AngelouEconomics
Getting the attention of your targeted business prospects is a difficult task in the best of situations; battling 13,000 competitors makes it substantially more so. Unfortunately, that is the challenge faced today by economic development professionals. Because of this increasingly intense competition, it is imperative for economic developers to do all in their power to elevate above the competition in order to achieve meaningful results. Angelou Economics has observed that the following five marketing fundamentals can make the difference between great success and mediocrity.
1. Measure results
Knowing what you want to achieve and how to determine whether you are ultimately successful is where the most effective marketing programs begin. Most successful economic development organizations have meaningful performance objectives as their starting point. This means not only tracking final results, but also the effectiveness of your various approaches to generating and converting leads, prospects and locates.
To help evaluate which elements of the marketing mix are most cost effective, try to calculate “dollar to dollar” results from the marketing initiatives which you carry out. One way to do this is to divide expenditures for a particular marketing category, such as advertising or sales trips, by the results generated, in order to derive an average cost per lead or prospect. For instance, your year’s advertising in a particular site selection magazine may yield one lead per every $600 spent while an annual sales trip to a key market area may generate on average one lead per $800. Recognize that some prospects and leads will result from a combination of different elements of the marketing mix.
Along with clarifying your best lead generation approaches, you’ll discover that some approaches are more effective than others at generating quality prospects; the type that may ultimately become locates. Conversely, you may also determine that an approach where you’re spending valuable marketing dollars churns up numerous leads - but few ever come to fruition. Using the previous example, you might find yourself generating numerous leads through advertising, but discover that few ever turn into qualified relocation prospects that actually visit your community or region. On the other hand, the annual sales trip with face-to face meetings may not generate many leads but those that do develop often end up locating in your community.
Once you’ve fine tuned the types of marketing used to generate leads, conversion rates are a useful technique to gauge how effective you are in working with those new clients. Conversion rates are essentially a tool to measure your organization’s efficiency in converting potential customers into new or expanded businesses. As used in economic development, they are calculated by dividing the number of qualified prospects or business locates by the total number of leads. For example, if over the past year your organization converted 20 leads into 5 qualified prospects into 2 locates then your lead to prospect conversion rate would be 5/20 = 25% while your lead to locate conversion rate would be 2/20 or 10%. You can also carry the analysis one step further and compare the conversion rates of leads generated from different types of marketing.
We can often learn more from our failures than from our successes. Don’t neglect to carefully track why companies go elsewhere. Was it because certain skill sets in your workforce were inadequate to support the companies’ operations, the lack of an appropriate building, insufficient incentives, or some other factor? This information helps us to repair any deficiencies and to become more competitive in the future.
2. Understand and meet your customers’ needs
Understanding and meeting customer needs is the essence of marketing. You can do just about everything else wrong, yet serve your customers well, and often be successful. To get a true edge on the competition, strive to not only meet, but exceed, their expectations. First, understand what they really want and need.
On most projects, there are 2-3 main drivers that are the differentiators between success and failure. A key starting point is precise identification of those critical site selection factors. At this point, careful listening to the prospective business is much more important than skillful presentation. This identification of real project needs can be more challenging than expected and often requires clarification. It is not uncommon for economic developers to hear conflicting requirements from the different corporate executives and consultants on the site selection team. It is your job to work your way through the conflicting information and understand what is really important to the success of this project.
Once the real “driver factors” are known, pull out all stops to demonstrate your specific competitive advantages relative to those needs. Perhaps you have a training program at your community college applicable to a primary workforce need, a building that meets their facility requirements, or an incentive program uniquely fitted to their financial needs. Customize your communications to emphasize these attributes and deliver the information ahead of schedule (thereby exceeding their expectations).
Your presentations should be customized to their specific requirements; and not include too much generic material. The key is to provide information that is timely, relevant and concise. Tell them what they need to know; not what you want to tell them. Include regional “subject experts” within the fields of most interest to the client. Avoid the tendency to present “canned” information rather than material customized to the businesses’ specific requirements.
The same need for customized information applies to websites. Develop sections devoted to your target industries with a list of area businesses within that sector, applicable cost information, relevant infrastructure, education/training programs, and other resources. Having a special section of your website dedicated to data centers, for instance, shows that data centers are of strong interest to your region.
Focus on meeting and exceeding your customers’ needs and you’ll successfully meet your own needs as well.
3. Marketing is a process … not an event
A colleague recently went to the drycleaners to pick up his clothing. When he walked in, the owner told him that there was no charge as the bill was on him. When asked why, the owner said that he wanted to thank my colleague for his steady business over the years. I suspect that my colleague won’t be changing drycleaners anytime soon. This is an example of relationship marketing.
