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TN Business Retention & Expansion Course 2013 Day 1 Presentation

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The Tennessee Business Retention and Expansion Course is a one and a half day course which focuses on how to develop, implement and evaluate an effective retention and expansion program. Presentation …

The Tennessee Business Retention and Expansion Course is a one and a half day course which focuses on how to develop, implement and evaluate an effective retention and expansion program. Presentation from Laith Wardi, CEcD, President of ExecutivePulse,Inc.

Published in: Education, Business, Career
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  • 1. Business Retention and Expansion
  • 2. Practitioners Trainers Management Consultants Technology Vendors
  • 3. 6,500 Users in North America Over 250,000 BR&E Visits Conducted
  • 4. “ Today, unlearning outmoded and ineffective ideas and ways of doing things is just as important as learning new ones.” Source: Leslie
  • 5. Where We’ve Been
  • 6. Government
  • 7. The American Recovery and Reinvestment Act was passed into law in 2009. The Act provides $840 billion in funds. Tax benefits account for $300 billion. Contracts, grants and loans for $222 billion. Entitlements for $218 billion. Source: Recovery.gov
  • 8. Globalization
  • 9. Foxconn (the Chinese factory where most iPhones are made) employs 230,000 workers. Over 60,000 of these workers live in company dorms. The same company employs roughly 8,700 industrial engineers. Average wage for production workers is $17 per day and they work 6 days a week/12 hours a day.
  • 10. Green Movement
  • 11. “Cleantech” segments of the economy produced explosive growth during the recession. The clean economy is both manufacturing (26% vs. 10%) and export ($20K vs. $10K) intensive. Green and clean is largely urban. Clusters are the norm cleantech. Wages are 13% higher than median US wages. Source: Brookings Institute
  • 12. Where We Are
  • 13. The Earth Shifted Over Five Years
  • 14. 2013 Recovery!
  • 15. “Our economy is bigger than it was before the start of the Great Recession. Corporate profits are back. Business investment in hardware and software is back-higher than it's ever been. What's not back is the jobs.” Source: CBS 60 Minutes Interview 113-13
  • 16. The percentage of Americans with jobs is at a 20-year low. Just a few years ago if you traveled by air you would have interacted with a human ticket agent. Today, those jobs are being replaced by robotic kiosks. Bank tellers have given way to ATMs, sales clerks are surrendering to ecommerce and switchboard operators and secretaries to voice recognition technology. Source: CBS 60 Minutes 1-13-13
  • 17. Music Yesterday Circa 1950-1970 Circa 1960-1980 Circa 1970-1990 Circa 1980-Present
  • 18. Music Today
  • 19. Retail Yesterday
  • 20. Retail Today
  • 21. Travel Yesterday Circa 1850-2005
  • 22. Travel Today
  • 23. Movies Yesterday Circa 1900-Present Circa 1975-2008
  • 24. Movies Today
  • 25. Common Denominators Rapidly changing markets Assimilation of new technologies Change in workforce composition New delivery methods Fundamental change in customer behavior
  • 26. “We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come – namely, technological unemployment. This means unemployment due to our discovery of means of economizing the use of labor outrunning the pace at which we can find new uses for labor.” John Maynard Keynes
  • 27. “…this is not unique to this recession, it’s actually been a trend we’ve been seeing over the last several business cycles—it’s businesses, once they lay off, they’re actually learning to be so efficient and increase their productivity so much that they can make the same number of goods without as many Source: USA Today Interview with President Obama people.”
