This is the great recession, right? No one is moving on anything, right? Besides, Memphis is an extraordinary city with everything to offer and if there was a move to make it would be here, right?
Then how is it that over only two weeks in July, Olive Branch, Mississippi, took the gold medal in every category?
Soladigm announced a new 300 employee operation. Hamilton Beach will move 125 jobs from Memphis south of the boarder into Mississippi. Methodist was approved for a 100-bed, 480 employee hospital. And, Grant Homes launched a 109-lot subdivision.
At Smart City Memphis we debate incentives and political baggage, crime and community, brains vs. brawn, expansion patterns vs. growth boundaries, venture capital and business retention. We know economic development is supposed to be deep, complex work. There are experts in the field that tell us how hard it is.
Well, as someone who spent six years working very closely with many Magnolia State economic developers, real estate professionals and business leaders, I’d like to share a few of their secrets. You can decide how hard it is to really do this.
Mississippians know how to build relationships
Maurice Joseph, a Mississippi real estate investor, gave me the best advice I have ever gotten. He told me one day regarding a prospect, “Don’t write them, don’t call them, go see them.” These guys get to know you before you know you want to move. They know what you need, how much you can spend and where your grandmother goes to church before you have ever mentioned expansion. They have done things for you, unsolicited, that have helped you personally and professionally.
When the day comes that you do consider a big move, surprise, surprise, here is your buddy with the perfect place for you. You don’t notice the peer pressure, the brochures or any of the other fluff because you are being asked to buy something they already know you want.
And you know this is a two-way street. When I say relationship building, I mean it. These people become your friends and that makes it real easy to do business.
Mississippians show well
Leland Speed, a national real estate investor from Mississippi, puts flowers in the bathrooms of every one of his properties. When Governor Barbour asked him to be the pro-bono director of the Mississippi Development Authority Mr. Speed went on a statewide tour visiting every single rest stop demanding that they be beautiful representations of his state.
This might sound nuts. But you don’t have to talk about burglaries or maintenance problems when management demands this level of detail. You don’t have to sell someone on having the best when there is a bouquet next to the urinal.
This also lends itself to a brief mention of marketing, enthusiasm and interest.
Take this test: Do an internet search for Mississippi advertising, marketing or public relations firms. Do the same for Memphis firms. Randomly pull five or ten web addresses from each. Compare them and decide which community has the most creative minds, latest technology and enthusiastic spirit… and what will they charge you to share it?
Mississippi brings out the big guns
Olive Branch isn’t attracting this business by itself. The Capitol is behind them. From new roads to utility expansions to job training to income tax rebates, this is largely being handled from Jackson. But that isn’t the most important part.
Having the Governor call on you and offer these things casts the line. Having another businessman in the area call on you and tell you a story about how the Governor helped his business when they were once in a bind sets the hook. Having the mayor call on you with a package of pre-approved applications and incentives reels you in. The real estate developer just has to show up with the hammer and nails because the other work is being done for him.
I belong to both the Memphis Rotary Club and the Kiwanis Club of Memphis. These people are friends, business partners and true community leaders. I took an informal poll of about 20 of them this week by asking if they could name a Memphis, Shelby County or Chamber economic development employee. Most answered no. If anyone would like to get close to these potential prospects, I can get you an application.
When the economy is slow there are some things winning communities do. They work hard on getting to know their existing businesses, defining their future needs and discovering who might be complimentary to them. They put together inspired armies of local cheerleaders. Then they tell the world what they are doing. Some things don’t require expensive initiatives or time consuming planning.
Step One – Make Friends
We have to build our relationships. And we need to do it beyond our comfort zones, outside of our circles and with some people we may not understand.
Get to know others in business. Practice selling to our friends. And ask them to commit to this city.
Antonio Ubalde and Eric Simundza did research for and published Economic Development: Present and Future. Below are their top five marketing strategies (out of 16) based on effectiveness:
* Out of town meetings with businesses
* Site selection consultants and familiarization tours
* Public relations
* Special events
Four of the top five are relationship-based. They either start with a relationship or are designed to build one.
We keep hearing about the plight of One Commerce Square, the largest building on our skyline that is over half-vacant. What if the owner or leasing agent was a member of Rotary or Kiwanis and had been building a personal relationship with several hundred potential prospects? What if an economic development official had been doing the same?
Step Two – Help new friends fit in
We have to deploy our team. That team needs all of the right information to make decisions and help others make decisions.
Do we have a team of influencers, business peers and, frankly, people it is hard to say no to? Do they fully understand what happens to this community when they make factory decisions? Do they understand how many other people they do business with nationally that could be prospects for our community? Are they armed with the knowledge and determination to recruit for us? Do they feel like this is an important part of life in a community, a last desperate measure or does that even matter?
Step Three – Give friends the right resources
We have to put our money where our mouth is.
In the Ubalde & Simundza work, they found that organizations that had an economic development component spent only around 10% of their budget on actual economic development marketing. Of that 10% budget, over half was spent on strategies that were the least effective, 17% was spent on the important portal (Internet/Website) and only 30% was spent on the other four most effective strategies.
If economic development agencies don’t put their efforts and dollars toward what actually builds business then the communities that do will continue to steal victories from us. If our most important figures, leaders and ambassadors aren’t willing to commit themselves to this effort, then more and more of their neighbors will move farther and farther away.
We need a movement that can start with very, very simple tasks. Memphians must re-learn how to build meaningful relationships. We must use those relationships to strategically tackle economic development issues. And we must start deploying the necessary resources to get the word out.
And in all honesty… this starts with every small business person. The initiative can be ours. It doesn’t have to come from City Hall, The Shelby County Office Building, a Chamber or a club.