Institutional Markets How To Promote Your Products & Services To Them?
Institutions, such as government funded agencies and authorities
, form a significant part of the economy. During the current economic meltdown and subsequent recession, as most private businesses are faltering and cutting back on their spending, public institutions seem to be keeping the economy going, particularly with the new stimulus funds in most countries. Even if institutions are not immune to the effects of recession, institutions are a great deal more resistant.The institutional market comprises of public bodies and agencies, such as schools, hospitals, public service building and other non-profit bodies that don't aim to make money, but provide certain services to the community. Therefore, recession or no recession, public bodies have to function nonetheless and keep the country going. For this reason, you should think about shifting your marketing endeavors to institutional markets in the current economic recession.
Here are some other advantages of targeting institutional markets and some tips to do it efficiently.
Benefit from Others Mistakes
Particularly in the current economy, institutional markets are a rapidly growing part of the economy and are growing with a much faster pace than businesses. No wonder institutions attracts marketers from far and wide. However, one of the common mistakes that businesses make is that they often try to market their products/services to institutions in the same way they market to other businesses. And this is exactly where they fail to appeal to institutions. These marketers miss a huge opportunity! Institutions are often public agencies and have a lot of specific needs and requirements that must be met before they can buy products or services, such as public procurement law requirements.
Spend some quality time researching about the particular institution you want to target and analyze their specific needs and requirements. This will give you a direction to customize your marketing strategy to the institution, and increase the chances of striking a deal. Also find out how the institution is allowed to procure products and services from its suppliers.
Institutes are Ideal Customers
In terms of B2B marketing, an ideal customer is defined as one that is growing in the industry, is stable, has a recession-resistant profile, is predominantly large in the industry and has no credit risk. Institutions conform to all these parameters and thus are the best place to market your products and services. Right now, many institutions have extra public funding from stimulus funds and are very unlikely to go out of business or fail to pay you for products or services that you have delivered.
Understand their Characteristics
It is important to understand that institutions are different than businesses. Institutions don't have a sales department that can bargain and quote prices. Unlike profit-driven businesses, these bodies are purpose-driven. They get their money from government and contributions and seek to spend their money for the best of the community. Usually all of the purchasing decisions are made by purchasing agents who have to follow public procurement requirements, and not by top-level management who have no such procurement requirements.
Create a Definitive Marketing Strategy
The marketing strategy for institutions is ordinarily influenced by the purchase size and fiscal year. The spending cycle is often influenced by the funding cycle. Small purchases can be done all the time but when it comes to larger purchases, time is a critical concern to consider. Larger purchases generally require their own line items in their budgets. Due to this, the budget and vendor costs need to be determined at the start of the fiscal year itself. Thus, a purchase order will be issued only when the funds are available (i.e. after the new fiscal year starts). So, the last quarter of the fiscal year is especially critical for small purchases.
Everyone knows that the institutional market has immense potential, but what is more important is to observe its basic nuances against private businesses and gain an understanding of its needs and requirements so that you can formulate an effective marketing strategy.
Disclaimer : Sabra Easterday is the owner and founder of MatchB2B. Sabra is also a lawyer with a special interest in business issues and e-marketplaces. Notwithstanding that Sabra Easterday is a lawyer, nothing in this article and no services of MatchB2B or its website are legal services and no attorney-client relationship exists between any reader of this article or user, customer or potential customer of MatchB2B, and MatchB2B, its website or Sabra Easterday.
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