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Diversify Your B2G Revenue Generation to Counter Sequestration

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Posted by John Beveridge on Sep 4, 2012 7:09:00 AM

inbound marketing for government contractorsRegardless of the outcome of the upcoming elections, government contractors can count on one thing:  a challenging environment for B2G revenue generation.  A recent article in Washington Technology projected that the overall civilian budget will be cut by $39 billion in 2013 if sequestration takes effect on January 3d.  The Professional Services Council, a government contractor industry group, predicts a 7.8% cut for the civilian budget and a 7.7% cut for the defense budget under sequestration.  It's clear that revenue generation won't be getting any easier over the next few years.

Even if sequestration is averted, the budget environment will make B2G revenue generation difficult.  Both Republicans and Democrats face pressure from their constituencies to cut the budget.  The question is not whether the budget will be cut, but how and where it will be cut.  Accordingly, most government contractors are facing difficult challenges to sustain growth.  Some are realizing that times of turmoil can be times of opportunity and are devising nimble strategies to thrive in the changing environment.  Many consider two primary strategies to thrive in the era of sequestration and budget cuts:

  • Become more efficient in your B2G revenue generation and diversify into commercial markets,or
  • Manage your business to maximize the value in a merger or acquisition

Inbound marketing is a tactic that government contractors are using in both of the marketing strategies described above.  Inbound marketing is an integrated process that uses blogging, social media and search engine optimization to sell and increases your brand awareness.  Market Connections 2012 Federal Media and Marketing Study showed that government purchasing officials are increasingly turning to blogs, social media and search engine queries to help them with their purchasing decisions.  For example, LinkedIn usage by purchasing officials doubled from 2011 to 2012. 

We can expect the trend to continue as government purchasing comes under increasing scrutiny due to political pressures.  Government contractors optimizing their B2G revenue generation use inbound marketing to expand business opportunities in new agencies and to increase brand awareness.

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Government contractors that have viable applications for the commercial sector are stepping up efforts to diversify their revenue.  Inbound marketing is a proven tactic for B2B lead generation because it mirrors how people and companies buy today.  A 2011 survey by the DAC group concluded that 71% of B2B purchasing decisions originate with a search engine query.  If you're looking to diversify into the commercial sector, inbound marketing should be part of your marketing strategy. 

An effective inbound marketing channel supports a company's efforts to attract investment or sell itself.  Buyers and investors are using the web to research opportunities the same way corporate buyers are.  If private equity and venture capital firms are finding you on the web or social media, you have the opportunity to start conversations with buyers and investors that you may not have had before.  It's up to you to close the deal, but inbound marketing will open doors for you.

Another benefit of inbound marketing for government contractors is the positive impact on your valuation when you start negotiating your transaction.  Investors want to see that you have a long-term revenue generation strategy in place - if you can show them an effective inbound revenue generation channel, it demonstrates that you have the platform to grow in challenging economic times. 

In conclusion, diversifying your revenue generation is an essential element of a strategy for a government contractor to thrive under the threat of sequestration.  Inbound marketing is an ROI-proven tactic for revenue generation and will help you, whether your ultimate goal is to grow or sell your company.  There are affordable programs and tools designed to manage inbound marketing programs for small and mid-sized businesses.  My recommendation is to see how inbound marketing can help your revenue generation efforts.

Download Closing the Loop: The Ultimate Guide to Integrating Inbound Marketing Into Your Sales Process

Topics: Government Contractors

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