As part of the Blockathon event, of which you can read more here, we had a fireside chat with Daniel Homorodean (CEO of Arxia, founder of the startup Process Player and vice-president at Cluj IT Cluster), focusing on how to to sale digital products and services to the public sector ( public institutions, including municipalities, ministries, universities, etc). Daniel is also coordinating the “Electronic invoicing” workgroup of the National Council for Digital Transformation of the Authority for the Digitalization of Romania (ADR) and is involved in the development of technical standards for e-administration, at national and European level.

Process Player is a product that helps public authorities manage the public procurement processes. While promoting it, Daniel and his team have engaged with 1000+ authorities from Romania, thus he was the perfect guest for this fireside chat.

The main takeaways about the sales process were the following. We refer to the Romanian public sector and use cases, but potentially the same principles can be applied for other countries also.

Takeaway 1: understand the regulations and legislation

When talking about the process of sales and communication with public institutions, it’s essential to know that in the public sector the acquisition mechanism is highly regulated by the legislation. For this reason, anybody who wants to sell in this sector should have a basic knowledge about these rules and regulations.

Everything happens based on a strict procedure, which has to be adequately documented, it has to be characterized by transparency and as much as possible it has to be competitive and open, in order to not  cause doubts and suspicions from the acquirer’s part. 

Takeaway 2: reactive sales vs proactive sales

There are two ways of selling and doing business in the public sphere: the reactive and the active way.

The reactive selling is the one through which the seller firstly has to follow and understand the published needs of the institutions through the national public procurement system. Once the opportunity is identified, the company prepares and submits an offer, which gets evaluated. This is called the competitive public procurement procedure, a process which is usually quite complicated, there can be strong competition and it takes considerable time. 

The active selling, which implies the development of a high understanding of the buyer’s profile, the advantages that your solution or service brings and the competitive value that you can offer. This preparation and engagement mostly happens through communication – participation at conferences, holding free training, organizing workshops, and involves an active effort of trying to understand the way in which an institution copes with problems.

Takeaway 3: reasons for acquisition

In the public sector the decision making is not based on the economic effect of the acquisition, but more on the possible future influence of the purchased goods, like reducing different kinds of risks and strengthening the security and comfort of the stakeholders. Furthermore, the public perception of the impact of the acquired goods and the satisfaction of the citizens can be an important factor in making a decision. 

Takeaway 4: don’t sell, but discuss openly

Getting into contact with a representative of a public institution is less effectively done by a direct approach on LinkedIn or email, but can better be done through natural networking during events, such as conferences and workshops. Moreover, we should not employ a commercial “sales speech” to a person working in the public sector. A proposal for an open discussion related to the problem that you are solving is always better received; you should look for creating a dialog, making sure that you understand first the motivations of the person that you talk to. 

Creating free webinars, workshops, training sessions in the domains that your solutions help can lead to developing the competitive advantage. By organizing these events, you get the possibility to interact with people working in the public sector, you have the chance not only to promote your product, services, but also to listen to their needs, problems. This is a less intrusive, but direct way to get in touch with the right people. 

Takeaway 5: concerns on the impact of the status-quo 

When it comes to the openness of the people from the public sector toward digitalization, it can be said that they are not that much interested in the technical aspects of your solution, but more in the impact of the digitalization; like for example a higher comfort not only for the institution, but also to the citizen, lower risk and better operation management.

Takeaway 6: long-term sales cycles

In the public sector the process of acquisition follows a long-term cycle. The decisions are not taken by a single person, but several ones. All stakeholders have to be on board with the decisions regarding an acquisition, especially when it comes to a software system, because this brings in an inevitable change in the flow of the activities, a change which is always received with suspicions or reluctance by some stakeholders. This is mostly valid in case of selling complex software products.

Selling services to the public institutions, such as consultancy, training, or even software development, can be easier and a lot faster. 

Takeaway 7: political waves are influencing purchase

Political events like elections highly affect the acquisitions and the openness of the buyers. The period after the change of the top management could be a good moment to approach an institution, as they might be more eager to change and improve their activity, or to send a positive message to the public. Sometimes, the changing of key people in the management of the institution can also put a break in the implementation of planned digital projects or even in abandoning them.

Takeaway 8: customer relationship

Keeping in touch with the clients is essential not only in the private sector, but also in the public one too. Selling a product which is expected to be used continuously will automatically imply a need for support. The private client expects this also, but the public client will often ask for this support relationship. Maintaining the proactive support service is essential for the continuity of the relationship.

That being said the sales in the public sector have their own hurdles, but it also offers tremendous opportunities and its impact can be significant: every citizen is served and supported by various public institutions, their optimization and digitalization is definitely required and there is a lot of room for new solutions and services coming from the IT sector and from the tech startups.