investment targeting and lead generation - un escap · difference between lead generation and...
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Workshop on Promotion and Facilitation of Foreign Direct Investment forSustainable Development in the Islamic Republic of Iran,
Tehran, 9-11 October 2018
Investment targeting and lead generation
OUTLINE OF PRESENTATION
▪ Investor targeting and lead generation
▪ Targeting specific companies
▪ An example of an investor targeting tracking system/database (CRM)
United Nations Economic and Social Commission for Asia and the Pacific
WHERE INVESTORS (CLIENTS) MEET GOVERNMENTS (IPAS): INVESTMENT PROMOTION
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• Information & Sales Packs
• Investment plans
• Policies and incentives
• Procedures and requirements
• Progress and achievements
• Create awareness
Image Building
•Advertizing and PR
• Information & Marketing
•Missions & Events
• Company targeting
• Company visits
• Follow-up
Lead Generation and Targeting • Information provision
•Assistance with contacts
•One-stop-shop services
•Assessment of manpower,, Infrastructure service needs
• Follow-up
Investor Servicing
• Continued “account executive attention”
• “Ombudsman” role and trouble-shooting function
• Follow-up on manpower, infrastructure, service needs
Aftercare and Policy Advocacy
Phase 1
Implementation
Phase 2 Phase 3 Phase 4 Phase 5
Strategic Assessment Location Screening, modeling & benchmarking
Cost comparison Site Evaluations
Investor targeting and lead generation
United Nations Economic and Social Commission for Asia and the Pacific
DIFFERENCE BETWEEN LEAD GENERATION AND TARGETING
▪ Lead generation is the process of acquiring qualified investment leads, through:– Preparation of sector-specific information for investment areas to be
promoted
– Investor targeting through research and checking activities in foreign countries
– Company visits, with a carefully prepared promotion package containing information on the opportunity, on the needs of the target company, and on the country in general
– Careful follow-up and investment target nurturing
▪ Targeting is the process of actively pursuing investment leads and ideally promote these to actual investment projects
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INVESTOR TARGETING DEFINED
▪ Investor targeting is a process comprising a number of related and either sequential/consecutive or simultaneous steps, tasks and decisions repeated as necessary
▪ Targeting is a means to gain the attention and interest of specificinternational investors through developing and confidentiallypromoting specific investment projects which may be of commercial interest to those investors
▪ There are five main principles which define targeting and distinguish it from more general « investment promotion »
▪ Overarching mission of an Investment Targeting Strategy (ITS): To direct the IPA to industries/firms/people with the highest probability of location/relocation to that region or country.
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▪ Governments follow national strategies to attract FDI in specific sectors to help achieve economic development objectives, cluster development and strengthen country and location images
▪ Investment promoters take a proactive approach as a starting point and proceed to target foreign investors at the company and industry level
▪ Investor targeting is a means to achieve strategic and sustainable development objectives as it is part of a coherent investment policy that is aligned with sustainable development goals
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INVESTOR TARGETING AND DEVELOPMENT OBJECTIVES
INVOLVING LEAD GENERATORSIN YOUR PROXIMITY
▪ For effective targeting and investment promotion, an IPA needs to build extensive networks with a set of key partners in the business-related sector, including:– Ministries of trade and industry, and related government agencies at
national and local levels
– Other ministries and government agencies, such as tourism, handicrafts, etc.
– Business associations, chambers of commerce
– Satisfied investors (“Ambassadors”)
– Honorary investment ambassadors
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▪ Advertising/public relations– To be effective, an advertising campaign needs a coordinated theme
and needs to be implemented over a period of time with regular placements appearing more than once. Readers do not register advertising that appears only once, so one-shot ads don’t work. Given a combination of the targeting and cost elements of an advertising campaign, IPAs report greater effectiveness for advertising in industry trade journals
▪ Media relations/press tours– Through targeting specific journalists and media, IPAs can generate
much greater and more positive coverage for specific investment themes and investment opportunities. This type of activity, either in the host country or in the home country (preferred if possible) can be more effective than advertising campaigns
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CONSIDER CAREFULLY WHICH TARGETING METHODS TO USE – ADVERTISING AND MEDIA
FIVE PRINCIPLES WHICH DEFINEINVESTOR TARGETING
1. Target industries and sectors first and then move to active identification of specific investment projects
2. Carefully planned and managed investor searchprogrammes
3. Investigation and analysis of specific corporate priorities
4. Confidential promotion to specific corporate executives
5. Single agency leadership
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INVESTOR TARGETING AS A SOURCE OF COMPETITIVE ADVANTAGE
▪ A high quality investor targeting initiative will give yourlocation a competitive advantage over locations with poortargeting skills.
