DoD Growth Secrets: Leveraging Aerospace and Defense Market Dynamics

So, again, if that’s not enough to convince you, I’m not sure what may be. But, Aerospace and defense, here’s another reality check: Aerospace and defense companies are worth more money. Okay, when I talk about being worth more money, they get higher valuations. And I know we can’t read that chart on the right, but I promise the red bar is related to Aerospace and defense.

Frankly, the EBITDA multiples are higher, right? So, while every company valuation is unique, companies with a successful history in defense work, along with those companies who may be in the category of Aerospace and defense, enjoy higher EBITDA multiples and valuation versus their private sector equivalents. A great example is in Emerging Markets worldwide. The average value Enterprise Value to earnings before interest, you know, basically EBITDA, in the metals and electronic sector in 2023 was a multiple of around 12x.

But companies operating in the Aerospace and defense industry saw the highest valuation with EBITDA multiples approaching 22.6x. I’ve even seen into the 30xs. When you start playing around in the defense world, it’s quite incredible how you can dramatically increase the sheer valuation of your company.

So, again, I know that we may not have a whole ton of CEOs and business owners on this call, but it is something that I think has to be pointed out when it comes to the idea of growing in defense.

Strategies for Leveraging Compliance Status

Now, we’re going to transition into talking about some proven strategies for leveraging your newly acquired status as a company complying with today’s DOD information security requirements. Now, if you’re not one of those companies and you haven’t sort of gotten with the program, so to speak, then what I would say to you is let’s get on the ball, all right?

Give us a call. Again, I’ll give you some contact information at the end, but hit the description in this video, or hang on and we’ll pull some props here to get you to a place where you can self-schedule time with one of our compliance experts.

I’m going to assume you’ve got the compliance out of the way. Or if you don’t, again, reach out to us and we’ll help you get there. So, we can get you on to the good stuff.

Also Check:- What is Controlled Unclassified Information (CUI) And Why You Should Care

Step One: Understanding Your Status

Understanding your status, if you still have temporary deficiencies in your plan or actual milestones, that’s okay. You may still be complying with DFARS, NIST, and your CMMC readiness. Right? So, CMMC readiness is a status that’s kind of as good as you can get right now until they start doing the actual certifications in the open market. But ultimately, you want to communicate your status to your sales team.

Tell your sales teams, “Hey, look, this is where we are,” whether it’s DFARS, NIST, and you’re CMMC ready, right? So, CMMC ready is a status that’s kind of as good as you can get right now until they start doing the actual certifications in the open market.

But ultimately, you want to communicate your status to your sales team so they know that you’ve got all this extra compliance stuff going on. It’s huge. Again, so many people go get compliant for one contract but then fail to communicate that to the rest of their sales team and make a big deal out of it.

Step Two: Define Your DOD Compliant Security Posture

Next, define your DOD-compliant security posture as a unique competitive selling advantage to be communicated in all sales materials. I think this is so important and so underdone. You communicate that you’re ISO certified, that you’re AS9100 certified, that you’ve got all these different certifications.

Let’s communicate via the websites, via your capability statements, email signatures, trade show booths, everything, guys. How do they know unless they see something that speaks to them? And something that speaks to them is saying, “Hey, look, we are cleared for work with the DOD.”

That’s also going to send a powerful message to your private sector clients in an era where information security and getting hacked is a really big deal. They want to know that you’re safe to do business with, and this is how to do it.

Step three

Communicate your compliant status at least 12 times per year, every year, to your existing marketing prospect lists across all marketing channels. It takes seven to 12 touches to get anyone to respond, and many private sector companies perform defense work they do not openly discuss with non-defense vendors.

You can even educate them about your journey to compliance, working with On Call as a great discussion starter and an easy way to come up with content for marketing communications. Bring up some marketing communications and tell them about your experience working with us.

Tell them about what it was like getting compliant. Tell them that you’ve got it. Tell them that you’ve really mastered it. Again, understand you’re not going to get anywhere with two or three or four touches. We’re talking seven to 12 communications before you can even think about getting a call back. That’s the way the world is right now. We’re so inundated when it comes to noise. I mean, I can just tell you my email box is flooded every day.

Step Four

So, again, if you’re not reaching out and contacting these people, you’re not going to get anywhere. So, step four: Have accounting pull a list of defense work you have performed in the last five to 10 years, the contact person, and when the last payment was. This list will be your highest success rate. Now, a lot of you may have answered at some point “no” on a questionnaire to whether you were compliant or not.

