Five Questions to Ask an Industrial Site Selection Firm

The marketplace for industrial site selection services has evolved dramatically over the last 100 years since Fantus pioneered the industry in the early 20th century. Despite their long and successful track record and the emergence of a select few boutique firms, the industry did not mature materially until the turn of the 21st century. 

Since then, industrial companies seeking these services have had quite a menu of options when selecting their site selection partner. Site Selection Group, an independent location advisory firm dedicated to the discipline of site selection, examines why so many have flocked to the industry. Additionally, we want to provide companies with some basic questions to ask when selecting the ideal site selection partner.

Why are large service firms investing in industrial site selection platforms?

Most would assume the answer to this question is that adding a site selection practice is a profitable venture for a cross-functional firm. That is mostly a correct assumption, but not necessarily for the reason most would think. While a site selection practice can be a profitable endeavor as a stand-alone entity, most firms invest in the practice to maximize opportunities for other larger and more lucrative service lines. 

Site selection is the tip of the proverbial sales spear 

To be most effective, site selection practitioners should assist companies with strategy development and planning in the infancy of a potential site selection project. In other words, they should lend their expertise before a bona fide site selection project even exists. The relationships built during this time are extremely coveted by firms looking to sell additional downstream services that typically follow a site selection project (legal, engineering, accounting, and other services).

What questions should a company ask a prospective industrial site selection partner?

1. What are all the services you want to sell me?
   The answer to this question can reveal a potential partner’s true motivations. Is the specialization of site selection a core competency for that firm, or is it just the tip of their sales spear for something else more lucrative? Would you be better served procuring those downstream services based on where the project locates or competitively bidding at a later time?
   
   
2. What investments have you made and what resources do you have that set you apart from other site selection service providers?
   The people, data, and software required to make a site selection project successful are expensive investments for a firm. Has the firm made those investments to adequately deliver the service, or are they faking it? 
   
   
3. What aspects of the site selection process are self-performed versus those subcontracted to partners?
   Successfully locating an industrial project requires a thorough analysis of several unique factors: supply chain and logistics, workforce, business environment, sites and buildings, utility infrastructure, economic incentives, and more. Does the firm really have all that expertise under one roof?
    
4. Do you have any vested interest in a particular state or community or do you represent real estate options?
   If a site selection firm has marketing agreements with certain states or communities, or if it represents specific real estate options, that creates a clear conflict of interest. These firms are essentially incentivized to steer projects toward preferred locations — not necessarily the best ones for your business. While many trusted site selection firms do work objectively with economic development organizations, any such relationships should be fully disclosed at the outset. It's critical to ask: What conflicts of interest exist that could bias recommendations and ultimately undermine the integrity of the site selection process?
   
   
5. Are our interests actually aligned?
   The nuances of a firm’s pricing options will typically yield the answer to this question. How can a firm offer fee flexibility to ensure interests are aligned? 

While not a comprehensive set of questions, these should help companies lay the foundation for their procurement strategy for site selection services. The industry is full of very talented individuals with respectable track records. Site Selection Group recommends taking the time to find the optimal partner for you.