Almost everyone working in the field of inward investment promotion will be familiar with inward investment value propositions. But what are they? And what aren't they? And what makes a good one?
'Value proposition' is a marketing concept that can apply to any kind of 'product' (including a business location). By one definition it's a concise statement presenting an organisation's unique promise of value to its customers. How does this 'product' deliver benefits that others don't?
But for some reason, in the field of inward investment promotion, we repeatedly see marketing messages (e.g. in websites or brochures) that are clearly intended to promise value for investors, but somehow miss the mark.
A recurring example is a certain kind of headline economic statistic. For example:
'Our region has GVA of X billion (£$€)', or 'a workforce of X million'.
(I've just randomly checked two major UK city inward investment websites. Both lead with statistics of this sort).
Messages like these present economic data but not value for investing businesses. Because they fail to answer essential, investor-focused questions:
So what? What's in it for our business?
(Often, they lack the essential context required to make them meaningful at all. Is X billion (£$€) GVA impressive anyway? How does it compare with competitor regions?)
We can understand the problem here by thinking of the prospective inward investor like any other kind of customer - a shopper, say. Which is exactly what they are - shopping around to find the ideal location and site. When I visit Marks and Spencer, I'm really not bothered about the company's turnover. I'm searching for a stylish cardigan that's just right for me!
And when a retailer wants to sell more cardigans they don't tell their customers about their impressive knitwear sales volumes. They identify their target audience segment (let's say 'well-seasoned gentlemen'), identify their needs, and communicate distinctive product benefits that align with them: e.g. 'comfort and style at a great price!'. That's their value proposition.
So why do inward investment marketing messages that try to promise value so often fail?
Here's an attempt at an explanation:
It's generally (and correctly) understood that businesses are likely to make investment decisions (including location and site selection) based on reliable data. So it follows that we should provide them with data about our location. And where do we source those data from? Often the same researchers/analysts who provide us with regional economic data for purposes including local government planning - providing a picture of what our economy looks like.
The problem is that investing business are unlikely to select your location and industry sector because the regional data looks good. They want to know the specific benefits for a business like theirs.
Understanding your region's economic profile is an essential baseline. But this shouldn't be the starting point for inward investment value proposition development. Instead, the starting point should be understanding the customer's (i.e. the prospective investor's) needs and drivers: the current trends influencing investment in their industry sector; the specific combination of factors (and their prioritisation) likely to determine their location choice. Only then can the right location data be identifed and presented to respond to those needs.
The clue's in the statement at the top of this post: 'value proposition' is a marketing concept. So why would value proposition development be left to data analysts?
To be absolutely clear: the data analyst's input is essential - they're a vital and highly skilled part of the team. But, in the case of inward investment value proposition development, their skills must be combined with other types of expertise: the industry sector knowledge (commercial, technological, etc.) required to understand business investment drivers, and the marketing (and 'sales') knowledge required to formulate value proposition messages that really hit the mark.
And the problem highlighted here isn't only about over-reliance on data analysts. It's just as bad when the job's left to non-specialist marketers and copywriters. In these cases, everything's 'excellent' and 'world-class', with none of the supporting evidence that a well-directed data analyst can provide!
The takeaway is that inward investment value proposition development requires a specialised combination of expertise: research and analysis; marketing and sales; business, commercial, industry sector, location and site knowledge. Credibility, and therefore effective investor attraction and engagement, depend on it. But fundamentally it's a marketing exercise, and it starts with understanding our 'customers' - targeted investing businesses.
Contact Clarity to talk about developing compelling inward investment value propositions for your location and industry sectors.
Author:
Nick Smillie
Managing Director & Senior Consultant
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