By Paul Cranch, LGAQ Lead - Trade and Investment
Most councils can generate investment leads and opportunities, but mainly fail when it comes to effective and professional handling of investor enquiries.
Once the investor has confirmed interest in a location, the decision to invest will be influenced by the quality of service provided by the council. Efficient case management, thorough research, timely provision of information and effective site visit handling are all key to successful negotiations.
Investors often expect a response to an enquiry within 1-2 days, in accordance with private sector practice. As The Economist Intelligence Unit (The EIU) survey emphasized, governmental support for corporate overseas expansion plays a crucial role across all key areas.
The better the quality of inquiry handling, the higher the “conversion rate” will be (i.e. the percentage of project leads that result in actual investments).
Best practice for US based investment promotion agencies (IPAs) typically aim for a 20% conversion rate, with a 10% conversion rate considered average. But many IPAs struggle to achieve more than 5% conversion, a key reason being weak inquiry handling.
It is difficult to compare, but what you can do is ask your organisation the following questions to keep you grounded in your inquiry handling.
Investors often expect a response to an enquiry within 1-2 days, in accordance with private sector practice.
Inquiry Handling Process - Good Practice
Ownership
1. How many agencies/departments are responsible/involved in project handling?
2. In there one point of contact for the investor?
3. Is there clear ownership of a ‘project’?
4. How is the process managed?
5. Are all stakeholders involved, understand the process and committed?
6. Are there key performance targets for handling investor enquiries?
Investor requirements
1. Is an attempt made to understand investor requirements (‘project brief’?)
2. Is there an effective research and timely information provision to the investor?
Visit handling
1. Who has ownership of the visit?
2. Are senior officials involved?
3. Is there a well-planned process?
4. Is the investor satisfied?
Source: WAVTEQ based on Loewendahl (2001) ‘Bargaining with multinationals.’
You can find more information to assist you investment attraction and facilitation strategies on the LGAQ Member's page.