Crimestar Sales & Marketing Philosophy

Public Sector

Public agencies generally have strict procurement guidelines which must be followed for all major purchases. This process usually involves producing a Request For Proposal (RFP) which is published or distributed to potential vendors. Vendors are then asked to submit their response to the RFP in the form of a closed bid. The responses are then evaluated for their content and demonstrations of qualified proposals are scheduled. The results of these demonstrations are then evaluated to determine which product is best suited to meet the needs of the organization at the most competitive price.

The intent of this process is to ensure a fair opportunity for all vendors, and to select the best and most cost effective solution to be purchased with public funds.

Some agencies submit a Request For Information (RFI), then schedule demonstrations of products. The information obtained from the RFI process and the demonstrations is then used to create the RFP document. The rational for doing this is to be aware of what the market has to offer and to ensure that the RFP requests or stipulates that certain capabilities must be included in the proposal. Bids are then accepted and subsequent demonstrations may be scheduled before a final selection is made.

Once the demonstrations are completed and a selection is made, contract negotiation begin. Bid bonds and contract performance bonds (insurance) is sometimes required before system installation and testing can begin.

The Realities of Business

What many public sector personnel and agencies don't realize is the business expense associated with this process. Preparing responses to an RFI or RFP takes personnel time and subsequently costs money.  Likewise traveling to an agency to perform one or more demonstrations or benchmark tests can often involve the cost of airline travel, car rental, hotels, meals, equipment shipping and other expenses. The cost of all these marketing and sales expenses must be recovered in the sale of the product.  Understandably, a vendor will not win every competitive bid process they choose to participate in so often the costs associated with several sales attempts must be absorbed by the sale which is successful. The more steps that exist in the selection process, the more money it costs to compete for the business and more expenses that need to be recovered by the vendor in the form of product license and support fees and/or training and installation fees.

Common Misconception of Safety

A common dynamic in the public sector is the need for security. We don't mean to insult anyone here, but, most people in the public sector are not risk takers.  As a result of this inherent need to feel secure many agencies want to deal with a large monolithic corporation. These companies tout deep pockets, virtually infinite resources, and triple "A" bond ratings. While corporate stability has its place in the decision making process, one must realize that this sense of security may be more perceived than real.

A countless number of large corporations have entered the public safety software market, with big promises and grand dreams, only to abandon the market after realizing that doing business in this market is difficult and expensive. Most of these large companies do other things such as build airplanes or manufacture telephone equipment. While the representatives from the public safety division of such a company may be very sincere, ultimately the need to show profitability to corporate stockholders force these companies to abandon the public safety market to focus on more lucrative endeavors. If the corporation you are doing business with abandons their public safety division, how secure are you? Any effort to litigate such a situation usually proves to be expensive and virtually non-productive.

Accompanying the false sense of security provided by the large corporate vendor, is usually a significant cost for operational overhead. The products offered by the larger corporations are not necessarily superior products, in fact often the large corporation simply enters into a partnership with a smaller vendor for the purpose of responding to an RFP.   In the final analysis most law enforcement agencies who can afford to do business with large corporations can pay 2 to 5 times more for the actual software product delivered, simply for the benefit of feeling secure even if they are not.  This additional cost is usually wrapped in value added services such as "Integration" and "Project Management" and other such soft services that are difficult to define and primarily designed to create the image that you are getting more and that the additional cost is justified.  (Want to buy some ocean-front property in Kansas?)

Understanding the realities of this situation and the history of the market is important to us as a small company. We often have to respond to questions concerning our size and stability as a company. In this arena we do what we can to provide safety to our customers.

• Longevity: Incorporated in 1999 (and having operated as a DBA prior to incorporation) we have a track record and history that shows our commitment to the market regardless of corporate size.
• We provide the software for evaluation first, before the purchase.
• Keep license costs low, therefore minimizing the financial exposure of an given municipal agency.  Less financial exposure usually means less risk.
• Maintain data in industry standard formats so the customer's data is always easily accessible to that customer and is not held hostage in some proprietary file format.
• Provide extraction utilities so data can be retrieved in a multiple number of file formats.

However the most significant argument is to make potential customers understand that their is no real safety no matter who the vendor is.  Even the largest of companies can (and have) turn their back on this market leaving their respective customers stranded.

The Law Enforcement Market

If you were to look at the law enforcement market as a pyramid, it would be quite flat! The small agencies cover the broad base of the pyramid and as the size of the agencies increase the pyramid comes to a point rather quickly.  According to the US Department of Justice, their are approximately 17,120 state, county and local and special law enforcement agencies in the United States. The breakdown for local law enforcement jurisdictions is as follows:

It is easy to see that the greatest number of potential customers exist at the lower end of the market. In fact over 88% of the local law enforcement agencies in the United States would be classified as small because they serve a base population of less than 25,000 people.  However most small law enforcement agencies, typically do not have the funding for items of substantial cost. The following table shows the typical operating expenditures for local law enforcement agencies. While these numbers do not include capital expenditures it is reasonable to conclude that available funding for capital expenditures is proportional to the general operating budget.

The Problem

Just because an agency is small does not mean that their purchasing process or requirements are any less stringent. Given the cost of doing business in the public sector it is understandable that many companies choose not to do business with small agencies because the cost of making sales in the lower end of the market usually exceed the revenue realized from the business.

For this reason most main stream public safety vendors focus their marketing and sales attention on the medium and large size agencies. However, with medium and large agencies representing significantly less than the median average number of agencies, most vendors compete for the business of a relatively small (small by number not by size) segment of the market. This leaves the largest segment of the market with little to choose from as they are viewed as too small to do business with.

The Resulting Strategy

Small agencies may not have big budgets, but their need for quality cost effective solutions is no less than their larger peers. Non-funded State and Federal mandated programs and reporting requirements are not waived just because your agency is small. Therefore the tools and equipment which assist in the process of day-to-day operations is just as important to the town of "Mayberry" as it is to New York City. However we still must remember the cost of doing business.

As the saying goes, "If you can't raise the bridge, lower the river". The solution to the problem is a means by which the expense associated with the typical procurement cycle can be avoided. If sales expenses are minimized or virtually eliminated, then the product price can be significantly lowered as these expenses no longer have to be absorbed into successful sales. With a significantly lower price, a greater number of agencies at the lower end of the market can afford the product.  Likewise, with a lower product price the probability that a purchase would be below the threshold level of a local government's mandatory procurement or BID requirement is drastically increased.  This means that with the formal bid process not required and a minimal purchase price the largest number of agencies are now positioned to purchase our product.

However, before anyone purchases anything they generally want to know what they are getting, that is why they ask for or require demonstrations. However "canned" polished demonstrations can often be misleading to the user and do not give the user the ability to truly see for themselves how "user friendly" or workable a software product really is.  For that a user must go hands-on.  Therefore it is important to make our product available to them for evaluation before they make a purchasing decision.

We believe that the Internet provides a method for achieving these goals. The fact that you are reading this Hypertext Markup Language (HTML) document is proof that the internet is a viable mechanism for product distribution. By distributing our product via the Internet we can avoid costly travel and marketing expenses. This electronic point of presence also permits us to reach out to many agencies across the country that we otherwise would little exposure to.