Posts from — February 2009

John F. Hood, President
MCH, Inc.

They’ve started! Who? The institutions in line to receive $ billions of stimulus money. Even though the money is just starting to flow out of Washington, the institutions or departments on the receiving end have started to spend. Those that planned well before February 17th when the stimulus bill became law are ready to spend now.

The Missouri Department of Transportation (MODoT) wanted to be the first in the nation to spend stimulus money. Missouri has many needed highway projects for which there has been no funding. The same is true for many states. But Missouri wanted to be first. MODoT knew they would receive stimulus money, and they had planned what to do with some of it. They signed a contract with a construction company for a project the same day that the stimulus bill was signed into law. The construction company has already started hiring workers.

Some MCH customers have reported up-ticks in orders from school districts. Since no stimulus money has reached school districts yet, they are obviously spending money they already had. I believe that many institutions have been holding back, sitting on available money, because of the squeeze on state budgets and the dire warnings of cutbacks they kept hearing. But now that they know the money is coming, they feel comfortable loosening the purse strings. In coming weeks this trend is likely to accelerate.

So the message is – “It’s happening now!” Institutions in line for stimulus money know who they are, know that they are expected to spend the money, and are spending their own money in anticipation of getting more. It’s time to get in front of them ASAP.

Share your stories with us – post a comment so everyone has a better understanding of what’s happening. Is your pipeline filling up? Are you seeing more, or bigger, orders? What types of institutions are ordering?

CNN used data from RealtyTrac, The National Bureau of Economic Research, and the US Bureau of Labor Statistics to create an interactive map showing unemployment, employment, and foreclosure trends. Users can capture statistical information for a specific month or view the changes in each category from the time the recession began in December of 2007 through December 2009. MCH has been tracking the impact of the economic crisis for many months and we have consistently reported that safe havens are the education, government, and healthcare sectors. Although every industry has suffered, the job situation in the safe haven industries is on the positive side of the scale.

President Obama will address a joint session of Congress tonight and is expected to provide a high-level overview of the administration’s recovery plan.

John F. Hood, President
MCH, Inc.

I don’t know how many times since our webinar on February 18th about the stimulus package I’ve been asked: “When should I mail to take advantage of the stimulus funding?” And I have to answer: “I don’t know.” I do know that all marketers have to keep themselves in front of their institutional customers as best as possible. Since we don’t know when the money will actually show up in their bank accounts, we have to make sure that they are thinking of us when it does.

I also think there is a matter of attitude or confidence. There is plenty of reason to think that there will be some end of fiscal year spending of money that has been held back because of all the dire talk of budget cuts and layoffs. This is particularly true for the school market which will receive stimulus funding very quickly and where the fiscal year ends on June 30th for the most part. The question is how soon will the schools go from holding onto every dollar to realizing they no longer have to worry and go into “use it or lose it” mode.

Here’s one suggestion for those who are emailing their institutional customers, preferably each week. No doubt you are watching the responses from these campaigns. What I suggest is that if you see a significant up-tick in response, that’s the signal to put on the full court press, email, snail mail, telephone, etc. because that is likely to be the best indicator that the mood is changed and the money is available.

Two caveats, however. Watch out for state-by-state results as the states are cogs in the distribution of lots of federal money and they operate differently. Secondly, don’t use a buying signal from one type of institution as an indicator for another type unless both are receiving money under the same funding allocation.

President Obama has made it clear that the administration will not tolerate waste or frivolous spending of stimulus funds. As the nation’s mayors gathered at the White House, the President issued stern warnings:

“If a federal agency proposes a project that will waste that money, I will not hesitate to call them out on it.” and

“…if a local government does the same, I will call them out on it, and use the full power of my office and our administration to stop it.”

In keeping with President’s goal to make government more transparent, the administration’s new website Recovery.gov has been designed to help Americans track how stimulus funds are being spent. Be sure to check it out!

The Stimulus Marketing webinar held on February 18th was an overwhelming success. We’re estimating that more than 500 people listened to the presentation.

John F. Hood, MCH President and Kirk Chritton, Director of Marketing provided an analysis of the stimulus marketing bill and the revenue opportunities it represents for B2B marketers. The key takeaways from the event are that:

• The federal government is channeling hundreds of billions of dollars to institutions.
• Large amounts of money will be released immediately.
• Funding is not just for roads and bridges – there are many sales opportunities emerging.
• Most B2B marketers already do substantial business with institutions.
• Marketers need to use a distinct strategy to get the most from institutions.

Kirk and John provided information on specific institutional funding and who would be making the purchasing decisions at various institutions.