▪ Going where there are fewer competitors = better chance of success.
▪ Professional targeting gives IPAs higher chance of success in attracting and retaining new FDI projects; and of gaining FDI better suited to the needs of your country.
Source: UNCTAD Third Generation Investment Promotion
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TEN GOLDEN RULES FOR EFFECTIVE INVESTOR TARGETING
▪ Rule One: Do Your Research CAREFULLY
▪ Rule Two: Use the Investor’s Eyes and Ears
▪ Rule Three: Concentrate on Listening
▪ Rule Four: First Impressions Count
▪ Rule Five: Be Reliable and Truthful
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TEN GOLDEN RULES, CONT.
▪ Rule Six: Understand Investor Needs
▪ Rule Seven: Only Promise What You Can Deliver
▪ Rule Eight: Always Exceed Client Expectations
▪ Rule Nine: Maintain Client Confidentiality
▪ Rule Ten: Focus on the REAL Project
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INDUSTRY TARGETING METHODOLOGY 1
▪ Industry structure▪ Growth trends▪ Inward investment▪ Industrial linkages▪ Import activity
Preparation of initial list
Analysis of industry-
specific trends
Locational fit analysis
Prescreening using
evaluative criteria
Targets
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INDUSTRY TARGETING METHODOLOGY 1, CONT.
Preparation of initial list
Analysis of industry-
specific trends
Locational fit analysis
Prescreening using
evaluative criteria
Targets
▪ Skill intensity ratios▪ Technical sophistication▪ Transportation access
requirements▪ Production scale
requirements
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INDUSTRY TARGETING METHODOLOGY 1, CONT.
Preparation of initial list
Analysis of industry-
specific trends
Locational fit analysis
Prescreening using
evaluative criteria
Targets
▪ Production/technology trends
▪ End user markets trends▪ Customers & suppliers▪ Barriers to entry▪ Other competitive forces
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INDUSTRY TARGETING METHODOLOGY 1, CONT.
▪ Location of key markets & suppliers
▪ Labour & skills requirements
▪ Facility requirements▪ Transport requirements
Preparation of initial list
Analysis of industry-
specific trends
Locational fit analysis
Prescreening using
evaluative criteria
Targets
LOCATION REQUIREMENTS FOR EACH BUSINESS ACTIVITY
Business sector
Labourcost
Real estate cost
Utilities Tax Accessibility Quality of life
Skilled labour
ICT and utility infrastructure
Manufacturing ++++ ++ +++ 0 ++ 0 ++ ++
Mining 0 + 0 ++ + +++ +++ +++
Sales and Marketing
++ ++ + ++ ++ 0 + ++
Distribution + + + + ++++ 0 ++ ++
1. Important note: different business activities require different location criteria. Labour costs are more important for manufacturing projects (labour-intensive) compared to mining activities (capital-intensive)
2. In general, investment decisions relating to manufacturing and distribution activities (low margins) are more cost focused, while sales and marketing activities are more quality driven
3. Assess how your country would score on each of the location fundamentals to analyze if there is a match between the business activity requirements and your business climate
0 = very limited, + = limited, ++ = average, +++ = significant, ++++ = very significantSource: ICA
Relation between location criteria and business activities:
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MATCHING LOCATION STRENGTHS WITH BUSINESS ACTIVITIES
▪ Identify your country’s strengths via a SWOT analysis or benchmark analysis▪ Assess whether there is a fit between the business activity and the business
environment of your country– Example: Accessibility is your countries’ strength, which is matching with
distribution activities
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Business activity
Labourcost
Real estate cost
Utilities Tax Accessibility Quality of life
Skilled labour
ICT and utility infrastructure
Your Country/locality
2 3 3 2 4 1 4 2
Country/locality B 1 1 4 3 1 3 3 3
Country/locality C 4 2 2 4 3 2 1 1
Country/locality D 3 4 1 1 2 4 2 4
Rank: 1 (lowest score) to 4 (highest score)
COMPARATIVE FIT ANALYSIS
Industry Requirements:▪ Semi-skilled/skilled labour (200-300)
▪ Technical/managerial labour
▪ 2,000-3,000 sq. meters high-end building
▪ 500 cubic meters water/month
▪ 350 kWh electricity
▪ International air transportation
Country’s attributes▪ Average
▪ Weak
▪ Limited, can’t lease
▪ Supply uncertain
▪ Weak
▪ Available; limited destinations; no charters
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COMPETITIVE TRENDS ANALYSIS
Examples of possible trends in an industry/sector:
▪ End User Trends– Recession affecting major markets
– Zero growth in shipments
▪ Industry Trends– Retrenchment of Japanese firms.
