How to Target the RIGHT Local Governments by Using Annual Expenditure Instead of Population
Many local government marketers target cities and counties with large populations. Doesn’t a larger population mean a larger budget, and a larger budget mean a more qualified buyer?
Nope.
By only targeting local governments with large populations, you’re missing out on 50-90% of your target market.
50%-90%!
There are two reasons why targeting large-population local governments leaves money on the table:
- Very few cities and counties have large populations
- Most big budget local governments have smaller populations
Let’s take a look at data from the US Census Bureau.
We love data.
Very Few Cities and Counties Have Large Populations
I’ve spoken with hundreds of local government marketers, and most of them define a “large” city or county as having 500,000 people or more. Some lower that bar to 100,000 people or more.
If only they better understood their Total Addressable Market!
When you divide any group into segments of small, medium, and large, the small and large segments usually include at least 20-25% of the total.
But cities and counties with a population of 500,000 represent less than 1% of all local governments. That’s not even counting the 18,000 tiny towns in the US of less than 1,000 people. As you can see in the chart below, that’s a very thin slice of the pie.
If you refine your definition of large to mean a population of 100,000 residents or more, then the “large” segment of local governments represents less than 10% of the total.
Still teeny tiny.
So, let’s refocus. Let’s broaden your scope for connections, leads, and profitability.
By only targeting “large population” local governments, you’re barely targeting the local government market at all.
Most Big-Budget Local Governments Have Smaller Populations
“But I only want to target local governments with an annual budget of at least $_______.”
I hear that a lot, too.
Population-driven local government marketers say this when they assume only “large population” governments have money.
It’s time to rewrite that narrative.
Let’s say you want to target local governments with an annual budget of at least $10 million. Per the US Census Bureau data below, 76% of those targets have a population of less than 50,000 people. And 88% of those local governments have a population of less than 100,000!
Perhaps an annual budget of $10 million too small. How about $50 million or more a year? Now we’re looking at 69% of local governments with a population of LESS than 100,000.
Are you sure you want to focus exclusively on cities and counties with a population of 100,000 people or more?
Wait… Really? You’re still not convinced?
No problem. Increase that annual budget to $100 million, then. Now take a look. The MAJORITY of these local governments represent LESS than 100,000 people.
Why would you omit these local governments from your target market?
Why? WHY?!
Apologies.
I’m getting carried away.
I just want you to reach your full, marketing potential. And that means recognizing most local governments with big budgets have smaller populations.
Your New Targeting Strategy, Based on Annual Expenditure
There may be good reasons for using population as a targeting filter. But if you’re using population as a proxy for targeting local governments with “enough” money, please rethink your strategy. Instead, target based on their annual expenditure. Try it for yourself! Use the “Government Spend” filter on the Power Almanac platform. The Census Bureau data is already built in!
