The Name of the Game Is Differentiation

Times have changed in government contracting.

Once upon a time, in the land of Washington D.C., the Federal government preferred sole-source contracting, and that was a strong focus of every contractor. Contractors would jockey for a position in the hopes of positioning themselves for and winning a sole-source contract. Today, the days of hoping for and utilizing sole-sourcing as a core corporate strategy are pretty much over.

The government has slowly and purposefully increased competition requirements. Today, you may be up against 50 other companies responding to the same RFP. This example isn’t an exaggeration. Our company recently threw our hat in the ring on a contract, and the interested vendor list totaled just over 50 companies.

The government is continually coming under fire to acquire the best products and services they can and at the lowest price – even to the detriment of quality and value. That’s why you see Low Price Technically Acceptable (LPTA) more and more often in government RFPs. But, this doesn’t necessarily imply procuring the cheapest products. It means evaluating price and other factors, not limited to quality, benefits, delivery speed, guarantees, and a whole host of other factors to get the very best deal. The problem for many companies today is that they don’t communicate enough value, benefit, and other differentiating factors to minimize their competition’s competitiveness.

Like you, we often hear stories of companies who lost a bid but felt they were the most qualified or had the best products. It’s marketing and branding 101, and it’s as simple and as complex as that.

How do you not only get noticed but stand out from the crowd and SCREAM, “MY COMPANY IS THE BEST CHOICE”! There are two primary ways to solve this problem. The first is by implementing a process where you understand and know how to communicate your differentiation, and the second is strengthening your capture strategy so that you ultimately produce more qualified opportunities to bid on. Just understand that adding more options to your pipeline without clearly communicating your differentiation is akin to filling a bucket with water when the bucket is riddled with holes. You will ultimately waste a lot of opportunities and precious time fighting a losing battle. That is why we recommend strengthening your differentiation first and then working on your capture strategy and why the remainder of this article will focus on differentiation.

Companies are constantly looking for and coming up with new ways to differentiate. Today I want to focus on just five of these strategies. These five strategies are, in our opinion, the core pieces of differentiation that every company needs to understand and constantly refine.

1. Capability Statement: Your capability statement is one of your primary tools because, when developed correctly, it is a critical document that communicates the benefit and value of your products and services with the prospect and communicates the ability for your company to make a partner / prime contractor more competitive with you on the team. It includes who you are – an overview of the company, your approach to clients and/or partners, past performance, your products and/or areas of expertise, certifications, company data, and contact information. Most importantly, your focus is communicating value and benefit – not simply what you sell or the services you provide. These are the basics that MUST be in your capability statement. In addition to this, you want to approach this as a marketing piece and have it carefully designed to focus on value. This is not a place to skimp on graphics or the look and feel.

An excellent capabilities statement may also list your areas of expertise and break out your services into categories using keywords and phrases that would often be used by a contractor looking for your assistance. We also suggest listing any government or commercial contracts that you have to build credibility and make buying easier for those already authorized to use those contract vehicles. We have several different examples. If you’re interested, let us know, and we’ll send you a copy that you can review and use as a template.

2. Leveraging Past Performance: Whether it’s your capabilities statement or your response to an RFP, you must convey your past performance. Most companies don’t do this very well. Part of this strategy includes an ongoing process of collecting past performance. To do this, you have to constantly engage your employees and find out what they are accomplishing for your clients. It would help if you also did a debrief or after-action review (AAR) after completing every project. In one debrief for one of our clients, we found that an on-site employee had been working on the next-generation accounting system for a Fortune 500 company and our client had no idea their employee had been doing this as a side project. So have a plan in place for discovering past performance and then determine how and where you will communicate it. One recommendation is to create a past performance folder. You can use a word document or another tool like Evernote to track these. Just make sure the device you are using has a simple search function. I like using Evernote for the simple reason that it will show me notes related to each other. So if I create each past performance piece under a separate message, the system will automatically find and connect additional notes. This then becomes extremely helpful when you are looking for all past performance related to a specific topic. Finally, most commercial and government markets have a folder either on a computer or shared drive with past performance write-ups that they’ve used in proposals.

3. Positioning your Competencies: This is a process you will follow each time you approach a new client or contract. The first step to positioning your competencies is something called Competency-Mapping. “Competency-Mapping is a method that forces you to evaluate and map the value and benefits of your products or services and differentiate them based on a specific prospect, that prospect’s unique problems or challenges, and/or a specific opportunity.” (Excerpt from The Government Sales Manual.) This process often starts with the simple question, “How is this competency important to the client, and why do they care”? Beginning with this shapes your process and forces you to answer the prospect’s most important questions. This approach allows you to take your competencies and map them directly to a prospect’s problem or need, which will result in a custom approach to solving your prospect’s requirements and help you stand out from the competition.

