales in the medical equipment industry requires a multifaceted approach encompassing market intelligence, relationship-building, and targeted sales tactics. By focusing on understanding buyer behavior, cultivating strong relationships, and developing a strategic sales strategy, companies can enhance their competitiveness and maximize their opportunities for securing lucrative government contracts. With the right blend of comprehensive research, a well-crafted game plan, and, most importantly, persistence in execution, medical equipment manufacturers and distributors can thrive in the dynamic world of government procurement.

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MYTH: Since the amount of goods and services the government buys is not affected by a economic downturn as private industry, the best time to begin selling to the government is during a recession.

FACT: Developing an effective government business development strategy usually takes years. Waiting until the economy is in recession to pull the trigger on a plan can doom it from the start as this strategy takes time and resources to develop….items that seem to be more scarce when the economy is in a downturn.