4 Tips to Help B-to-B Marketers Capitalize on the American Recovery and Reinvestment Act

Institutions are safe havens in today's economic climate for B-to-B marketers. Some of the largest institutions in the U.S. include local governments, schools and health care systems. Although they aren't immune to recessions, they're more resistant than commercial business customers.

While businesses lose customers, institutions must continue to serve full populations. Schools must be open for students; hospitals and nursing homes must serve their patients; and government agencies must serve their patrons — in even greater quantities when times are tough.

With this in mind, here are four tips to help B-to-B marketers capitalize on the recent passing of the American Recovery and Reinvestment Act (ARRA).

1. The bulk of ARRA stimulus funding will be pushed through institutions.
The federal government is providing hundreds of billions of dollars in stimulus funds for institutions, including local governments, schools and health care systems, to spend with America's businesses. Consider the following:

• There's approximately $300 billion in discretionary funding that'll flow to the local level.
• Administrators will be responsible for determining how to spend the funding most effectively and within the guidelines provided by federal agencies.
• Many of the purchases can be made without going through formal bid/quote processes.

2. The majority of the money will be spent in FY ’10.
President Obama's goal was to get money into the economy quickly. However, tracking requirements, strings attached and transparency mandates have actually slowed its delivery into the economy.

• Schools are hesitant to spend because they don't want to create a funding cliff.
• Each federal agency responsible for disbursing funds must set forth guidance on what the funds can be used for, how long recipients have to obligate the funds, and how spending should be tracked and reported on.
• The exception is $19 billion designated for electronic health records. The Government Accountability Office estimates that spending on this project will continue through 2015.
• Just prior to the end of the fiscal year is prime selling time for B-to-B marketers, as institutions must use all of their budgets or risk losing funding in subsequent years. June 30, Sept. 30 and Dec. 31 are typical institutional fiscal year end dates.

3. The purchasing process at institutions makes it difficult to identify decision makers.
The upside-down nature of decision making at institutions makes life very difficult for marketers. Decision makers with whom marketers want relationships are often hidden behind the formality of institutional finance departments and purchase orders.