When approaching a new client or contract, you have to take a step back and clearly understand the client’s most significant challenges/needs, how you can solve their problems, and how best to communicate this information. The days of boilerplate answers and boilerplate capabilities statements are over. Sure, you can reuse marketing copy in your pieces, and we are not discounting that. You have to understand that your materials’ customization will go a long way toward differentiating you from your competition and winning more business. For example, if you serve multiple industries or niches, you may want to tailor your capabilities statement for each one. When you respond to an RFP, you will want to tailor the language in your RFP response so that those on source selection feel that you are responding directly to their requirements. Key point – whenever possible, tailor for each prospect or partner. It takes time but exponentially increases your chances for success.

4. By Product or Service: One of the most common ways to differentiate is by-product or service. This is a little more self-explanatory, but companies still miss out on a huge opportunity to improve how they do it. When you are looking at your products or services, there are several factors to consider. When thinking about product differentiators, consider the following: quality, pricing, functional features, design, availability, and the knowledge/education level of the buyer on the product. When thinking of service differentiators, consider these: Speed, lower risk, more robust processes, differences in project/program management methodology, past performance, level of understanding of the customer’s processes and systems, geographic location, and reputation. These are just some of the factors you need to consider when thinking about product and service differentiation. Even more important, none of the differentiator types we just listed are any good without using quantifiable and qualifiable metrics. It would help if you had percentages, dollar amounts, savings, opportunity cost, etc.

If you are responding to an RFP, you should determine which of these factors are most important to the customer and then customize your response to highlight the areas you are most qualified in. Ideally, you want to do your best to collect as much intelligence as possible on an opportunity before the RFP or RFQ is released. It’s a good idea to ask the contracting officer questions (better yet, talk to the program manager) about these factors to get a clearer picture of their priorities. Depending on the uniqueness of your product or service, you may even be able to ghost your unique capabilities into an RFP. This only happens when you communicate with potential clients well before, and RFP or RFQ hits the street and can only be done with proper communication, planning, and capture management. Engaging opportunities in pre-acquisition, before the RFP is released, is a key to winning more contracts.

5. Through Teaming: It’s our personal belief that teaming can be one of your greatest weapons in government contracting when done correctly. Teaming has many different layers, but the most common are teaming to win a contract. Getting on a team is not an important piece. What’s critical is how you position to get on the team and subsequently position during source selection and after the contract or task order is awarded. What good is it if you get on a winning team but don’t make any money? This often happens, especially with smaller companies. Your objective is to find the prime that is the best fit for your capabilities and has the best chance of winning the contract. This requires a little research on your part, and there are many government tools you can use to find out who is interested in the deals you are interested in and the past performance of the primes so that you can determine the best fit.

Here are just a few questions you will want to ask before approaching a company you want to team with.

  • Do we already have a relationship with one of the interested companies?
  • Do the interested companies already have a partner that does what we do?
  • Do we have actionable intelligence on this opportunity that no one else has?
  • Why would a prime want to work with us over another company?
  • Does our company do something so unique that we would be an asset to any of the primes?
  • Are any of the primes in our geographic location and for this contract, and does that matter?
  • All of these questions revolve around one simple question you must answer for every company you attempt to team with: “How do we make the prime more competitive?” Because that’s why they will put you on the team.

One massive benefit to teaming is that teaming with another company gives you third-party credibility. This is especially true when the prime is a big defense contractor or a company that is well known in the market. Once you engage a prime and get on their team, it’s to your benefit to work as hard as possible and devote all necessary resources to the RFP process. This not only wins the favor of the prime, but it also gives you leverage to talk to them about other opportunities they may have in their pipeline. Strong teaming relationships will increase your pipeline drastically over time as you continue to contribute and add value to the team. In the beginning, it may be you bringing opportunities to the prime, but as you prove yourself, they will start to bring opportunities to you.

Summary: Learning how to differentiate and make it a core component of everything you do is critical to your government contracting success (and commercial sales). The government faces thousands upon thousands of inquiries every year from companies wanting their business. Your job is to do everything you can to stand out as the right and best choice for the government every time. One way you do this is by being very selective of the prospects you approach, how you approach them, and customizing your message to fit their needs best. Follow these five steps, and you will improve the quality of your communication, differentiate yourself in the market, and accelerate revenue.

Michael LeJeune is a Partner and Federal Access Program Manager at RSM Federal. RSM Federal has helped its clients with over $1.5 Billion in government contracts since 2011. RSM Federal is a coaching and consulting firm that specializes in accelerating sales for government contractors.

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