There are two ways to win government work. Most firms are doing neither.

There is a new paper in the Journal of Personal Selling & Sales Management that I think should be read by anyone selling into government. It came out in June, it is open access, and it contains a finding that runs directly against how most businesses organise their bid function.

The short version: being a bit proactive about public sector opportunities is worse than not being proactive at all.

Let me explain, because it took me a second read to accept it.

The study

Florian Holz, Aline Lanzrath and Christian Homburg, from Mannheim and Alliance Manchester Business School, ran 13 interviews with B2G sales managers and then surveyed 297 European salespeople selling directly to public buyers. Federal, state and local. Across industries. On average, public sector work made up about 61% of their department's revenue.

This is the first large quantitative study I have seen that asks the plain question: what actually works when you sell to government?

Finding one: the middle is where bids go to die

The paper measures what it calls reactive RFP behaviour, meaning how much a firm relies on responding to published tenders rather than engaging with buyers before anything is advertised.

The relationship with market performance is U-shaped. Firms that are highly proactive do well. Firms that are highly reactive do well. Firms in the middle do worst of all. The turning point sits at 4.13 on a seven-point scale, so squarely in the range where most companies actually live.

The logic is that these are two different games requiring two different sets of muscles.

Proactive selling is an effectiveness play: you build relationships, read policy signals, track budget cycles and contract expiries, and you are in the room while the buyer is still working out what they want.

Reactive selling is an efficiency play: you monitor the portals, you qualify ruthlessly, you have reusable content and a machine that turns compliant responses around fast at low cost per bid.

Do either one properly and you can win. Do a bit of both and you carry the cost of pre-tender engagement without the discipline, and the cost of a bid factory without the throughput.

And it gets sharper the more complex your product is. The authors found the U-shape steepens with product complexity, because complex offerings make early education expensive and half-hearted engagement especially wasteful.

Finding two: lowest price is not the strategy you think it is

The second finding is the one I would put in front of any sales director who says public sector is a race to the bottom.

Value-based pricing, meaning pricing anchored in the buyer's perceived value rather than your cost base, had a significant positive effect on performance. In formalised, RFP-driven public procurement. Where everyone assumes the cheapest bid wins.

The numbers in their strategy matrix are worth sitting with. Firms that combine proactive selling with value-based pricing scored highest on market performance at 5.40. But reactive firms that priced on value scored 5.15, and reactive firms that priced transactionally scored 4.59. That is a large gap, and it is available to you whether or not you have the relationships to play the pre-tender game.

There is one more detail that matters. The pricing effect did not depend on product complexity. It held for standardised, easily comparable products too. So the excuse that "our stuff is a commodity, we can only compete on price" does not survive contact with the data.

For a UK audience this lines up neatly with where the law has already moved. Section 19 of the Procurement Act 2023 replaced the most economically advantageous tender with the most advantageous tender. The word "economically" was deliberately dropped, and the government guidance is explicit that this is to reinforce that price does not have to take precedence. The evaluation framework is inviting you to make a value argument. Most bidders still turn up with a discount.

Finding three: what actually enables all this

The paper traces both behaviours back to two capabilities in the sales team.

The first is political skill, meaning the ability to read stakeholders, understand who really decides, and build relationships inside a system designed to limit them.

The second, and this is the one I would flag, is what they call data analysis savviness. The ability to pull signal out of the fragmented mess of pipeline notices, planned procurement notices, framework announcements, historic award data and policy documents scattered across dozens of platforms, and turn it into a view of where the opportunity is going.

Both capabilities pushed teams toward proactive engagement and toward value-based pricing. Which suggests something uncomfortable. Most firms are not stuck in the middle because they chose a hybrid strategy. They are stuck in the middle because they cannot process enough information to commit to either end.

The bit that should worry SMEs

The authors cite research showing offers for public contracts have fallen by roughly 54% in recent years, with over a fifth of contracts attracting a single bidder. Their explanation is that high performers rely heavily on activity before the tender is published, and that advantage compounds for incumbents.

Worse, the U-shape means a new entrant who dabbles in early engagement without the experience to do it well can end up performing below where it started.

The good news in the UK is that the transparent version of the pre-tender phase is now published. Preliminary market engagement notices under sections 16 and 17 of the Procurement Act, planned procurement notices under section 15, and pipeline notices under section 93 for authorities expecting to spend over £100m in the coming year. That is a legal, public, level route into the phase where requirements are still being written. If you are not tracking those notices, you have chosen the reactive strategy by default. You just have not admitted it yet.

Caveats

It is a European sample, self-reported performance measures, focused on tender-based procurement rather than quotes or frameworks, and cross-sectional, so read it as association rather than proof of causation. The authors are upfront about all of it.

What I would do with this

Pick your end of the curve and be honest about which one you are actually resourced for. Then build for it. If you are going proactive, that means budget and headcount for engagement that will not produce revenue this quarter. If you are going reactive, that means brutal qualification and a genuinely fast, low-cost response machine.

And either way, stop pricing on cost. The evaluation criteria stopped rewarding it before the market noticed.

So, where does your business actually sit on that curve? And if you are honest, is it a decision or a drift?