Scorecards can be a very helpful tool to ensure marketers stay focused on creating strategies and tactical plans that are connected to delivering meaningful results for a Company. I have been exploring the reapplication of scorecards in place branding. The key is to identify the most crucial components of the capital investor’s location decision process that are predictive of the final choice. As you might expect, identifying and validating those attributes is the really hard part.
In general, there are four dimensions of measurement focus on when evaluating brand performance. Here is a translation for place branding:
- Functionality – How well does your location deliver the basics? Can the company CEO envision succeeding there? What are your location’s points of parity and points of difference (positive and negative) versus the competition? Every location needs to deliver a combination of functional benefits. These functional benefits become the basis for the CEO to rationalize the final decision. Magazines like Site Selection and Area Development conduct national surveys to help economic development professionals understand which functional benefits are the most important in the average capital investment decision process. These surveys are a good starting point.
- Convenience – How easy is it to find information on sites in your location? How transparent and simple is your process for evaluating potential sites? Time is money. The ease and speed of the process for evaluating and then moving forward with a final decision to invest capital in your location is important. If it is too difficult, then alternative location choices will be more attractive. CFOs [hot link to ] are particularly attuned to the financial value of time to the P&L. Perceived delays in getting the decision finalized, or in bringing the new investment to the point of contributing to the bottom-line, can mean million of dollars in lost revenue for a Company.
- Image – How your location is perceived matters. Site selection decisions are made on emotion and subsequently rationalized by facts and figures. You should be evaluating your location based on important emotional attributes. For example, it is no surprise Advertising Agencies would ideally like to have a Madison Avenue address, or start-up high tech companies perceive value in being associated with Silicon Valley. These locations have positive cache. Unfortunately, locations can be associated with negative perceptions as well. When it comes to creating the short list of location options to take into due diligence, these negative perceptions can make the difference between being on or off the list. When you consider that 71% of the time a short list is created without every speaking to an economic development professional, it isn’t hard to comprehend why measuring your image is important.
- Value – How costly (or efficient) is it to do business from your location? Taxes represent only part of the answer. Skilled labor availability, productivity, cost of getting to market, proximity to supply chain services, potential partnerships, cost of construction, etc. all contribute to the concept of value. You don’t have to provide the best incentive package; your location has to represent the best value proposition. Companies often create value table based on a number of weighted criteria to help evaluate locations in the due diligence phase of the capital investment decision.
Investing time to create an effective scorecard to measure the performance of your economic development marketing plans can payout by ensuring tactical choices contribute to improving overall impact. At a minimum it helps ensure the marketers think through underlying assumptions behind promotional investment choices and can articulate their cause:effect hypotheses.
Marketers in the private sector use marketing mix models to help guide the tactical choices in their promotional mix. Third party vendors often construct these models. They have statisticians on staff and access to historical consumer purchase data. Unfortunately, in economic development the time series data to evaluate various place branding tactics are not readily available. And, even if they were, the cost to access would likely be impractical for most EDOs.
In the interim, we make due by asking a series of 7-questions of every promotional investment in economic development to ensure there is at least a logical reason for spending the money.
- Who are we trying to communicate with?
- What behavior are we trying to change or perception or to correct/establish?
- What do we want to say that will change the behavior/perception?
- How would success make a difference in the ultimate capital investment decision?
- Where should we be delivering the message? Which communication channels are our Who target engaged in and view as credible?
- When should the message be delivered in the capital investment decision process so our Who target is most receptive?
- How will we assess success?
Assessing success is where the Scorecard can be of greatest help.
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