Breaking New Data On Best And Worst States For Business

Development Counsellors International (DCI) released the results of their most recent quantitative research survey of executives with site selection responsibility at the IEDC meeting in Charlotte, NC this morning (9-19-2011). The report is titled “A View From Corporate America: Winning Strategies in Economic Development Marketing”. DCI first conducted this survey in 1996 to help economic development professionals better understand what really matters to capital investors when selecting a location to do business from.

For perspective, DCI has run this survey in 1996, 1999, 2002, 2005, 2008 and now 2011. I want to highlight this commitment by DCI to help the economic development profession make data based decisions on how to invest limited resources in a way to maximize the chance their location has the best chance of winning the First Moment of Truth. I applaud the efforts of DCI to encourage more data informed decision making in economic development marketing mix choices. In my opinion, reliance on data as an aid to judgment should be standard operating procedure in economic development Organizations. This DCI study should be mandatory reading for everybody (both professionals and volunteers) involved in economic development.

Here are a few highlights that I found very interesting.

  • The Wall Street Journal delivers high penetration of the executive audience relative to other publications. This is very consistent with my own experience in working with the WSJ. Note, 82% of respondents identified the WSJ as a publication they read. In and of itself, probably not surprising. But, when you consider the next most read publication (daily local newspapers) was cited by only 39%, the dominance of the WSJ as a way to reach executives is very clear. Executives even cited the online version of the WSJ more often as a source of information than any other online news service (including CNN and Bloomberg online).
  • Communities must have a strong online presence to effectively compete. The study indicates that 76% of the time a short list of locations to take into due diligence is determined without ever talking to an economic development professional. Without a well constructed website and high profile online, communities are restricted to competing for a share of only 24% of investment occasions. If you want to accelerate job growth and increase economic prosperity in your community, you have to compete for a share of 100% of capital investment opportunities, not be self-restricted to 24%. As an aside, in past presentations I have quoted the 2008 DCI data that indicated the number was 71%. In 2-years it is clear the importance of having a strong, searchable online presence has only grown.
  • Design your website with the customer in mind. One of the deadly sins I have called out in an earlier post [hot link to] is talking to yourself rather than the potential capital investor. The DCI study provides insight onto what executives are looking for when visiting your website. You should be absolutely certain your website delivers the information they want. If it doesn’t, the solution is simple – change your website!

Of course, everybody will be interested in the data on which states are considered the best and worst for business. Don’t get mad if your state is closer to the worst than best. Take it as a challenge and get busy improving your business climate.

One cautionary note when interpreting the data on what executives think the most impactful sources of information are for influencing their perception of a location’s business climate.

It is my experience customers are not really aware of what truly impacts their perceptions. For example, advertising does not rank very high in the results. But, it is not really surprising. When I studied tactics for promoting prescription pharmaceuticals to doctors, neither sales calls nor advertising were ever cited by physicians as effective promotional tactics. Yet, well-controlled, in-market heavy-up tests evaluating actual prescribing behavior clearly proved the opposite. The potential for type-II error with this kind of perceptual data is high. Be confident that tactics indentified as important actually are important. But, you should not be confident tactics seen as ineffective actually are. As with any market research study, interpret with care and use the data as an aid to judgment not as a replacement for judgment.

Let me close by saying BRAVO to DCI for the gift of data and the sustained commitment to helping economic development professionals become even more effective at their job.

What Are Your Thoughts?

Please share your thoughts on the DCI data. Were there any surprises for you? What areas in your communication plan are you going to potentially reevaluate based on the survey results?

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