The Business-to-Government Breakdown

Business-to-government marketing, commonly abbreviated to B2G, is the process of private sector organisations marketing their products towards federal, state or local government bodies.

B2G can best be understood as a subset of the traditional definition of marketing activities as being either business-to-business (B2B) or business-to-consumer (B2C). Whilst there are significant similarities between B2B and B2G, it is important to approach the public sector for what it is – a quite different sphere of activity, with different ways of doing things and different ways of thinking.


What does B2G mean to me?

Business-to-government commerce is an enormously important area, and one which is typically overlooked by the vast majority of businesses. Whatever you do, whatever you sell, the chances are that there is a government manager somewhere in Australia who wants to buy your product or take up your service.

Just think of the vast array of government departments – from tiny regional shires to massive inner-city councils, from outback distance schools to immense universities, from parks and wildlife authorities to high-tech communications departments and financial management institutions, and from isolated nursing outposts to huge metropolitan hospitals. Whether you’re selling computers, hotel rooms, bulldozers, environmental audits or even dog food! (think police, customs, etc) – the government can and will buy it.

The sheer size of the government market can be hard to get your head around sometimes. The federal government alone spends $350 billion every year. Consider the size of this market if you also include all state governments, local governments, public and private hospitals, nursing homes, schools, TAFEs, universities, etcetera – suddenly it becomes clear that the public sector should be much, much more than just an afterthought when it comes time to draw up your marketing plan. There is a world of opportunity in the public sector – are you taking advantage of it?

How does B2G work?

The Australian Government works under the policy of providing all suppliers with an opportunity to make an offering that fulfils the agency’s need.  The most common way used by government agencies to make their supplier selection is through a public tender process.  Government agencies that require a specific product or service delivered invite potential suppliers to participate in the procurement process. Agencies are free to decide what kind of process they want to follow which usually includes soliciting business proposals, information and quotations (RFQ, RFI, RFP, etc.).  Agencies can also choose to use more flexible procurement processes such as using preferred supplier lists, direct sourcing or limiting the invitations to tender.

Doing business with government can be a complicated endeavor. In Australia, relationships between government and business haven’t been given the care and attention that we have seen in other countries. In particular, the potential of emerging technologies to change the way B2G occurs has not yet been fully realised.

The federal government has made available a number of websites that are focused on the purchasing needs of different government agencies. The Department of Finance and Deregulation has a procurement section in which contains guidelines and policies for doing business with the public sector. AusTENDER, the Australian Government’s procurement information system, is an online portal that publishes available business opportunities with federal government agencies and allows businesses to submit their proposals trough that system and to follow up on the status of each tender.

With a similar approach, states and territories across the country have launched individual tenders and purchasing websites publishing business opportunities in state government agencies. Procurement processes are mostly performed through these online platforms. The Northern Territory modernisation of the government tender system has even introduced a new App that facilitates the process for suppliers. However, there is a lot that can be done to improve the communication with public sector organisations and build stronger relationships.

What these government agencies are looking for in your business submission is a combination of a good pricing offer that is able to meet their requirements. The decision is based on a cost-benefit evaluation, in other words: Value for Money. Thus, the government market is highly competitive and maintaining a close relationship with potential customers in these segments is key to successfully marketing your products and services.

But, what about local government? Unfortunately the interaction with local government, particularly in regional areas is very limited and you could be missing out on some great opportunities to sell your products to over 600 local councils. They may be needing your services but they simply don’t know that you are out there!

Promoting your business is the first step to start communicating with government agencies. A-ZGovBIZ can provide you the contacts that you need to start building a relationship with these potential customers.

Michael Bleakley is a journalist, communicator and marketing professional of 25 years. His career began in his early 20’s publishing tech magazines for education. Michael’s career then moved into online and book publishing for a global business publisher, then finally into database publishing and marketing at A-ZGovBIZ.

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