Get To Know Your Customer

April 13, 2006

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If you are serious about being a subcontractor and selling your company's products or services to a prime, you'll need to know that customer--the prime.

When we say, "get to know your customer," we mean that you need to learn everything you can about each prime that might offer some opportunity for you, including how it does business, what it needs, and what it doesn't need.

What does the prospective prime sell or produce? What product or service does it provide to its customers? What does the prime make in-house? What does it outsource? What products or services does it need to fulfill its manufacturing needs? And what's important to this particular prime? What are its hot buttons? Fast service? Quality parts? What does it need?

Identify your customers' needs and requirements and you'll always have work!

Work Smart

If you offer generic types of products--products that are used by almost every business no matter what product they manufacture or service they provide (for example, office supplies, janitorial services, or other products of a non-technical, consumer-like nature)--you don't need an intimate knowledge of a prime's products or services. But you do need to know how they buy the type of services that you can provide. Do they use corporate-wide contracts or can each location buy on its own?

As important as it is to know what each prospective prime needs, it is equally important to know what it doesn't need. For instance, you might have to look not only at what the prime buys, but also in what quantity.

Knowing the quantities of items can help you evaluate whether a prospective prime presents a good opportunity for your business. For example, if you need to sell 10,000 widgets per year to be profitable and a particular prime buys only 300 to 1,000 of that item over a year's time, you may want to re-evaluate whether you want to spend your time and effort trying to sell to a prime that buys such low quantities. In that case, the prime's needs and your needs may not be the good match you thought it was. And it is best to know this information before you walk in the door, so you don't waste precious time--both yours and the prime's. Remember, the average sales call costs your company about $250, so use your time wisely. Ask better questions!

In general, small businesses that need long production-run items (usually in the tens or hundreds of thousands) and are looking in the government arena might be disappointed. The government and government primes usually need what some small businesses would consider short-run production (at the max, at the thousands level). There may be higher volume in certain products, such as ammunition, that are used up or worn out rapidly, but for the most part, it's going to be a low volume situation.

Where can you find this information? You can find much of it by doing research from the comfort of your own desk. Many, if not all, of the large prime businesses have web sites that should provide most of the information you need. The business section of your local newspaper or current or back issues of the Wall Street Journal may be of help. The Business Section of your local library could offer other helpful materials. A commercial web site that you may want to check out is www.govexec.com, which covers the federal government and usually has informative articles. It also publishes special editions on the top 100 or 200 federal contractors and on the IT business world.

Work Smart

A quick trip to your local PTAC (Procurement Technical Assistance Center) can also help you get information about the large government prime contractors in your area. PTACs participate regularly in meetings and conferences with large primes, both on a regional and national basis, to discuss contracting and government issues. Therefore, your PTAC is in a good position to help you make contact with the large primes in your area. It can tell you who the large primes in your area are, can advise you on which contractors might offer the best opportunity for your particular capability and what the issues might be, and can keep you informed about opportunities to present your capabilities to the group or attend a matchmaker conference.

As a matter of fact, a trip to your local PTAC can help jump-start the subcontracting (or contracting) process for you at any stage and for free.

Since part of their job is to provide information to prospective small business subcontractors, you can also make a preliminary fact-finding call to the small business liaison or representative or the purchasing office of each prime you are interested in. Ask about their needs, the type of subcontractor they are looking for, the procedure required to become one of their subs, and the average size of an order.

Work Smart

Recently we had the good fortune of hearing a speaker at a government business conference who would be an inspiration to any small business working hard to succeed. She started as the sole employee/owner of a minority woman-owned business that today is doing millions of dollars in business with a prime contractor. What are the secrets to her success?

She came back to the same two "secrets" again and again: (1) She spent a great deal of time and effort identifying exactly what her targeted customer's needs and requirements were, and (2) she then set up her business to meet those needs and requirements to the letter.

She didn't try to get the prime to lower its expectations, or just give her a chance, or change the way it worked, or accommodate her on any level. Instead, she adapted to the prime's requirements and way of doing business. She got in step with the prime, instead of expecting or wishing that the prime would get in step with her. She didn't look for or take any shortcuts. She found out what was needed and simply did the work to make it happen.

If you want to be successful, you can't take any short cuts either. You have to do the work. You have to find out what they need and how they want it and then give it to them.