Take Advantage Of Government Imaging Opportunities
Information Capture Solutions (ICS) has discovered that diligence in the government market pays off, realizing seven-figure sales and a triple-digit revenue increase.
Selling to the government on any level can often be compared to the dull but persistent throb of a toothache. Red tape, bureaucracy, paperwork — to say the least, it can be a challenge. Information Capture Solutions (ICS) understands these challenges, but the imaging and capture VAR has figured it out, at least at the state level. State government, and DORs (departments of revenue) in particular, account for 53% of the VAR’s annual business. In 2007, targeting state government
began to pay off, catapulting the company to a 107% revenue increase. In fact, ICS has found its sweet spot in state government DORs by pinpointing the paper-rich environment of tax document processing.
Identify Paper-Intensive Government Processes
There is something to be said for the statement, “Stick to what you know.” At the time of ICS’ launch in 2004, president and CEO Brant Poore and VP Raymond Shears had amassed a combined 19 years of experience in the imaging and data capture industry, with much of that being focused on state government. Over the years the pair uncovered a fundamental need common to most government offices — managing and processing massive volumes of paper documents, especially in the tax office.
States deal with much more than just annual individual income tax filings. Add to that corporate income tax, sales and use tax, fiduciary taxes, property taxes, alcohol and tobacco taxes, fuel taxes, and the list goes on. And it’s not just the tax forms that must be addressed. Most forms require multiple supporting documents, such as withholding statements, schedules, expense worksheets, and even checks to pay taxes due. Each return must be manually verified for completeness, ensuring that all necessary documents and pages are included. Once verified, these documents are sorted into multiple stacks or piles depending on factors such as return type, document type, and even year, since it isn’t uncommon to receive returns from past years. Returns that are missing information or required documentation are set aside, usually in stacks that accumulate on someone’s desk, to be processed on a case-by-case basis.
Poore and Shears knew from experience that state governments were actively looking for ways to decrease the burden of manually processing millions of returns. After all, they had been processing these documents in an outsourced service bureau environment for several years prior to launching ICS. In fact, ICS established its own presence in the marketplace by offering those very same service bureau services, earning about $1 million in revenue during its first year of operation in 2005. But the VAR had a broader vision for the future, knowing it could be even more successful if it enabled states to perform these services on their own.
Fill Your Imaging Sales Funnel At Government Trade Shows And Events
Before you rush out hoping to find huge imaging sales, ICS has a word of caution for any VAR wanting to target the government market — be prepared to wait. “The sales cycle for state government is typically between 12 and 24 months from the time you establish your business case to contract delivery,” says Shears. With a cycle that is counted in years rather than months, it is easy to see why it is important to keep your sales funnel full. To accomplish this, ICS stresses the importance of getting in front of potential government prospects as much as possible to build credibility within the market. According to Shears, trade show and conference attendance is essential in this market.
The VAR has dedicated a great deal of time — and capital — to trade show and conference attendance. In 2005, ICS spent around $10,000. That investment topped $90,000 in 2007, and the VAR doesn’t plan to scale back any time soon. “It is hard to stay committed when the budget is tight, and it doesn’t get much tighter than when you are just starting out,” says Shears. “However, failure to stay committed results in an on-again, off-again appearance which will only undermine the primary reason for event participation — name recognition.”
Identifying the right shows and conferences to attend is as important as making the commitment to go in the first place, and the more focused the event, the better. For example, ICS unfailingly attends regional state tax industry shows such as NESTOA (North Eastern States Tax Officials Association), SEATA (South Eastern Association of Tax Administrators), MSATA (Midwestern States Association of Tax Administrators), and WSATA (Western States Association of Tax Administrators).
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What ICS likes about these events, in particular, is their size. The regional associations divide the country’s 50 states into manageable segments of only 12 or 13 each. “It is an intimate group, and you have to think about that,” says Shears. “By attending year after year, you get to know the people in these groups, and that’s a big advantage.” Shears indicates that sometimes being seen on a consistent basis at these events is enough to get your foot in the door.
What do you do once you have found the right events to target? ICS says that the key to a successful trade show is not just to attend and exhibit, but to participate. If gaining visibility is one of your goals, try to sponsor something at the event. For example, the regional tax association events typically have a golf outing. ICS makes the most of this opportunity by golfing in the event — which also generates more personal interaction with prospects — as well as sponsoring a portion of the outing or providing giveaways.
The best way to promote your capabilities as a solutions provider, however, is to gain a speaking engagement at the conference. ICS has done so and found one of the most effective scenarios is to have a customer speak on your behalf. “When these states buy, they become very proud of the solution and like to talk about it,” says Shears. “At a recent FTA [Federation of Tax Administrators] conference, a representative from the state of Minnesota joined a project manager from ICS to give a presentation of a solution we had recently implemented.” According to Shears, the presentation resulted in another two or three states engaging the VAR for business.
Pick Your Path To The Decision Maker
Identifying specific trade shows also helps to shorten the path to the final decision maker. In state government, there are many different levels to navigate, but the final purchasing decision rests in the hands of the state’s department of revenue director. It isn’t uncommon for the director to attend these events, but if ICS can’t get in front of the director at an initial meeting, the goal becomes influencing everyone else along the way. “Your approach depends on who you meet with for the first time,” says Shears. “You can start at the top [with the state commissioner] and work your way down to the DOR director, or you can start in the middle and work your way up. Either way, you’ve got to get the director on board.” According to Shears, key players to look for include IT advisors, since they will readily understand (and get excited about) the potential of technical automation, and department managers, since they work the manual processes on a daily basis and are acutely aware of the cumbersome tasks of mail prep, sorting, verification, and data entry. Gain the favor of these staff members, and you will likely get a shot to at least pitch your idea to the director and possibly generate enough interest to prompt an RFP.
Although it took some time for the government sales to kick in for ICS, the wait was definitely worth it, with the average revenue generated by each sale hovering around the $2 million mark. Now that ICS has a full pipeline of state government clients, the VAR is expanding its expertise beyond traditional imaging and capture solutions. For example, a recent win with the state of Illinois turned the VAR on to Check 21 (see sidebar on the bottom of this page). And ICS isn’t limiting itself to only one department, either. Future targets include other paper-rich environments such as state departments of health and offices of vital records. The government market is obviously ready for document automation, and the revenue-generating opportunities are hot.