Here are just a few of the comments we received:

• “Good overview with significant categories of spend identified specifically.”
• “Very thorough and well worth the time.”
• “Good summary of the stimulus plan with specific numbers and targets. A number of good leads of where to go for more information.”
• “I look forward to receiving the link to forward to others in our company. I appreciate the fact that the sales pitch was minimal.”

You can still benefit from our in-depth research and projections to achieve greater success in business-to-institution (B2i) marketing. Click here to listen to the webinar. Click here to download the PowerPoint of the presentation.

There a new set of terms that will emerge as important buzzwords. These are concepts that will be on the minds of institutional buyers when they decide how to spend their stimulus funds. Companies that tie their products or marketing message into these concepts will have an edge.

All areas: Energy efficiency, green technology, renewable energy, affordable, efficient
Education: 21st Century schools, effective teaching and learning
Healthcare: Evidence-based, strong healthcare workforce, health information technology, effectiveness, preventive care

MCH has created an open group on LinkedIn. Click here to join the group and become part of the conversation about how the economic stimulus package creates B2B sales and marketing opportunities.

The White House has released details about the state-level impact of the newly signed economic recovery package. The report estimates that the combination of tax relief, safety net enhancements, and discretionary government spending will “create or save 3.5 million jobs over the next two years,” adding that the “Jobs created will be in a range of industries from clean energy to health care, with over 90% in the private sector.”

• OVERVIEW ON AMERICAN RECOVERY AND REINVESTMENT ACT
• IMPACT OF AMERICAN RECOVERY AND REINVESTMENT ACT ON WORKING FAMILIES
• EMPLOYMENT NUMBERS BY STATE
• EMPLOYMENT NUMBERS BY CONGRESSIONAL DISTRICT
• EDUCATION FACT SHEET
• ENERGY FACT SHEET
• HEALTH CARE FACT SHEET
• INFRASTRUCTURE FACT SHEET

The Stimulus Bill has been signed by President Obama and institutions are anxious for the funds to start flowing. In an Education Week article, Alyson Klein highlighted some of the more significant challenges facing Secretary of Education Arne Duncan.

• Top posts within the Department of Education have yet to be filled.
• Political appointees, not the career staff at the department, will be accountable for where the funds are channeled.
• School districts are pressing for details on how much money they’ll receive and are concerned that there aren’t specific guidelines in place for the timing of disbursements from the states to the districts.
• Secretary Duncan can waive the “maintenance of effort” requirement for states in dire economic circumstances, but the Education Department will need to determine which states are eligible for the exception.
• In keeping with the government transparency, schools will need to provide public notice on the Internet regarding how the funds are being spent.

Aides to Democrats in the House hope a large portion of the education funding contained in the Stimulus Bill will make it to state governments before July 1st. Duncan said, “We have to implement and execute this in an absolutely impeccable manner.” He also said, “the department plans to be very fast…in allocating the money and will give states real guidance around speed.”

To view stimulus funding for education in detail, see the PDF in Education Week’s article.

John F. Hood
President, MCH Inc.

As the details of the Stimulus Appropriations becomes more clear, it is apparent that congress has given tremendous authority and latitude about the spending directly back to President Obama and his cabinet. Department Secretaries are given authority to waive rules, set standards (or not), choose recipients, and choose timing. While the law provides direction, it also provides flexibility in the interest of getting the money spent quickly.

Here are some examples:

According to the Congressional Research Service: “The H.R.1 (stimulus bill) conference agreement does not provide guidance to the U.S. Department of Health and Human Services … on whether or not all the funds should be obligated in the first year of availability.” This refers to $2 billion in new childcare funding, representing a doubling of federal spending if spent in one year. These funds are available as of the enactment of the law, February 17, 2009.

The New York Times reported today under the headline: “For Education Chief, Stimulus Means Power, Money and Risk”. The article says: “Most of Mr. Duncan’s unusual power would come in disbursing a $54 billion stabilization fund intended to prevent public sector layoffs, mostly in schools. The bill sets aside $5 billion of that to reward states, districts and schools for setting high standards and narrowing achievement gaps between poor and affluent students. The law lets Mr. Duncan decide which states deserve awards and which programs merit special financing.”

“Congress usually spends two years debating the rules for how to spend $50 million,” said Jack Jennings, President of the Center on Education Policy, a research organization in Washington. “But this time they’re providing money without spelling out how it should be spent, so Arne Duncan and his staff are going to have to work out rules themselves in just weeks. He’s going to have his hands full.”

After all the fuss in Congress, they have returned much responsibility to President Obama and his cabinet secretaries.