You have to know the federal government to be successful in the state and local market. Knowing how to use the various data sets federal agencies produce to effectively target the local governments for your business development efforts is but one proof of my oft-used adage.

The Bureau of the Census is required by law to conduct a census of governments every 5 years. The census covers three major areas -- government organization, public employment and finance. The census of governments includes general purpose governments with which we're all familiar -- counties and municipalities -- but it also covers special purpose governments, some 50,000 in all, including independent school districts and special districts. Special districts can include ports, airports, public housing authorities, public utilities, mass transit authorities, public hospitals and many more. If for no other reason, knowing these special districts exist will keep your commercial sales organization away from your prospects.

The Census Bureau conducted its latest government census in 2007 but will be releasing the data over the next two years. The employment data should be released this fall. Finance data for states is scheduled for December, 2008 and for local governments in 2009. It's a long time to wait, but the data is a gold mine. From the little information that has been released to date, we know that 1,951 new local governments have been created since 2002. That number includes 78 new municipalities and 2,329 special districts. On the wane are independent school districts; 455 have been eliminated during the same time frame.

The Bureau codes the employee and finance data by 41 functional areas and expends a great deal of effort normalizing it so that good comparisons may be made. Instead, of targeting local governments by population like all your competitors do, you can begin to do some very smart things. If you sell jail management systems, for example, you can target not just the local governments that are spending the most on corrections, but rather those localities for which correction spending is increasing rapidly but employment in that area remains flat. That's a government that is experiencing pain and will be ready to listen to your solutions.

I've listened to many leaders of public sector sales teams describe their methodology for targeting local governments. It's almost always determined by population. They either target the big localities or what many call "Tier 2" governments -- usually described as those with populations between 50,000 and 250,000. Population data is easy to come by -- that's why everyone uses it -- so the competition will be fierce. If your company doesn't have the resources to data mine the census of finance, consider taking one additional step with the population data. Instead of targeting the largest localities, think about the fastest growing. Local governments provide more citizen-facing services than any other type of government. When their population rises rapidly, it's hard for those governments to scale up to continue providing the very quality of service that made them attractive to residents in the first place. A look at the top 10 counties by population reveals that the average population growth is 11.4%. Now, let's compare that to the 10 fastest growing counties with a population over 50,000. Their average population growth is 61.9%.

Don't forget some cities and counties on top 10 lists by population are losing residents. Yes, they have money, but they're probably also facing deficits as is Chicago. The city has lost 2% of its population since 2000 and last month Mayor Daley announced management steps to cut spending by $20 million. Certainly you can do business in Chicago, but you need to position your products, services and solutions as increasing government efficiency and reducing costs.

The top 10 fastest growing counties are:

INPUT members may use Local Government Profiles to effectively target local governments.

Gain more insight into doing business with local governments at INPUT's 3rd Annual State & Local MarketView event on June 4, 2008 in Tysons Corner.