One set of data I frequently reference is Development Counsellor’s International Winning Strategies research. It is the basis for my claim that “76% of the time your community’s image determines if you are on or off the short list of locations for due diligence”.
Here is the study chart that looks at when an economic development group is first contacted. Note that, only 24% of the time is an EDO contacted as part of the initial screening. That means, for 76% of investment opportunities, your community is either completely ignored or information about your community is gathered through other means.
The Report indicates that “Often, an executive’s first contact with an economic development organization is through the Organization’s website.” Knowing that, how well is your website working for you? Is it designed with the information needs of the capital investor (or site selection consultant) in mind? Or, has it been designed to appeal to your Board of Directors, financial funders and local elected officials? If the latter, then you need to take two steps back and revisit your strategic choices.
Getting on that short list of locations is the outcome measure for the First Moment of Truth. If your community fails to make the short list, it can be considered a “game, set, match” situation.
The good news is that you are rarely aware when your community fails to make a location short list. The bad news is that you are rarely aware when your community fails to make a location short list.
The Magnitude of The Challenge – Some Kitchen Logic
In 2011, Site Selection Magazine reported 4,978 deals nationally that met their minimum criteria for inclusion for the Governor’s Cup Award. Over a three-year period, the cumulative number was reported as 13,944.
According to the US Census Bureau, 2012 Census of Governments Report, there are 35,886 cities, towns and townships across the Nation.
That means, all things considered equal (which we know they are not) there is roughly 1 capital investment deal for every 7 municipalities executed per year.
But, since not every municipality does a great job of building awareness of their location as an ideal place to do business, you would think that establishing name recognition might be all it takes to stand out from the crowd. Said another way, invest in creating awareness of your community through promotion and the proverbial spigot will open to allow deal flow. Some Agencies will say – “You need to identify a way to make your community as well known as iconic brands like Apple or Nike. That way, Companies looking to make a capital investment will find you rather than you having to find them.”
It sounds logical until you realize that brand names are trademark protected and municipality names are not. There is only one legal organization named Apple Inc., and one named Nike Inc.
But, if you are the economic development professional for Greenville, you will live in 1 of 47 states that have a municipality named Greenville. If you happened to live in New York, you could reside in 1 of 3 counties (Greene, Orange or Westchester) that have a municipality named Greenville. If you think Greenville is an exception, there are 30 municipalities named Franklin in the U.S., 29 named Clinton, 28 named Springfield, 25 named Salem, 24 named Fairview, 24 named Washington, 23 named Madison, 22 named Georgetown, 21 named Arlington, 21 named Marion, 21 named Oxford, and so on and so forth. You not only have to get a potential capital investor to remember your community’s name, you have to get him/her to remember the state (and sometimes county) where your community is located. Name recognition as a lead differentiating strategy to win the First Moment of Truth is certainly not without a healthy dose of risk.
So What Can You Realistically Do?
Some people would say this is the million-dollar question. We know the answer isn’t to simply sit back and wring your hands. As the headline says, “You’ve got to be in it to win it.”
The simple answer is effective branding, beginning with a candid assessment of your community’s core promise and competitiveness. Then you need to methodically communicate your promise to the capital investors with the highest probability of putting your community on the short list for due diligence.
The fortunate thing is that the solution is not rocket science. It is simply hard work and discipline.
- Define your community promise. It is hard to differentiate your community on an end-benefit promise like “business friendly climate”, but every community has a unique asset combination that delivers the end benefit. Your community’s point of difference will most likely be in the way it delivers the end benefit experience. Talk to the people currently doing business in your community to find out why they like being there. Write down the value proposition that you uncover. Validate it for relevance, authenticity and competitiveness.
- Invest in your community if it is not competitive. Most communities will find that their asset collection is unique, but not remarkable. DO NOT INVEST IN PROMOTION until you have improved your community’s competitive position. Painting a pig doesn’t turn it into a swan. Strengthen your community’s value proposition first and then promote it.
- Target effectively. Most communities promote too broadly. The smaller the budget, the more narrow cast your efforts need to be. For communities with a limited budget, I counsel them to have a target list of companies and site selection consultants, complete with a) the name of the individuals they want to tell their story to, b) a reason why their community promise would be relevant and competitive, and c) a specific person in their EDO assigned accountability for ensuring the communication occurs. The typical reaction is – “Wow, that is a lot of work.” It is. But in reality, if you don’t have a lot of money you can’t afford to be wasteful and will need to work extra hard to ensure every dime spent has impact. Don’t reach out to everybody. Reach out to the 20% that represent your highest potential for success.
- Collaborate. I continue to believe that winning the First Moment of Truth is a team sport. You should be collaborating with regional and state initiatives focused on identifying quality leads in industries that would find your community promise compelling. One key to sustainable success is whenever possible use “Other people’s resources, Other people’s knowledge, and Other people’s money”. There is a time to work together and a time to compete with each other. I believe the First Moment of Truth is a time to work together. If your community is not completely aware of the broader attraction efforts in your region and state, then you are missing a major opportunity. Most communities simply cannot afford to go it alone. Take the funds you save through collaboration and reinvest them in winning the Second Moment of Truth.
- Invest in BR&E. For most communities, the majority of job growth is going to come from expansion of companies already ding business in your location. These companies are not your tenants. Your community is not the landlord. These are your partners. Their success is your success. Find out what in your business environment is in the way of their success and work hard to find a mutually acceptable solution that reduces (or removes) the barrier. If a company can continue to envision operational success in your community, there is little reason for them to relocate and every reason for the company to expand. Identify the 20% of companies that offer 80% of foreseeable job growth in your community and make absolutely certain you know what the business climate barriers and enablers are. Win the Third Moment of Truth.
Hopefully the above provides some food for thought. I’d love to have you weigh in by leaving a comment with your perspective. In your opinion, what gets in the way of communities doing the basic blocking and tackling? What do communities contract with an Agency for a new logo and tagline with the expectation it is going to solve competitive deficiencies? Have you ever seen the “paint a pig” phenomenon play out? If yes, how do you recognize when you are in the middle of one of those exercises?
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