  • 28. US Change in Employment 31% 27% 24% 20% 20% 0.8% 1950s 1960s 1970s 1980s 1990s 2000s Source: US Commerce Department: Labor Department
  • 29. A Jobless Recovery The persistence of U.S. unemployment has risen with each of the last three recessions, raising the specter that future U.S. recessions might look more like the Eurosclerosis experience of the 1980s than traditional V-shaped recoveries of the past. Source: Amerisclerosis-The Puzzle of Rising US Unemployment Persistence 99-2013
  • 30. Sobering Facts
  • 31. Sobering Facts
  • 32. Where We’re Going
  • 33. Creating New Jobs… These companies created millions of new jobs in the past few of years. Source: Economic Policy Institute
  • 34. In Growing Markets
  • 35. China’s Explosive Growth Source: National Bureau of Statistics-China
  • 36. Dateline: Detroit, Michigan GM said Monday that it sold 2.35 million vehicles in fast-growing China, about 136,000 more than it sold in the U.S., with China sales surging 29% as an expanding middle class gained wealth. Sales in the U.S., including heavy-duty vehicles, rose 6.3% as GM continued to rebound from its 2009 stay in bankruptcy protection. Source: USA Today , 1-25-2011
  • 37. This is a very exciting development, because China is growing tremendously. It's the largest automobile market in the world. If you look at the projections this last year, in 2010, we had 74 million vehicles sold. Our projection is in 2020, that'll move to 112 million vehicles. In China alone, it'll go from 18 million, which is about 25% of the entire market in 2010, to 32 million in 2020, which would be 28% of the market. Solid markets in the Americas, very solid markets in Europe, and then tremendous growth in Brazil, in Russia, in China. Ford's strategy is to serve all these markets and also to utilize our resources worldwide so we have more global platforms. Source: USA Today-7-18-2011 Interview with Ford CEO, Alan Mulally
  • 38. Source: Visual-ly 2012 Global Car Stats
  • 39. Senior General Motors officials forecast that sales in China could top 35 million annually by 2022. That’s more than double the peak of the American market nearly a decade ago. “No market is more critical than the China market for us,” Tim Lee, president of General Motors’ International Operations, told reporters. You may hear the same thing from other manufacturers, whether Volkswagen, Toyota or Ford. Source: The Detroit Bureau April 2013 Car Sales Defy Weak Economy
  • 40. US Hiring Dilemma What is important about this debate is that if most of what's holding back a faster improvement in the unemployment rate is structural in nature — i.e., a skills mismatch that will only be corrected via retraining of the workforce and/or the gradual improvement in the housing market—then the Fed is ill-equipped to deal with this problem," RBC Capital Markets said. "No amount of quantitative easing will make the gargantuan amount of unskilled labor supply more employable." Source: NBC News 3-14-13
  • 41. US Growth Trends 2002 to 2012 - Growth in Employment 12,566,352 Stage 1 (2-9) 825,290 2,246,741 -4,666,501 Stage 2 (10-99) Stage 3 (100-499) Stage 4 (100-499) Source: YourEconomy
  • 42. US Skills Gap “The problem of the looming retirement of highly experienced workers has been aggravated by the fact that new recruits tend to be far less technically skilled than entry-level workers were decades ago. ” Source: Rick Stevens, Senior VP of Boeing
  • 43. Bigger Is Not Better “It get you bragging rights…but that’s about it. Being biggest in the world is not necessarily an advantage to anyone. GM was number one for something like 75 years and then went into bankruptcy. What’s far more important is sustainable profitability.” Source: Aaron Bragman, IHS Automotive
  • 44. Population Realities 12% 30% Baby Boomers Youth Other Age Groups 33% Retired 25%
  • 45. In the Driver’s Seat Labor demand greatly outpaces supp Skilled, educated workers dictate term Bigger firms ‘win’ over smaller ones Urban metros ‘win’ over rural areas
  • 46. Three Ways to Grow Your Economy Entrepreneurial Development Business Recruitment Business Retention/Expansion
  • 47. “When it comes to generating new jobs, it's existing companies - not new startups - that have the leading role. New startups are often billed as the stars of economic growth. Yet it's actually existing, expanding companies that contribute most to U.S. job creation. In fact, from 1990 to 2008, existing companies generated 71 percent more new jobs than startups.” Source: 2012 Donald W. Walls, PhD. Walls & Associates
  • 48. Over 15,000 ED organizations chase fewer than 200 major business relocations or expansions annually. This causes ED Inflation… Mark O’Connell—OCO Global
  • 49. He (Bill Taylor) said the recruitment of new industry is going to be more targeted based on those industries the state needs. He said a key part of the work needs to focus on helping existing companies expand because 75 percent of job growth in Alabama comes from those companies and, in some counties, the figure is 100 percent. Source: AL.com Rotary Club of Birmingham Speech 222-12
  • 50. Business Retention Yesterday
  • 51. Business Retention Today
  • 52. Three Parties Three Perspectives
  • 53. Old Company Perspective
  • 54. New Company Perspective
  • 55. Old Community Perspective
  • 56. New Community Perspective
  • 57. Old Sponsor Perspective
  • 58. New Sponsor Perspective
  • 59. “...Very simply, two things: communication and action. If a community takes the time to talk with a business, to understand its concerns, risks, opportunities and challenges, it will understand exactly what it takes to improve business. Then it needs to act on what is has heard. The company also has the responsibility and opportunity to engage stakeholders in a proactive dialogue.” Source: Area Development-Aug 2012 Interview with David Trebing, GM-State/Local Relations, Daimler AG
  • 60. “...The best economic development tool is very simple: volume. That happens when all stakeholders focus on building a globally competitive product in a globally competitive location by a globally competitive workforce.” Source: Area Development-Aug 2012 Interview with David Trebing, GM-State/Local Relations, Daimler AG
  • 61. VALUE
  • 62. The “S” Word
  • 63. Survey-based BR&E is not agile enough for globally competitive markets and companies today.
