One of the areas I get a lot of questions on is brand equity (or as I prefer to call it – brand promise). Most people want to know how to determine if they have a strong and compelling promise, and once they’ve decided on a specific promise they want to know how to ensure they are communicating it well. Both are great questions and important enough to each warrant a separate book. In fact, here are three you might want to check out if interested –
For those of you who have an interest, but not the time to read a book, I thought I’d share some of the questions I would seek answers to if evaluating a community’s (or product/service/company) promise. Hopefully these questions will serve as a guide in your exploration.
Is your promise distinctive and broad enough?
In order to be effective, a good brand promise must meet three conditions. It must be relevant. It must be competitive. And it must be authentic. Here are three basic questions you should have answers for. If you do not, you will learn a lot about how strong your brand promise is by getting answers to them.
Does the differentiation drive capital investor preference? All other things being equal, you need to be certain that the promise you make can actually lead to selecting your community over another for capital investment. That means your point of positive difference must contribute to the company’s well-being and success. The more obvious the connection, the easier it will be to communicate. The fact that cash incentives tend to be the final tiebreaker for many capital investment deals is testimony to how poorly communities are differentiated. Money is fungible; certain capabilities that enable commercial success are not. You ideally want to differentiate your community on a promise that is more valuable to a company than cash.
Is it transportable across industries? A brand promise meaningful to only one or just a few industries is less valuable to your community than a promise with broad appeal. If your promise appeals to a wide range of industries, it doesn’t mean you must pursue all of them at the same time. But, unlike a limited promise, you will have the opportunity to expand your communication efforts to additional targets when you have the resources to do so. Remember, you will be investing significant time and money to connect your community and promise in the minds of capital investors. If your promise appeals to only a narrow set of industries, then your community’s ability to sustain economic growth will be accordingly limited. Most of the time, this is not a desirable situation.
Is it built on a meaningful positive point of difference? Every community has a unique combination of assets, infrastructure and public policies. But even though you may appreciate those assets, it doesn’t guarantee your target audience will. You need to look at your community objectively and ensure the point of difference you focus on communicating is meaningful to capital investors. If your community is selected as the ideal business location, there will be plenty of time to learn to appreciate it is home to the world’s biggest ball of twine. A good exercise is to talk with executives doing business in your community and have them help you identify what are the most important and (by definition) most compelling attributes in their capital investment decision. Their insights are typically invaluable.
How can you achieve the full potential of your promise by identifying new assets, infrastructure investment or public policy reforms?
What is the ideal business climate for your targeted industries? Understanding what the best in class combination of assets, infrastructure and public policies are helps you identify your community’s shortcomings. You can identify the ideal business climate by asking executives in your target industries which communities they consider meet the ideal and why. Insights around the why are the most important to obtain.
Can you gain new capital investment by making changes to your community’s current business climate? What would it take to make a discontinuous improvement in the attractiveness of your business climate? Purposeful investment to create a more compelling value proposition has immediate and long-term payoff. Imagine the implications of investing $30 million in creating a desirable asset rather than being offered as incentive dollars. How many more capital investment opportunities would be created as a consequence? How much would loyalty of the companies currently in your community increase?
What other industries might be able to take advantage of your community’s business climate to achieve success? Often, we overlook industries (existing and emerging) that may see value in the assets that exist in our communities. If you happen to have a polymer cluster, what other industries would find the knowledge of chemistry of competitive value to their business? It is important to look at adjacent industries when determining which to target for capital investment.
What is the overarching strategy that connects the target industries you’ve selected and ensures the sustained competitiveness of your promise?
What is the interdependent connection between successful companies in your community? Every business community is a self-organizing system. There is a pattern of interdependence for mutual benefit. Understanding the relationship between companies in the system is helpful to developing economic development strategies for sustainable growth. When we talk about an OEM and its supporting Tier I and Tier II supply chain, we are describing an interdependent and self-organized system. But, a typical system is more complex than that. It includes financing organizations, educational organizations, as well as many other types of business and non-business entities. Having a deep understanding of how they work together for mutual progress is key to the ‘care and feeding’ of your community’s business climate. Lacking that understanding often results in unintended consequences when well-intended improvements are made.
What impact does each company have on your community’s economy? This requires an understanding of both current and potential future impact on both job and tax revenue growth. Industries and the companies within those industries will have a different impact potential on your community. Understanding the difference is key to helping you decide how to best allocate limited resources. Do you know how many employees each company currently has and what share of your total community tax revenue it represents? Do you know if the operational plan is to add employees or to reduce staffing? From a micro-management perspective, do you have plans and resources in place to help the companies and employees successfully address the challenges they will be experiencing?
Is there an industry portfolio management plan in place? In my opinion, every community needs an overarching plan to ensure sustained economic growth and prosperity. Growth industries need to be nurtured, waning companies need support in helping displaced employees work through career challenges. An industry portfolio management plan helps ensure limited resources are invested in a way that maximizes public and private sector benefits.
What Are Your Thoughts?
Do you feel your community has a strong brand promise? What are some examples of communities you believe do a great job at managing their brand (it is okay to share yours)? Any practical tips for creating and deploying an industry portfolio management plan?
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