– Expansion into China and India (clusters)
– Outward investment by China and Rep. of Korea
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TARGETING SPECIFIC COMPANIES
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INVESTOR COMPANY SELECTION
▪ Company market and product– Growth statistics
– Market share, presence, export share
– Technology, production process
▪ Company profile– Overseas operations, Asian and/or subregional (e.g. ASEAN/SAARC)
presence
– Corporate alliances
– Size and resources, financial performance
▪ Decision-makers and process
▪ Pre-screening and initial contact
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USEFUL COMPANY DATABASES (I)
▪ Dun & Bradstreet Business Report http://www.dnb.com contains information on the operations, ownership, and business background of US companies
▪ Strategis Web Site http://www.ic.gc.ca/eic/site/icgc.nsf/eng/homesponsored by Industry Canada, presents data in both French and English, and has a wealth of sectoral and other information.
▪ Europages http://www.europages.com provides data on European market trends, sectoral indicators, and company information (500,000) for 30 countries
▪ Speeda https://asia.ub-speeda.com/en provides data and analysis of Asian industries and companies
▪ Unique http://uniquedatabase.in/Indian-Databases provides data on Indian companies
▪ China Company Database http://chinacompanydatabase.com/
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USEFUL COMPANY DATABASES (II)
▪ EDGAR (electronic data gathering analysis and retrieval) system http://www.sec.gov/edgarhp.htm was established by the US Securities and Exchange Commission (SEC)
▪ EMIS https://www.emis.com. A Euromoney institutional investor company that lists over 1.4 million companies from trusted sources in over 250 industries in over 120 emerging markets
▪ Hoovers http://www.hoovers.com offers company profiles and information on company officers for free. Paying members can find additional news and background information
▪ Companies Online http://companies.lycos.com is a searchable directory featuring detailed free information on 900,000 public and private US companies, all with sites on the Web
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BUSINESS DIRECTORIES: ONLINE, FREE AND AT A COST
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INVESTOR COMPANY TARGETING TOOLS
▪ There are different targeting tools to effectively approach potential individual investors
▪ Your IPA can start with the following two components:• CRM Database: For all lead generation measures you need a
database containing companies to target. Linking up with other lead generators (e.g. chambers of commerce, ministries, etc) is a proven strategy to develop a CRM Database
• Personal Relationships: Investment Promotion Managers should develop and maintain personal relationships with decision makers of transnational corporations
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PERSONAL RELATIONSHIPS MATTER!
▪ Ideally, Investment Promotion Managers enjoy a wide network of corporate and governmental decision makers
▪ In most cases corporate investment decisions are kept confidential and personal relationships may help to reveal possible investment plans
▪ Use your personal relationship to extent your network. Make sure you maintain your network regularly– This requires a systematic approach:
• Provide regular updates to stay in contact;
• Manage and use insight information as a result of personal relation;
• Listen carefully, act accordingly and keep promises;
• Whatever is learnt, keep confidentiality.
