Or wine. Or a good dinner. Or…whatever.
The point I’m making is that IPAs do not live by marketing strategies alone, or even by providing a first-rate investor proposition. Important though these things are (and they ARE very important) they are not enough in themselves to guarantee success in securing FDI projects.
If newcomers ask me (as they sometimes do), “What is the single most important factor in investment promotion?” - I answer with two words.
OK, you have been diligent in formulating a good marketing strategy and you’ve been good at implementing it. You have developed a really competitive investor proposition for your key sectors and you have a good understanding of your key markets. You have also been effective – and pro-active – in investor targeting. So, why the need for relationship building?
Well, because it’s important to realise that companies do not make investment decisions, individuals within companies do. And – hard as it may be to believe sometimes – these individuals are people like you and me, with their own desires, likes, dislikes and prejudices.
Of course, FDI location decisions are usually made on a very rational and logical basis. In fact, the investor usually has a detailed investigative methodology and checklist and a robust process to carry out comparative analysis. But, all of this only goes so far.
It is very unlikely that your country / region has an FDI offering which is so overwhelmingly compelling that it sells itself (if you have, congratulations!). It’s much more likely however that there will be only a few percentage points overall in the investor’s location score between your offering and that of your nearest two competitors.
So, in those circumstances, how can you differentiate your position and secure the project?
Well, by carefully addressing the human and subjective parts of the decision-making process. Through building a solid relationship with the one or two key individuals whose decision will be crucial.
The social aspect of this is very important – more so than many IPA professionals realise. And the time spend on an inward visit is the most important of all.
Stick close to your visitors. Watch their body language – you can learn a lot from this. Know in advance their likes and dislikes. Make sure that their overall experience is a positive and, if possible, an enjoyable one. Make sure that the key dinner of the visit (and there is always one) is in a good venue with a reasonable amount of privacy and the local guests are interesting and engaging. Use the visit, the dinner – and every other available opportunity – to build that crucial relationship.
But why is building this relationship so important? It is, in a word, about trust.
An investment location decision usually represents a big investment by a company – in cash, in time – and in credibility. So those making the decision need to be as sure as they can that it is the right one. But they have only limited knowledge of your location. So – who can they turn to, to provide reassurance? That’s right – YOU.
And they will only place faith in your reassurance if they trust you. And how can that trust be engendered? Right again – by developing that relationship.
So, buy him / her another whiskey, glass of wine – or whatever eases the mood, relaxes the conversation and develops the relationship. You may well find that it will deliver much more than a good evening out.