To say that 2022 has been a tumultuous year is an understatement. With the war in Ukraine, inflation, rising interest rates, threats from China, the COVID-19 pandemic, and supply chain disruptions, marketers have never had to work harder. This global backdrop has shifted priorities, changed economic tides, and altered the state of the workforce. In response to these challenges, GovExec CEO, Tim Hartman; GovExec CRO, Constance Sayers; and TD SYNNEX Public Sector Vice President of Marketing, Tom Mahoney joined The GAIN Conference on October 18th to discuss how these trends will drive the year ahead, and what marketers can do to adjust. Let’s dive in.
Trend 1 - Economic Uncertainty and Its Impact on the Public Sector
In crises, people rely on the government to solve problems. Government spending increases during turbulent times, as evidenced throughout the COVID-19 pandemic and the war in Ukraine. The caveat is that there have never been so many commercial issues impacting vendors, like interest rates and their influence on funding in Silicon Valley. When Silicon Valley has trouble raising money, it has repercussions on how they invest in the public sector. For example, the Defense sector is affected by supply chain issues like technology, weapons, and systems. Each market, (Defense, Federal, and State and Local) has seen significant growth in spending, but buying is nuanced, and the vendor marketplace is affected by these trends.
There is concrete data that shows the pain in these markets. GovTribe, a platform that conducts analysis on the industrial base serving the government, reported that in 2022, the number of vendors entering this market increased by 20%, but there was an 11% decrease in companies winning awards. This means that being first at the table is critical. The market is being squeezed with more money and less awards. The top line number is increasing, but where they spend is changing. These dynamics will impact how companies operate in 2023.
Larger incumbents will likely not feel these issues; they’ve built the trust and long-standing relationships with their buyers. Smaller or newer organizations should look to partner in order to be successful in the current state of this market. We are returning to the days of spending marketing capital on arguing that there is stability in the public sector in order to keep the dollars from shifting into commercial business.
Trend 2 - Navigating Government Workforce Challenges
There was already trouble in Federal and State and Local government with attracting and retaining talent, then COVID-19 was added into the mix. The Partnership for Public Service reported that in 2021, on average, the public sector was 15% behind the private sector in terms of employee engagement. Now, on top of the usual retirement drain, people are not entering the field to fill the jobs. When the Federal and State and Local markets are struggling to find workers for open positions, there is a ripple effect on the completion of government programs.
This is called a Quitters Market. Many factors contribute to voluntary turnover, like the ongoing pandemic, vaccine mandates, and a strong candidate’s market. According to the US Bureau of Labor Statistics, the last 10 months of 2021 showed the largest exodus of employees on record. This affects who you market to and work with. Mahoney describes this as “musical chairs” because of the constantly changing workforce. People you once worked with and had an established trust may not be in the same agency, or even in the public sector, because of turnover issues.
There is a narrow window for educating customers and it won't be as direct of a sales process as you expect. Your sales representatives are essentially trying to hit a moving target. This puts pressure on sales and marketing to push out consistent reeducation and brand awareness as members of government move in and out of positions.
“But the music is slowing,” said Mahoney, “and in some sectors the music has stopped.” Companies are beginning to draw back from posting and in some cases are putting a freeze on new positions. There appears to be a return to stability which is good news for your company’s ability to establish relationships.
However, even when it becomes stable, this turnover has massive implications for data management and how clean your data is, which brings us to the next trend.
Trend 3 - Your Data Strategy Has Never Been More Important
Overall, the consistency and quality of data is decreasing. When you have the turnover that is happening in the government space, it directly affects data and magnifies this problem. People who you thought were in one agency have changed jobs, but you could still be marketing to them as if they were still employed with their prior agency. Turnover has never been so high, which means traditional data quality isn’t as reliable as it once was. Fortunately, there are tools that can help you clean and validate data and make sure your ABM is on point.
Regulations and compliance are also affecting data, and in some cases it is only 30-40% accurate. At that rate, the data you’ve been collecting may be worthless and could be mudding your CRM.