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AN EXAMPLE OF AN INVESTOR TARGETING DATABASE (CRM)
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REGISTRATION AND STEP BY STEP TRACKING OF PROJECTS
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TRACKING COMPANY VISITS
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CORRESPONDENCE
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CONTACTS
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PERMITS
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INVESTOR SERVICES
INVESTOR TRACKING SYSTEM LOGIC: MILESTONES
System registers and tracks major milestones in the investment project life cycle
Stage is updated as key milestones are reached
Automatic update of system-defined milestones
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▪ Registration of source for all leads
▪ Automatic lead qualification feature
▪ System triggers: Hot, Active or Cold classification based on where investor prospects are within the investment cycle
▪ Automatic “time-out” feature for inactive leads
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INVESTOR TRACKING SYSTEM LOGIC: LEADS ASSESSMENT
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LEAD SOURCE REGISTRATION
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SYSTEMATIC LEAD QUALIFICATION AND ASSESSMENT
The Framework for
Assessment
Timeframe
Probability
Milestone reached
Inactive
Cold
Active
Hot
SUMMARY OF PROSPECT DATA
Telephones and addresses
Contacts for the company
All projects
Project stage and status for each project
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SUMMARY OF ASSIGNMENTS AND ACTIVITIES
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BEST PRACTICE PRINCIPLES
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A focus on a small number of business sectors or functions
The use of up-to-date databases, complemented by market research to pinpoint the relevant managers for contact
The concentration on companies in a relatively small number of sectoral and geographical targets
The application of stringent qualifying criteria to identify target companies
The development of a carefully-defined specific message to approach individual companies
Sustained approaches to targeted companies involving a combination of business and social activities
An approach to targeting both new potential investors AND existing investors (after-care)
Effective monitoring to assess feedback and develop knowledge management techniques
Focus
Identify managers
Small number of firms
Qualifying criteria
Develop unique angle
Sustained approach
New and existing firms
Monitoring
KEY LESSONS - TARGETING
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Targeting must be based on an intelligent sector-based investment promotion strategy
Targeting is not a one-off initiative. It is about sustained approaches and relationship building
Brokers play a key role in investment decisions, and investment ambassadors should be used
Targeting is time consuming and labour intensive
Target sectors need to be re-evaluated periodically. Improvements in the local ‘offer’ or ‘product’ and IPA service should also be continuous
To increase organizational effectiveness, user tools and marketing also need to be in place
Sector based
Sustained approaches
Not just investors
Resource-intensive
Is not stand-alone
Is a learning approach
CRM DATABASE – TARGET GROUPS
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Information and Communication Technology
Information Technology
Software
ERP
Description No. ofCompanies
Companies in Information and CommunicationTechnology (ICT)
Companies with information Technology (IT) as the main activity and/or mixed activities
Companies with Software or Software applications as their core business
Suppliers of Enterprise-Resource-Planning (ERP) Software or software applications
10,000
5,000
2,000
500
The companies in your Customer Relationship Management (CRM) database should be assigned to specific target groups. These are usually sectors, sub-sectors or even broken down into specific products/services
CONCLUSIONS
▪ There are different Lead Generation techniques that vary in intensity and costs
▪ As an IPA you need to use the appropriate promotion techniques given your priority sectors and the likelihood of attracting a new investment project
▪ Involve also other lead generators or “Ambassadors”▪ Targeting is only effective in combination with the right marketing
tools▪ Targeting results increase when the targeting is more focused on
priority sectors and niche markets▪ Targeting is not a one time exercise and requires perseverance,
patience, creativity and relationship building ▪ Do not expect results over night but incorporate 12 – 48 months
time span before targeting becomes effective
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▪ Does your IPA engage in active sector/industry and company/investor targeting and profiling and lead generation?
▪ What database does your IPA use? Is this database of sufficient quality? How could it be improved?
▪ Are costs a constraint to do more investor targeting?
▪ What sectors and companies does your IPA promote/target for FDI? Are these target in line with your countries: (a) needs: (b) competitive advantages?
▪ What are your experiences with giving company presentations and following leads? Have they been successful? If there were failures what were the reasons for this?
DISCUSSION ISSUES
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HANDBOOK ON POLICIES, PROMOTION
AND FACILITATION OF FDI FOR SUSTAINABLE DEVELOPMENT:
http://www.unescap.org/resources/handbook-policies-
promotion-and-facilitation-foreign-direct-investment-sustainable-0
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CONTACT DETAILS UNESCAP
Presentation available at:https://www.unescap.org/events/training-workshop-promotion-and-
facilitation-foreign-direct-investment-islamic-republic-iran
Your questions please?
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