The challenge is that when you answer “no,” you’re not compliant. They don’t just sort of send you a memo saying, “Hey, sorry, there’s no longer an ability for us to work with you.” They just simply stop sending you business and they stop communicating because you’re not on an acceptable list to them, particularly if you’re dealing with companies like Lockheed Martin, Raytheon, BAE Systems, all those people. It’s tough because they just don’t really have the need to communicate that you’re disqualified.

In fact, it’s to their disadvantage to do that. So, I want you to go pull a list from accounting of all the people you’ve ever done defense work for. Make that list, hand it to a sales guy or sales gal, and make sure that they are calling on all of those contacts. Make sure they’re cleaning the list, getting it updated.

This is basic sales and marketing 101, have a clean, up-to-date list, and go find out who’s already bought from you, and let’s wake those people back up because you would be surprised at how many people may not be doing business with you because you may not have been compliant before or just simply because it’s been a while and you haven’t done proper marketing and sales outreach. And that’s not good.

Step Five

So, again, I always recommend that the first move is to go back to your previous clients. It’s going to be your highest success rate, and let’s go dig them out of the grave and get them breathing again. Now, step five: Have a sales email and call every contact, update their profile, and send them communications detailing that they are DOD compliant.

Okay, you got to let people know that you’re compliant and ready for subcontracted defense work, even if you’re used to being the prime. Trust me, you can get into some really massive contracts where there’s millions, even billions of dollars to be had as a subcontractor.

It’s definitely worth pursuing, and it also starts with just letting your network of people know that you’re compliant, right? So, send a sales email, give them a follow-up phone call. Again, this is work for the sales team, but maybe the marketing team, depends on how your company is set up, should be the sales team, though.

Love them as a client and would like to see if they are open to a discussion about expanding the relationship, especially as finding DOD compliant providers is difficult right now.

So, again, in this email to them, in your call to them, in the communication, you want to emphasize that you love them as a client, you miss them, you want more of their action, and we’d love to just generally communicate about what their needs are in defense to see if there are maybe some opportunities that haven’t been considered before. These are big things, right? You really got to walk sales through these steps.

Step Six: Implement a Magnetic Attraction Marketing Strategy

Implement a marketing strategy focused on magnetic attraction. The more specific you are in your marketing and sales, the more magnetic you’re going to be to the people who are actually going to spend money with you. We’re all familiar with marketing where we’re basically showing people what we do thousands and thousands of times, and yet we might get two or three good, qualified leads.

By publishing and really emphasizing that you are DFARS and NIST compliant for DOD work, you will be attracting the right kinds of buyers from the DOD and from defense primes—those companies that have prime defense contracts and who are looking for subcontractors to send work to.

That would be you. So, again, the concept of magnetic attraction in marketing and sales is powerful because it sends the people away who are not interested in what you’ve got going on. And that’s exactly what we want to do—we want to not have a bunch of our salespeople’s times wasted with time wasters. It’s so key.

Step Seven: Consistently Communicate Your Compliance Status Across All Marketing Channels

Communicate your compliant status across all marketing channels consistently. Make sure your website, capability statements, email signatures, and trade show booths all prominently display your DOD compliance. This not only attracts potential clients but also reassures existing clients of your commitment to security and compliance.

Step Eight: Leverage Case Studies and Success Stories

Leverage case studies and success stories from your compliance journey. Share testimonials from satisfied clients who appreciate your dedication to meeting DOD requirements. These stories serve as powerful proof points and can help build trust with potential clients.

Step Nine: Engage in Industry Forums and Networking Events

Engage with industry forums and networking events. Attend conferences, webinars, and workshops focused on defense contracting to expand your network and stay updated on industry trends. Building relationships with key stakeholders can open doors to new opportunities and collaborations.

Step Ten: Monitor and Adapt Your Marketing Strategy

Monitor and adapt your marketing strategy based on performance metrics. Track engagement rates, conversion rates, and other key performance indicators to assess the effectiveness of your marketing efforts. Adjust your strategy as needed to optimize results and maximize ROI.

By following these steps and adopting a proactive approach to marketing and sales, you can effectively leverage your DOD compliance to attract new clients, strengthen relationships with existing clients, and position your company for long-term success in the defense contracting market.