Economic Development Marketing and Attraction: Communicating Your Community’s Economic Competitive Advantage
Posted by Fred Steinmann
February 1st, 2010, 12:35:20 AMEconomic development marketing and attraction is probably the least understood part of a community’s overall economic development plan. An economic development marketing and attraction strategy is how a community implements its wider economic development plan. Simply put, a successful economic development marketing and attraction strategy can help attract, retain, and expand new and existing businesses, and can help improve a community’s image both inside and outside the community. The marketing strategy should also focus on promoting the community-wide policies and programs designed to support technology-led economic development, small business entrepreneur led development, workforce development, real estate development and reuse efforts, and neighborhood level economic development efforts.
Before I go into the specifics of what a community economic development marketing and attraction strategy should look like, it’s important to remember that “marketing” is not an end in itself. Nor is marketing a panacea that can make up for a community’s shortcomings or the failure to develop and implement a comprehensive community-wide economic development plan that consists of technology-led economic development strategies, small business entrepreneur led development strategies, workforce development strategies, real estate development and reuse strategies, and neighborhood level economic development efforts. According to the International Economic Development Council (IEDC), “…marketing is a tool to help economic development practitioners reach their short and long term economic goals”.
Unlike product marketing, economic development marketing and attraction strives to position the competitive advantages of an entire community. Those with marketing backgrounds will recognize the following ways that economic development practitioners position their own communities. According to the IEDC, economic development practitioners position their own community in-terms of the following factors:
• Product Differentiation: Developing attributes and/or an image that is distinct from other communities such as a skilled workforce, core industries, or unique research and development activities. Also consider physical amenities as they significantly contribute to a community’s overall quality of life – a factor that has become increasingly important to high growth sector firms and industries over the past 15 to 20 years.
• Price Competitiveness: Having a comparatively low cost of doing business includes such things as lower labor and land costs, lower tax and utility rates, incentives that reduce operation costs, etc. Although the temptation is to focus solely on costs, we really want to focus on the “value proposition” rather than just “low cost”.
• Market Focus: Targeting a particular industry SECTOR such as plastics or software, or targeting a GEOGRAPHIC REGION for a particular audience.
Each of these factors needs to be spelled out early in the development of an economic development marketing and attraction strategy. It’s also important that different organizations, agencies, firms, industries, different levels of government, and the public in general be included in the early phases of developing the community’s economic development marketing and attraction strategy. It’s a sad fact that the most expensive and sophisticated marketing strategies often fail because product differentiation factors, price competitiveness factors, and market focus factors were not properly developed early on and are all too often developed by one or two interest groups. A narrow group leads to narrowly defined factors. Narrowly defined factors tend to favor the interests of only one or two groups while ignoring the interests of other groups/industries and the wider community at large.
Of the three factors listed above (product differentiation, price competitiveness, and market focus), “market focus” tends to be the hardest factor to properly define. When developing an economic development marketing and attraction strategy, it is critical to target those companies and those industries who best match the community’s assets and/or competitive advantages, who best coincide with the community’s overall economic development goals, and who have the best investment and growth potential that will help diversify the local and/or regional economy.
Economic development organizations and communities all too often use overly generic marketing phrases designed to appeal to no specific industry or firm in particular. Phrases like “we’re great” or “low taxes” or “mild climate” mean very little to individual firms and industries. It’s important to remember that every industry and firm is looking for something specific when it makes a relocation decision and every new business is looking for a specific reason why they should start a new business in a particular area. For example, high-tech firms want a highly skilled workforce and don’t mind paying a premium for qualified workers. But a large retail store is less interested in having a highly skilled workforce at its disposal. Instead, a large retail store wants a workforce that it can pay comparatively lower wages in order to remain competitive. So a phrase like “we’re great” or “mild climate” doesn’t really speak to the needs of either the high-tech firm or the large retailer.
In developing a community’s or region’s economic development marketing and attraction strategy, it’s important to have a greater understanding of the regional economy and its industries. The more accurately one can identify those industries and firms that best match the community’s existing capabilities, the more accurately one can target their economic development marketing and attraction efforts.
Once the product differentiation, price competitiveness, and market focus factors have been adequately defined, one can then move forward with developing the marketing strategy. Generally, there are five “main techniques” that can be used in the economic development marketing and attraction strategy. They include: 1) advertising, 2) publicity, 3) promotional materials, 4) direct mailing, and 5) personal selling. Because resources will always be scarce, it’s important to determine what specific technique or combination of techniques best suite the budget and needs of the community. The IEDC has established a few easy criteria for determining what marketing technique(s) is best. These include:
• Exposure: Exposure doesn’t necessarily mean reaching the broadest audience. Rather, “exposure” should mean reaching the RIGHT AUDIENCE.
• Presentation: Evaluate each technique for its potential demonstration, visualization, explanation, and credibility.
• Cost: The cost of each different technique varies widely ranging from very expensive to very inexpensive. Set up a budget and stick to it. Remember, marketing is ONE PIECE of the wider economic development plan. Spending all your money on advertising leaves nothing for technology-led development strategies, small business and entrepreneur development strategies, workforce development strategies, business retention and expansion strategies, real estate development and reuse strategies, and neighborhood level economic development strategies.
After the “message” and the “medium” have been determined, it’s equally important to EVALUATE, EVAULATE, and then EVALUATE some more. It’s a sad fact that very little time is spent evaluating the RESULTS of the economic development marketing and attraction strategy. But those communities that treat the evaluation of the marketing strategy with the same degree of importance that crafting the message and selecting the medium are treated with are the communities with the most successful marketing and attraction strategy. Any marketing and attraction strategy should be benchmarked or compared with past performances, with the results of marketing efforts in other communities or regions, and against pre-established “targets” that are established at the beginning of the marketing effort.
According to the IEDC, “Be wary of focusing entirely on job creation as the one true measure of success. Focusing on metrics other than job creation realizes the layered nature of economic development, and that there are other ways to succeed aside from recruiting that one big company”. Successful economic development efforts create mid to high skill jobs that pay mid to high wages and offer individuals meaningful opportunities for general upward mobility. Successful economic development also helps diversify a local or regional economy and positively contributes to a community’s overall quality of life level. Retail jobs are fine. But most retail jobs don’t create mid to high skill level jobs and don’t pay mid to high level wages. Retail development is revenue development; retail development is not economic development. This is why just counting the number of new jobs created is a poor benchmark.
The IEDC lists several different benchmarks, in addition to the number of new jobs created, that can be used to evaluate both the short-term and long-term results of a community’s economic development marketing and attraction strategy. They include:
• Number of new business start-ups created within 1, 3, and/or 5 years of implementing the economic development marketing and attraction strategy.
• Percent of new businesses still operating after 1, 3, and/or 5 years of implementing the economic development marketing and attraction strategy.
• Number of companies recruited and the number of jobs expanded within target industry sectors at the 1, 3, and/or 5 year mark.
• Percentage growth of jobs created at the 125% level of median income. Remember, the goal is to get the highest return on our economic development invested dollars. We want jobs that pay mid to high level wages.
• Number of patents awarded to area businesses, firms, and industries within the established market focus.
The economic development marketing and attraction strategy is vital to successfully implementing a community’s overall economic development plan. It helps craft and communicates the community’s overall goals. It is the “public face” that is put on a community’s economic development policies and programs. But it is also important to remember that any economic development marketing and attraction strategy is just one part of a community’s overall economic development plan. A successful economic development plan drives the marketing effort; in the end, it shouldn’t be driven by the marketing and attraction efforts.



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