Economic Development marketing is relationship marketing - an approach that includes the following steps: Awareness, Comparison, Transaction, Reinforcement and Advocacy. Successful projects will transition from initial awareness of your area to comparison with competitor areas to a transaction such as leasing of facility space and hiring, following successful completion of which the company’s decision will be reinforced, often turning them into strong advocates of your region and organization.
The importance of this “process versus event” approach was reinforced several years ago, when an economic developer scheduled a meeting with a former client in the electronics industry merely to thank him for placing a small design facility in the region. The meeting had barely started before the former client announced that they had a brand new need for another design center and based on his previous experience and dependable relationships, he had decided to locate the second facility in the region.
Just as with the recent success at the Beijing Olympics of the U.S. Men’s Basketball Team, your efforts will be most successful if all the parts work together. A well structured marketing plan contains initiatives that gain substantial value by tightly connecting to the other elements. A commonly-used approach used to help tie together marketing initiatives is to develop a marketing calendar which shows the timing of sales trips, trade shows, industry conferences, special events, etc. Connecting your marketing together reinforces awareness of your area and your specific messages. For example, before exhibiting at a major trade show some organizations send out direct mail or e-mails to attendees inviting them to stop by their booth for a drawing and advertise in trade publications read by many of the attendees.
4) Be different!
Granted, this point cuts across the grain of most of the advice delivered to us as children. But with so many competitors across the globe, it is essential to stand out from the pack. Marketing is about creating desirability and differentiation. Most organizations understand the desirability objective, but a quick glance through the oh-so-similar advertisements in any site selection magazine illustrates that we have a long way to go towards differentiating our messages and communities.
Carve out specific niches. Is your organization known for your interest and assets in at least one field not shared with numerous other economic development organizations? If a target industry market is already filled with competitors, then look for a specific category where you can be tops. You are normally much better positioned pursuing a more specialized industry with, say, 15 relocation or expansion projects per year and 30 competitors, than a larger field with 100 projects pursued by 1,000 organizations.
The fresh perspective and insights on targeting provided by a consultant can often be of value. AngelouEconomics has helped over 100 clients sharpen their industry targeting.
5. Use your Allies (and be used too!)
If there is one industry that absolutely requires effective alliances, it is certainly economic development. No organization has the resources to achieve all that it desires, yet, community and regional resources can be immense. The best organizations are often those that best engage those public and private resources.
Surveys of community economic development groups show that state departments of commerce, regional organizations, and utilities are viewed as the best resources for assistance with developing new business. These allies should be included along with those businesses being targeted as important parts of any relationship marketing process. Periodically communicate with them including face to face visits. Just as we market to prospective new and expanding businesses, we need to market to our principle allies.
If your allies are helpful and deliver results, be mindful of their needs by helping to recognize and bolster them. Exceed their expectations of you as a partner. This is of particular value for state agencies which require demonstrated support from the community level. Testify in support of their funding needs or write a note of recognition to a legislator.
Local colleges and universities are often underutilized as allies and resources. Their alumni can be excellent sources of new business leads as that Engineering or Business Administration graduate from 30 years ago may now be running a company. Don’t stop at the Office of the President or Chancellor. Often, the college Deans and department heads know best where their alumni are located and which are in positions of authority to influence corporate expansion to your region. One community reports of the location of a technical support center, partially because the company’s co-founder was a graduate of the local university’s College of Engineering.
Surveys have consistently shown that corporate decision makers are heavily influenced by their industry peers when making decisions about new facility locations. Business executives, particularly within the same industry, are viewed as credible sources of information. So, don’t forget the power of local businesses. Get them on your marketing team. Leverage their suppliers, customers, and other contacts. Local company support often means the difference between a “cold call” to the supplier and a “warm reception.”
Include appropriate local industry representatives on sales trips and when you host events for visiting companies and site consultants. Local business executives are often the ones most listened to as they have often dealt directly with many of the areas of strong interest and speak the executive “dialect”. Practicing these five fundamentals will help your organization achieve excellent marketing results. Measure results... Understand and meet your customers’ needs – and exceed their expectations... Take a long term relationship marketing approach… Be different and carve out unique niches… gain valuable leverage by using your allies (and being used too!). And think big! A favorite quotation from Michelangelo has much applicability to economic development:
“The greatest danger for most of us is not that we aim too high and miss it, but that we aim too low and reach it.”
Steve Vierck and the Angelou Economics professional staff is available to talk with you about developing and implementing effective marketing programs. Please do not hesitate to contact us directly at 512-225-9321.
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