Marketers will need to work on data cleanliness now more than ever before, investing in, and seeking, accuracy. This approach demands a new level of operational sophistication which goes beyond traditional tactics like establishing thought leadership, flooding the market with content, or hiring representatives that had the best rolodex. Good data anchors your company in a solid, coherent strategy, which GovExec has recognized in its data acquisitions. Marketers need to be in the driver’s seat with total addressable marketing data, which goes beyond contact data. This shows you specifically where to deploy your sales teams because you cannot target everywhere at once.
Only GovExec has the end-to-end next generation of lead intelligence. One of the latest offerings for account-based-marketing, GovSelect, identifies and targets your highest value accounts with a multi-channel digital campaign using first-party data. Through lead nurturing and scoring, you can keep your leads warm and collect incremental data. These campaigns provide consistent exposure to your brands’ products and offerings.
Now with Annual Lead Subscriptions, you can generate a consistent pipeline with monthly lead guarantees at our best market rates. Turn leads into potential customers in real time with GovExec’s Appointment Setting service, which provides your sales team more time and insight to convert qualified leads, build relationships, and increase ROI.
Trend 4 - Leading with Data-Driven Content
Consumer insight in the public sector is more of a puzzle than a mystery. With a puzzle, the pieces are all there and it’s up to you to put them together. A mystery is when the solution is withheld from you. Everything is there for you to solve, you just have to find it, which is where data comes in.
The public sector is reactive, with a habitual and triggered response (or, “the gator,” as Dr. Zoe Chance shared at GAIN and in her book, Influence is Your Superpower). In direct-to-consumer marketing, consumer behavior is studied. It’s difficult to gain insight into what motivates the person to go from passive observer to active and engaged buyer. That is true in the public sector as well, but with one big advantage. What motivates them, turning them into buyers of solutions, are their pain points, which are written into legislation, regulation, and compliance. You don’t have to guess. You can inform your content based on these pain points to make it as easy as possible for them to say yes.
Data-driven content dives into market research and intelligence to understand agency missions, funding, past purchases, award history, and more, to create themes that resonate with buyers. This intelligence is out there and ready for marketers to use in their content strategy structuring. But how do you make sense of all the data that is out there? There are more tools evolving around specific niches, like the ones GovExec is investing in, that can glean these insights before they are put into formal processing so that you can do more with less.
With Content Strategy Services utilizing data-backed insights from GovExec’s intelligence platforms and our team’s market expertise across Federal, State and Local, and Defense sectors, GovExec will collaborate with you to build or enhance your content strategy to meet your 2023 marketing goals. Additionally, Studio 2G’s Social Accelerator offers a consultancy membership granting you direct access to certified consultants and premium rates on our expanded social suite. It is designed to enhance engagement and improve social outcomes through lift and market share. Everything you need for your data-driven marketing strategy is at your fingertips.
Trend 5 - The Shifting Battlefield
The Defense sector is in a unique spending atmosphere these days. With the bipartisan support of aiding Ukraine in its war with Russia, the pressure is taken off DoD’s core budget. Initiatives are less restricted and can now funnel into sustainment for Ukraine. If you’re a tech company, or company in the Defense sector, there are a plethora of opportunities with $16 billion flowing through the US Defense industrial base. GovTribe tracks the National Interest Action (NIA) Code for Ukraine and has seen 213 million tags to that code primarily through acquisitions of technology companies. With this NIA Code data, you can see opportunities and growth areas in the defense landscape, like cloud computing and geospatial data, in addition to machinery.
There is also a huge opportunity in Cybersecurity right now. Not only are zero trust and identity management actively in play, but cybersecurity is now a national security issue with the war in Ukraine, and it is one of the most robust opportunities in this space. On February 26th, just as the war in Ukraine was starting, there were 104,000 cyberattacks targeting .edu and .ua (European educational institutions) on that day alone. There is growing complexity in this space, which means growing spending. Warfighters exist in multiple theaters now. They are on the ground AND behind the keyboard. Cybersecurity is ammunition that doesn’t need to be replenished. Things like zero trust are more than just buzzwords; they’re solutions for protection.
