Investment targeting and lead generation 8...advertising that appears only once, so one-shot ads don’t work. Given a combination of the targeting and cost elements of an advertising

Workshop on Promotion and Facilitation of Foreign Direct Investment for

Sustainable Development in Uzbekistan,

Tashkent, 20-21 December 2017

Investment targeting and lead

generation

OUTLINE OF PRESENTATION

� Investor targeting and lead generation

� Targeting specific companies

� Use of information sources on the Internet – on companies,

on alternative investment locations

� Case study: Explore existing ITS system

� Group assignment: developing an ITS for a selected region

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 AssessmentLocation Screening,

modeling & benchmarkingCost 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 GENERATORS

IN 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


Economic and Social Commission for Asia and the Pacific

LEAD GENERATION – MULTI CHANNEL

MARKETING

Mass Mailings

Mass Follow Up

(Call Center) PR-Campaigns

Sector-specific

Mailings

Business

Scenarios

Investment

Seminars

Speaker at

Conference Selective

Individual

Approach

Company Visits

1 – to – 1

measures

1- to -1 MarketingMass Marketing

Different

Marketing

Channels

-Intensity

(costs)

+

Given your priority sectors, you can use various tools to

improve your lead generation process

� 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

INVESTMENT TARGETING PYRAMID


Job Creation Goal

No. of Investments

No. of Project Approvals

Require

No. of Project Applications

No. of Site Visits

Require

No. of Meetings / Presentations

No. of Investor Contacts

Require

Require

Require

Goals

Investments

Investment

approvals

Investment

applications

Investor

location exploration

(“reconnaissance”) visits

Meetings with individual

prospective investors

Investor contacts generated

by promotional activities

1,000 jobs

10 new investments

18 approvals

20 applications

100 site visits

1,000 meetings

10,000 contacts

Source: The Services Group

FIVE PRINCIPLES WHICH DEFINE

INVESTOR TARGETING

1. Target industries and sectors first and then move to active

identification of specific investment projects

2. Carefully planned and managed investor search

programmes

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 your

location a competitive advantage over locations with poor

targeting 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 listPreparation of initial list

Analysis of industry-

specific trends


specific trends

Locational fit analysisLocational fit analysis

Prescreening using

evaluative criteria

Prescreening using

evaluative criteria

TargetsTargets


INDUSTRY TARGETING METHODOLOGY 1, CONT.



specific trends


specific trends


Prescreening using

evaluative criteria

Prescreening using

evaluative criteria

TargetsTargets

� Skill intensity ratios

� Technical sophistication

� Transportation access

requirements

� Production scale

requirements





specific trends


specific trends


Prescreening using

evaluative criteria

Prescreening using

evaluative criteria

TargetsTargets

� 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


specific trends


Prescreening using

evaluative criteria

Prescreening using

evaluative criteria

TargetsTargets

LOCATION REQUIREMENTS FOR EACH

BUSINESS ACTIVITY

Business

sector

Labour

cost

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 significant

Source: 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

Labour

cost

Real estate

cost

Utilities Tax Accessibility Quality

of life

Skilled

labour

ICT and utility

infrastructure

Your

Country/locality2 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


PRIORITIZING IMMEDIATE TARGETS

Electronics Rubber Products

Gems & Jewelry Textiles & Accessories

Information Technology Light Engineering

Priority One

Priority Two

Reactive

Shipping

Tourism & Leisure Activities

Select Minerals

Agro Processing

Dairy Processing

Financial Services

Example

Sri Lanka


PRIORITIZING IMMEDIATE TARGETS, CONT.


Expected

Investment

Expected

Jobs

Year One

Estimates

Year Two Year Three

$177m

8,775

$253.4m

5,850

Realized

Projects 28 40

$329.8m

11,700

52

Example

Sri Lanka

$760.2m

26,325

120

Electronics Rubber Products

Gems & Jewelry Textiles & Accessories

Information Technology Light Engineering

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.comcontains information on the operations, ownership, and business background of US companies

� Strategis Web Site http://www.ic.gc.ca/eic/site/icgc.nsf/eng/home sponsored 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

� STAT-USA – http://www.stat-usa.gov (from the US Department of Commerce)


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


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.


PROS AND CONS OF DIFFERENT

CRM SYSTEMS

Pros Cons

Off-the-shelf

Software

• Excellent value for money

• Rich in functionality

• Long-term support readily

available

• Generic (i.e. created to suit all business types)

• Customization required to make them work for

each organization

• Not all are web-enabled

Shareware • Free of charge

• Easy to set up

• Risky: no guarantee on data and hardware

• Limited functionality

• Minimal support and training available

• Not all are web-enabled

Web-based Systems • Good functionality

• Easy to set up

• Remote access available

• Minimal support and training available

• Subject to internet elements (e.g.; security

breaches)

• Ownership of software and database belongs to

hosting company

Custom-built Contact

Management

Systems

• Created to suit the needs of

each organization

• Good functionality

• Comprehensive support and

training available

• Support and training only available for limited

time

• Pricey to implement

• Maintenance may escalate long-run costs


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. of

Companies

Companies in Information and Communication

Technology (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

Presentation available at:

http://www.unescap.org/events/training-workshop-promotion-and-facilitation-foreign-direct-investment-uzbekistan

Your questions please?


Documents

Investment targeting and lead generation 8...advertising that appears only once, so one-shot ads don’t work. Given a combination of the targeting and cost elements of an advertising