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CDW Cracks the Federal Code
May 1, 2005 12:00 PM , BY BETH NEGUS VIVEIROS
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If you're moving into the government market, be sure your representatives understand their audience.

“If you've got the Pentagon's [office of the CIO] on the phone, they don't want to talk to a telesales rep,” said Jim Garlow, director of advertising for IT products marketer CDW. “They want an account manager who understands the business.”

Vernon Hills, IL-based CDW's government marketing subsidiary CDW-G accounts for $1.5 billion of the firm's $6 billion in annual sales. The market — which will spend $65 billion on IT products in 2005 — represents a huge opportunity for the company, Garlow said.

The government market is steady, but it does have its challenges, he noted. Three-dimensional mailings go under great scrutiny to get past the front door, and if cornstarch is used in catalog mailings, mailrooms get worried about anthrax.

CDW-G was formed in 1998. The venture didn't succeed at first, mainly because the firm just tried mailing its regular catalog into government offices. When it started focusing on specific segments of education, state and local governments and the federal government, the business took off.

Overall, CDW circulates between 40 million to 50 million catalogs annually, with about 15% of that going to state and federal sectors. Part of the circulation includes magalogs, each offering catalog content and four or five articles targeting a particular government sector's audience. Features might include a look at how the Defense Department upgrades laptops at several sites, or how a college installed a wireless network. Such customization helps CDW stand out and not seem like a generic vendor in the sea of computer catalogs flooding the typical IT manager's office, said Garlow. “The important thing is that they keep it on their desks.”

The company also publishes two magazines, CDW-G FedTech and CDW-G StateTech. Each has a 100,000-copy circ and targets IT purchasers. The magazines are 70% editorial, and feature guest writers such as the CIOs from the Environmental Protection Agency and the General Services Administration.

Nothing involved in doing business with the government is radically different from general business-to-business marketing, but DMers have to understand the nuances, said Mark Amtower of Amtower & Co., a federal marketing consultancy.

There are 80,000 government sectors in the United States, and more than 20 million government employees. Government spending represents 25% of the gross national product, he said.

“The government market is huge,” he said. “If you don't segment properly, your prospecting will lead to nothing.”

Amtower noted that it's key to understand what motivates public servants. Most take great pride in their work and feel their market is unique. They want to be treated intelligently and don't want to be made fun of, he said. “Jokes don't work.”

The end of the fiscal year — Sept. 30 for federal and June 30 for many local municipalities — is the busiest time for buying, he noted. House files of government buyers should be mailed to at least four times between June and October.

Garlow and Amtower spoke at the Chicago Association of Direct Marketing's annual DM Days last month.



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