  • 64. A Static Approach…
  • 65. Trends Today…
  • 66. Retention in 2013… Everyone is “rediscovering” BR&E.
  • 67. Bigger is Better… Regional, State and Provincial programs are now the norm.
  • 68. Branding is In… The best programs use a common brand name.
  • 69. Collaboration is Key… Retention is now being viewed as a team sport.
  • 70. It’s About Workforce… Most programs are being driven by workforce development needs.
  • 71. Leveraging Retention… BR&E is now the “XFactor” in business recruitment and entrepreneurial work.
  • 72. Why Retention?
  • 73. It generates 70-85% of all jobs and investment impact in your trading area—regardless of your success with recruitment and entrepreneurial development
  • 74. It allows you to interact with, and get feedback from, your actual customers—those businesses with an intimate understanding of your market area
  • 75. It is up to 10 times cheaper to keep and grow resident firms than to attract or start new ones
  • 76. It provides leverage— facilitating smart recruitment and entrepreneurial development
  • 77. It is a “team sport” that facilitates a cohesive and collaborative approach to economic development
  • 78. It drives creation of relevant policies, strategies and programs—all with impact beyond existing industry
  • 79. It takes the focus away from highly publicized recruitment activities that hurt local business in any trading area
  • 80. It raises the bar for a market area by helping companies become globally competitive.
  • 81. ROI—From a Single Company 250 Jobs @ $62,000 each $15.5 million annual payroll $825,000 state /provincial tax revenues $725,000 city/county tax revenues Jonathan Sangster—CBRE—Area Development/Feb-Mar 2010
  • 82. ROI—The Multiplier Effect Subject Company Jobs Payroll State Tax Local Taxes Total Impact 250 $15.5M $825,000 $725,000 893 $40M $2.3M $2.6M Jonathan Sangster—CBRE—Area Development/Feb-Mar 2010
  • 83. Induced Jobs Indirect Jobs Direct Jobs
  • 84. “A job retained is just as good as a job gained.” “Communities and states that recognize the value of retention incentives during challenging times may have an advantage in the competitive to retain their operations. Jonathan Sangster—CBRE—Area Development
  • 85. Objective, Outcomes & Benefits
  • 86. Objective Strategically assist high value companies to become agile, adaptive and globally competitive
  • 87. Outcomes Thank the CEO (show the love) Learn about the company and match needs to available programs Use CEO views and opinions to create a better business climate
  • 88. Benefits Directs ED resources to your ‘best’ firms Assists firms in becoming globally competitive Creates a more accountable ED ‘system’ Galvanizes the ED Community Stretches limited ED resources
  • 89. Elements
  • 90. Sales/Marketing Social Media Business Walks Focus Groups High Value Content Traditional Outreach 100+ 1
  • 91. A Dynamic Approach…
  • 92. Customer Service The dynamic network of local, regional and provincial/state resources who provide cohesive and seamless service to the BR&E program.
  • 93. Management The convener, point of control and driver of the entire process.
  • 94. Client Data Repository The customer relationship management (CRM) system that holds data, provides for client care and analytics.
  • 95. One-To-One 101
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  • 97. Customer Relationship Management (CRM) Not a technology or set of technologies Source: Peppers and Rogers
  • 98. Customer Relationship Management (CRM) A continually evolving process which requires a shift away from the traditional business model of focusing internally. Source: Peppers and Rogers
  • 99. Customer Relationship Management (CRM) An approach that takes you toward customers--backed up by a thoughtful investment in people, technology and business processes. Source: Peppers and Rogers
  • 100. "If the only tool you have is a hammer, you will see every problem as a nail." Source: Abraham Maslow, Motivational
  • 101. Competitive Advantage “The only true competitive advantage comes from the understanding you have of your customer that your competitors don’t…this information has to come from the customer.” Source: Peppers and Rogers
  • 102. Customer Equity Equation “The more effort the customer invests, the greater their stake in the product or service. Now the customer finds it more convenient to remain loyal, rather than re-teach a competitor.” Source: Peppers and Rogers
  • 103. The Learning Relationship Identify Differentiate MVC Customize MGC Interact Source: Peppers and Rogers
  • 104. DETROIT - General Motors Corp.’s auditors have raised “substantial doubt” about the troubled automaker’s ability to continue operations, and the company said it may have to seek bankruptcy protection if it can’t execute a huge restructuring plan. Source: MSNBC.com News Services/ March 5, 2009
  • 105. Managing Expectations Malibu CTS $20K $60K
  • 106. Sloan’s Mantra “A car for every purse and purpose.” Source: Alfred P. Sloan
  • 107. Ladder of Success Cadillac Buick Oldsmobile Pontiac Chevrolet
  • 108. Making it Easy A3, A4, A5, A6, A8
  • 109. Making it Difficult Aveo, Cobalt, Malibu, Impala, Vibe, G6, Grand Prix, G8, LeCrosse, Lucerne, CTS,
  • 110. Effort = Reward (ROI)
  • 111. “Old” Marketing Model The “old model” treats all customers the same. The endgame is increased market share.
