Local Government IT Spending is Increasing: How to Win More Deals than Your Competitors
Any way you slice it, CivicPulse’s latest research report on IT Trends in Local Governments includes good news for govtech companies.
One of the key findings – the vast majority of local governments will be spending more on IT in FY 2022.

But for the best govtech marketers, “any way you slice it” isn’t good enough. Superstar govtech marketers will dig deeper into the data and get stronger results than their competition.
So let’s dig deeper.
Survey Says . . . Good News for Govtech
The data in the CivicPulse report (see chart below) reveals that the growing importance of IT will be reflected in local governments’ FY2022 budgets.

As you can see, more than 60% of local governments representing a population of 10K or more project their IT budget to increase next fiscal year. In fact, if you focus on governments with a population of 40,000 or more, the portion increasing their IT budget next year grows to 65-67%.
In other words, good news for govtech companies!
Segment, Segment, Segment
Marketers know that segmentation can translate to better results with the same (or less) investment of time and money. And seeing the data above, most marketers may think: “Good. I’ll focus my outreach on local governments with a population of 40,000 or more, and I’m golden.”
But we spotted a downside to that conclusion.
Focusing on local governments representing a population of 40K or more means focusing on just 11% of all local governments who represent a population of 1,000. That’s a small segment.
So we asked our partners at CivicPulse to provide us with a few additional cuts of the data. Specifically, we asked to see local governments segmented by:
- Total Government Spending
- Government Type
- Governments that Have a Head of IT vs Governments that Don’t
Total Government Spending
You can see the results for all 3 data cuts in the following charts; but here is the finding that really got our attention:


At first glance, this may not seem that interesting. After all, we already knew that higher population local governments are more likely to increase IT spending. Wouldn’t we, therefore, expect the same to be true for higher spending local governments?
This link between projected IT budgets in FY2022 and overall spending gives you a productive way of targeting 25% of the local government market– more than double the 11% by using population as your segmenting tool!
Government Type
Here are the results when we segment by Government Type.

You can see that municipalities and counties are more likely than townships to increase IT spending in FY2022. But we weren’t as excited by that observation because we happen to know that townships, on average, have both smaller populations and smaller overall budgets.
Governments that Have a Head of IT vs Governments that Don’t
We had a similar, less-than-enthusiastic reaction to the results of segmenting the data into local governments with and without a head of IT. The data confirms that local governments with a head of IT are more likely to increase IT spending in FY2022. But since we happen to know that having a head of IT is highly correlated with higher population and higher overall government spending, this didn’t seem that interesting.

(FYI – we regularly ask more than 21,000 local governments for the name and contact information for their head of IT. You’d be amazed at how many local governments don’t have one!)
What this means for GovTech Marketers
First of all, over-relying on population as your primary targeting/segmenting tool might cause you to miss great opportunities. If the data above wasn’t convincing enough, read How to Target the RIGHT Local Governments by Using Annual Expenditure Instead of Population. This blog post explores how if you only target local government with large populations, you’ll miss out on 50%-90% of your target market.
But we digress.
Segmenting can drive your success as a marketer, and putting data to use is the key to good segmenting.
Power Almanac subscribers can use our application to help with data-driven segmenting and targeting. Or use other available resources like the US Census Bureau. Segmenting with good data is worth the effort!