Perhaps the most basic challenge facing investment promotion agencies (IPAs) is this: how to make their business location stand out from all the other locations investing businesses could choose instead.
That's why effective location differentiation is essential, and why investment value proposition research and development should be the starting point for every IPA's marketing and sales activities (and all their other activities for that matter!).
But What Exactly is an Inward Investment Value Proposition?
Your location's inward investment value proposition can be described as it's unique promise of value to expanding businesses. Essentially, it's a statement summarising why businesses should select your location over the competition, by demonstrating that it addresses their needs most effectively - thereby delivering more value. In practice, this statement must be supported by more in-depth location data, providing credible evidence for your claims.An Effective Inward Investment Value Proposition Should Identify:
- Your target market segment of expanding businesses
- What their location selection problems are
- The unique reasons why your location solves their problems
- Why your location solutions are better than your competitors'
So, now we've clarified what an inward investment value proposition is, here are 5 guiding principles to consider when it comes to making yours outstanding:
1. Specialise. Target. Differentiate.
The fact is that different types of businesses have widely differing types of location needs and priorities. Some may need to minimise costs and get physical goods to market as quickly as possible; others may need access to the highly skilled (albeit expensive) people you'll find in urban knowledge clusters. And it's highly unlikely that your location will be able to offer unique benefits to all kinds of businesses.
The key, therefore, is to match your genuine benefits with the identified needs of a complementary market segment of expanding companies. That's the case for developing highly targeted value propositions focused on specific industry sectors or business functions rather than trying to be all things to all businesses.
2. Resist the Temptation to Doctor the Data.
This is all about ensuring that your inward investment value propositions are credible and trustworthy. Businesses will expect your claims to be supported by evidence, including high-quality, verifiable data. And the more transparent that data is, the more likely it is that businesses will trust it, and you. If it takes statistical gymnastics to make the data work in your favour, there's a high chance that you're chasing the wrong types of businesses.
3. Quantify Value Wherever Possible.
For businesses, value is all about money - saving it, making more of it, and minimising the risk of losing it. Therefore, wherever possible, your inward investment value proposition should quantify the financial advantages of selecting your location (again based on verifiable data and trustworthy calculations).
4. Choose Your Competitors Carefully.
This is another point about credibility and trustworthiness. It's not unusual to see investment promotion agencies presenting comparisons versus locations that aren't really competitors at all, but which have been selected to make their location look better.
Expanding businesses, which will understand the sectors they operate in, are unlikely to be convinced by this. And they're unlikely to see the investment promotion agency in question as a credible partner, because the evidence will suggest that they don't really understand the sectors they're targeting. So, if you compare your location with others, make sure they're credible competitor locations!
5. Don't Leave Your Inward Investment Value Proposition on the Shelf.
Another thing that's often found in the world of inward investment promotion: agencies commission expensive consultancy reports to identify their unique location benefits, supported by detailed evidence and data. But then the report stays on the shelf, or is only occasionally pulled out to inform 'sales' proposals to individual businesses with which the agency already has direct contact (in the later stages of the marketing and sales process).
The fact is that your inward investment value propositions, and the data that support them, should inform all of your marketing and sales activities, throughout the process. If you don't use them to attract businesses in the early stages of location research and evaluation (notably online), you'll have a smaller pool of known investing businesses to submit customised 'sales' proposals to anyway. For this reason, we believe in making value proposition documents marketing ready right from the start - not just turning consultancy reports into marketing materials later on. In other words, value proposition development has to be an intrinsic part of your overall inward investment marketing and 'sales' strategy.
Author:
Nick Smillie
Managing Director & Senior Consultant
