Investment targeting and lead generation - UN ESCAP · DIFFERENCE BETWEEN LEAD GENERATION AND...

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


• 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


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


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.


▪ 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


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


▪ 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


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


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


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


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


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


INDUSTRY TARGETING METHODOLOGY 1, CONT.



specific trends


Prescreening using

evaluative criteria

Targets

▪ Skill intensity ratios▪ Technical sophistication▪ Transportation access

requirements▪ Production scale

requirements





specific trends


Prescreening using

evaluative criteria

Targets

▪ Production/technology trends

▪ End user markets trends▪ Customers & suppliers▪ Barriers to entry▪ Other competitive forces




▪ Location of key markets & suppliers

▪ Labour & skills requirements

▪ Facility requirements▪ Transport requirements



specific trends


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:


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


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


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


TARGETING SPECIFIC COMPANIES


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


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/


http://www.dnb.com/

http://www.ic.gc.ca/eic/site/icgc.nsf/eng/home

http://www.europages.com/

https://asia.ub-speeda.com/en

http://uniquedatabase.in/Indian-Databases

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


http://www.sec.gov/edgarhp.htm

https://www.emis.com/

http://www.hoovers.com/

http://companies.lycos.com/

BUSINESS DIRECTORIES: ONLINE, FREE AND AT A COST


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


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.


AN EXAMPLE OF AN INVESTOR TARGETING DATABASE (CRM)


REGISTRATION AND STEP BY STEP TRACKING OF PROJECTS


TRACKING COMPANY VISITS


CORRESPONDENCE


CONTACTS


PERMITS



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


▪ 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


INVESTOR TRACKING SYSTEM LOGIC: LEADS ASSESSMENT


LEAD SOURCE REGISTRATION


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


SUMMARY OF ASSIGNMENTS AND ACTIVITIES


BEST PRACTICE PRINCIPLES


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


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


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


▪ 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


UNITED NATIONS BUILDING

RAJDAMNERN NOK

BANGKOK 10200, THAILAND

TEL: +662-2881234

FAX: +662-2881000

http://www.unescap.org

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


CONTACT DETAILS UNESCAP

http://www.unescap.org/resources/handbook-policies-

Presentation available at:https://www.unescap.org/events/training-workshop-promotion-and-

facilitation-foreign-direct-investment-islamic-republic-iran

Your questions please?


https://www.unescap.org/events/training-workshop-promotion-and-facilitation-foreign-direct-investment-islamic-republic-iran

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