  • 112. “New” Marketing Model The “new model” treats all customers differently. The endgame is increased share of the customer.
  • 113. The Good, The Bad and The Ugly “We want to keep the good, grow the bad and the ugly we want nothing to do with.” Source: Business Week
  • 114. Reward Zone customers account for only 30% of transactions at Best Buy but spend more than twice as much as regular customers. ($850 versus $400 per year)
  • 115. “It is controversial to redline customers. But done correctly, it really is saying I have a limited pool of money and I need as a business person to spend that money where I can get the most return.” Kelly Hlavinka--Marketing Consultant for Best Buy
  • 116. The Learning Relationship The customer tells you what they want and when they want it. You tailor a solution for them that is seamless.
  • 117. The Learning Relationship Operate on a “need to know” basis. KNOW EVERYTHING ABOUT YOUR CUSTOMERS.
  • 118. All Firms 59% have a formal customer retention program in place. Grizzard Performance Group
  • 119. B-2-B 58% have a formal customer retention program in place. Grizzard Performance Group
  • 120. B-2-C 71% have a formal customer retention program in place. Grizzard Performance Group
  • 121. Banks 90% surveyed track, analyze and report defection levels. Bank Marketing International
  • 122. Who’s the Customer?
  • 123. Drucker on Customers and Resources “In an economic cause, one asks: Is this the best application of our scarce resources? There is so much work to be done. Let’s put our resources where the results are.” Peter Drucker Managing the Non-Profit (1992)
  • 124. “Good” Money Money that flows into a local economy from competitive companies that sell outside the local economy. David Morgenthaler-Morgenthaler Ventures
  • 125. “Neutral” Money Money that circulates within the local economy. (Sometimes referred to as the multiplier effect.) David Morgenthaler-Morgenthaler Ventures
  • 126. “Bad” Money Money that leaks out of the local economy in the form of people or purchases. David Morgenthaler-Morgenthaler Ventures
  • 127. Tennessee Trends 2002 to 2012 - Growth in Establishments 148,7685 5.6% 3,025 -1.4% Resident Firms Non-Resident Firms Source: YourEconomy
  • 128. Tennessee Trends 2002 to 2012 - Growth in Employment 163,917 1% -90,445 -1% Resident Firms Non-Resident Source: Firms YourEconomy
  • 129. Tennessee Trends 2002 to 2012 - Growth in Establishments 106,136 6.0% Stage 1 (2-9) 332 .1% Stage 2 (10-99) -130 .3% Stage 3 (100-499) -104 -1.8% Stage 4 (100-499) Source: YourEconomy
  • 130. Tennessee Trends 2002 to 2012 - Growth in Employment 234,957 3.8% 21,916 .2% 4,562 .1% -134,708 -1.9% Stage 1 (2-9) Stage 2 (10-99) Stage 3 (100-499) Stage 4 (100-499) Source: YourEconomy
  • 131. Think Vertically
  • 132. ? Job Quotient “Best” Customers Technology/Innovation Quotient ?
  • 133. ? Sales Quotient “Best” Customers Façade/Building Improvement Quotient ?
  • 134. ? “Green” Quotient “Best” Customers Public Investment Quotient ?
  • 135. ? Export Quotient “Best” Customers Cluster/Sector Quotient ?
  • 136. Your Best Bet Customers Create wealth by exporting goods/services (good money) Provide quality jobs and high wages Generate capital investment in the community Incorporate technology into products and processes Are eligible for ED programs and resources Want our help to stay and grow Grown locally
  • 137. Avoid the “comfort level syndrome” Seek out firms that have “fallen through the cracks”
  • 138. “If you can’t measure it, you can’t manage it.” Peter Drucker
  • 139. What You Can Measure Number of customer visits (wk/mo/yr) Number of referrals made Number of referrals (closed vs. open) Percent of repeat business
  • 140. What You Can Measure Number of program partners Average response time by partners Recognition rating of program name Buy-in among key stakeholders Number of tangible success stories Longevity of program
  • 141. More Measurements Quality job creation/retention Investment in technology/innovation Market diversification Cost mitigation Increased profitability Increased productivity
  • 142. Measuring Results See all of your customers at least once ee all of your good customers regular Uncover and meet/exceed their needs, wants and expectations Put into place policies and programs th anticipate their needs

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