Not only will machinery sent to Ukraine need to be replenished, but the US military think tanks and leadership are watching the war to see what does and doesn’t work. Ukraine is acting as a model for future defense initiatives. Real life scenarios are playing out in a war that is testing things like autonomous vehicles, C4ISR, and command and control systems. Based on their success in this war, these areas are where investments will be made. If your company is in tech or defense, you should be partnering with GovExec’s solutions, like Defense One, Military Periscope, Forecast International, GovTribe, and Defense Systems who have their fingers on the pulse of the war in Ukraine, threats from China, the state of the US military, and beyond. Staying on top of these key takeaways will structure your focus and strategy for success.
Trend 6 - An Influx of Federal Spending
There has never been this much spending across every single market. Of the $1.2 trillion in IIJA money, $550 billion is net-new money. Even before the injection of this historic funding, the Federal government was the largest consumer of IT solutions, and SLED was the second largest. State and Local markets have a once-in-a-lifetime opportunity happening right now. There is guaranteed spending in infrastructure, transportation, and broadband. If you needed a reason to be in the State and Local market, this is it.
If you’re breaking into State and Local, or you want to capitalize on the massive influx of opportunity, you can’t go everywhere, so where do you focus? Data can help you decide where your priorities should be. Because 90% of State and Local sales go to the first company at the table, your company needs to get in the door as agencies are identifying pain points through targeted intent signals for your solutions. With GovExec’s SLG Membership, utilizing the power of The Atlas MarketEdge, you can get predictive and pre-RFP data to put your company at the forefront of solutions before your competitors know the opportunities even exist.
Trend 7 - The Evolving Events Space
In early 2022, companies were taking the wait-and-see approach when it came to events. Many adopted the hybrid strategy, which added some costs and pressure for the events staff. In the latter part of 2022, events have come back in a big way. For example, 35,000 people attended AUSA.
Conducted in September 2022 by Market Connections, the Federal IT Omnibus study (poll of IT SMEs designed to gauge primary public sector sentiments across Federal IT areas) showed insight around event attendance. Of those surveyed, 71% attended an event in the past three months, and 79% plan to attend in the next three months. When looking at factors that are driving people back to in-person attendance, 65% said networking with members of industry, 63% said networking with other members of government, and 57% said on-site training and demos.
In a virtual environment, people weren't getting hands-on training, demos, and shaking hands with colleagues, and it’s clear that the desire to return is there. However, simply returning to events as they were pre-pandemic is not enough. The days of someone going to an event every day are gone. Meaningful networking will drive attendance. Valued aspects like demos and training should be actionable. Remember, though, because of the evolving landscape, you need to have a backup plan. Hybrid events are now the best strategy to remove risk. Hybrid is not a virtual-first option, but a failsafe to serve people where they want to be.
In response to the renewed interest in events, GovExec has developed B2G Forums for you to network with purpose. You can own your own conversation by selecting a trending topic to showcase your expertise and unique brand value. Share the stage with government leadership for a GovExec crafted timely and informative discussion. Enhance a custom, but turnkey experience by allowing GovExec to do the heavy lifting so you can prioritize your goals of the event. Network with purpose as attending an event indicates real intent, so leverage the engaged audience through demos and in-person training.
Additionally, with GovExec’s new 2023 GovExec TV Dispatch program, you can capture new business as you travel across the nation. Differentiate your trade show presence and drive meaningful, face-to-face interactions with key leaders. GovExec will produce a unique television-style video episode to be recorded at the tradeshow of your choice. The experience offers networking opportunities, dynamic thought-leadership discussions with government participants, and enhanced, high-quality TV broadcast production.
Looking Beyond 2023
Through two years of acquisitions, GovExec has built the most powerful Sales and Marketing Intelligence tool to partner with the government, which has never been more essential. Winning the public sector is complex. With the differentiation between markets, a fragmented and hard-to-reach audience, a massive opportunistic market of non-RFP purchases, and RFPs that favor legacy vendors and require pre-issue sales and marketing activity, you may be wondering if it’s worth the trouble. In short, yes, because the public sector is continuing to grow. Only GovExec has the most powerful go-to-market platform in government with pre-RFP intent data, RFP data, contact data, insights, brands, and decision influence across the Federal, State and Local, and Defense markets. Find out how you can get ahead in 2023 and beyond. Contact GovExec at Solutions@govexec.com.