Putting the Business Back in Business Retention (cont.)

If we are doing our jobs properly, economic developers will deliver customized, bottom-line benefits to these business constituents. The metrics can range from workforce training grants or low-interest financing to assistance in obtaining a zoning variance or receiving a façade grant for a downtown storefront. For the customer, these are tangible outcomes that improve the firm’s ability to compete and be successful from our community.

Learning from the private sector

On-line holiday sales in 2006 were expected to rise 20 percent over 2005 levels, growing to an estimated $24 billion.⁵ In less than a decade, on-line merchants such as Amazon.com and Barnes & Noble have completely rewritten the rules on successful and sustainable business models using customer relationship management (CRM) and 1-to-1 database marketing techniques.

Pursuit of customer data in the private sector is only a means to an end. On-line retailers are transforming this data into knowledge and using it to cultivate and maintain strong relationships with select customers. These customers come to expect solutions that are seamless and tailored to their unique needs and circumstances. As customer knowledge increases, so does the level and quality of customer service. The focus is always external, squarely on the customer.

Technology – in the form of CRM and 1-to-1 database marketing – allows vendors to anticipate, rather than respond to, customer needs. It allows vendors to treat each customer differently based on the value that the customer generates. A surprising number of economic development professionals don’t have this intimate knowledge of their customer base, yet a resident business should be a known commodity in economic, community and workforce development circles.

Economic developers have their own unique set of criteria that define “best customers,” including variables such as job creation, competitive wage rates, capital investment, assimilation of technology, spin-off or multiplier effect and industry clusters. However, in many instances we expend valuable time and resources on customers who don’t provide any meaningful return on our investment. Proven CRM and 1- to-1 techniques enable us to define our best customers and give our best service to those companies with the potential to create or retain more jobs and wealth in our community.

Four things economic developers can learn

1. A resident business expects and deserves value each time we interact with them. A question-and-answer interrogation for the sake of the survey is not business retention.

2. No two businesses in your community are the same. Each business has unique needs and potential to generate jobs and capital investment.

3. The more we interact with a business in our community, the more we should know about the business.We should use this knowledge to create highly customized solutions.

4. Business retention is not about data gathering – it is building long-term relationships that give the economic development team an in-depth understanding of the firm, and the ability to customize solutions to solve a problem or seize an opportunity. In short, it’s time to put the business back in business retention and expansion.

ExecutivePulse, Inc., is a business retention consulting firm that assists communities, regions, states and provinces in implementing systematic, sustainable business retention programs. Reach the author at lwardi@e-pulse.net. For more information, visit www.executivepulse.com.

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⁵ The Purdue Retail Institute and Center for Customer-Driven Quality.