A View from The Economic Development Profession’s Front Lines
In 2015, an estimated 5,400 business location decisions were announced in the United States, accounting for more than $166 billion of capital investment and more than 402,000 new and retained jobs, according to the 2016 edition of Ernst & Young’s “U.S. Investment Monitor”.
Capturing an increasing share of these projects is the charge of nearly every economic development organization (EDO) and is often the benchmark against which the success of the organization and its leadership is measured. However, developing a continuous pipeline of qualified leads, and ultimately winning more projects, is a never-ending challenge for even the most experienced economic development professionals.
Development Counsellors International conducted an online survey over a two-week period in August, 2016 of EDOs representing the largest regions and cities, (populations over 200,000) across the U.S. to collect the latest information on how EDOs are approaching their lead generation activities and filling their prospect pipelines. A total of 24 responses were received with 70% representing cities/regions with populations of more than 500,000. We sincerely appreciate the time and effort that these organizations took to answer the detailed questionnaire.
Among the questions asked:
- Are more jobs, and investment, being created by the expansion of existing companies or by business relocation projects?
- How is the share of international versus domestic leads changing?
- What activities and tools are most effective in building the pipeline of qualified leads and projects? And which lead sources are increasing or decreasing in delivering new business opportunities?
The results show how the lead generation landscape is changing and how EDOs are reacting to these changes. The tools and strategies that were previously used to keep project pipelines full – while not obsolete – may not be as effective as previously believed or are being replaced with more effective strategies. EDOs are always under scrutiny to demonstrate a return on investment and while not abandoning traditional methods of lead generation are focusing on long term relationships with prospects identified through more strategic and targeted research.
Below are a few key findings from the report. For insight on the full list of findings, make sure to download the report.
Retention Projects Outpace Attraction Projects by a Factor of 2.4 to 1
While every community hopes to announce the next high-profile, headquarters relocation or automotive manufacturing project, survey findings reinforce the importance of working closely with existing employers to explore expansion opportunities. Respondents report, over their most recent complete fiscal year, a significantly higher share of expansion wins/announcements than those created through new company location projects.
On average, expansions of existing companies secured by a single economic development organization account for more than twice the number of wins/announcements from new company projects.
The Average Economic Development Pipeline Consists of 56 Projects
The survey provided an operational definition of a “project” as “a company that has narrowed the field to a short-list of potential communities.” Respondents were asked “On average, how many projects do you have in your pipeline?” EDOs reported having anywhere from an average of 10 to 155 projects in their pipeline. Across all respondents, the project pipeline average was 56.
Top Sources of Qualified Leads
Sources of qualified leads were spread across five categories: site consultants and real estate brokers (29%), internal business development teams (26%), state economic development organizations (20%), direct company inquiries (19%) and external lead generation companies (2%). Other sources of leads (4%) shared by the respondents included referrals from utility partners, multipliers from other relocation projects, trade show relationships and existing company referrals.
Changes in Qualified Lead Scores
Respondents were asked their perception on whether the number of qualified leads from various sources were increasing, decreasing or staying the same. The percentage of leads resulting from internal business development teams, direct company inquiries and referrals from site selectors and real estate brokers were perceived to be increasing. Referrals from state EDOs and external lead generation companies were the only categories found to be decreasing.
Economic developers are expected to produce strong results for their community in the form of new jobs and capital investment and there are a range of tools and tactics that could increase the chances of success. Respondents shared several lessons learned when asked the question “You are scheduled to speak at a meeting for your community’s public and private sector leaders. They want to know how your organization can increase the number of qualified leads, projects and win/announcements in the year ahead. In less than 100 words, what would you tell them?”
To increase the number of qualified leads, projects and win/announcements, responding EDOs are planning to…
Interested in learning more? We’d love to explore how we might assist your community:
Andrew T. Levine
President | Chief Creative Officer
Development Counsellors International
215 Park Avenue South, 14th Floor
New York, NY 10003
Phone: 212.725.0707 Ext. 107