Make sure your message is ‘resonating with the Street’ to remain engaged with your long-term investors, and that your IR strategy is recalibrated to be effective in the current market upheaval. Engagement is the most important tool in the IR toolbox and it can be easily monitored through technology.
These were all tips given by a panel of industry experts in a IR Magazine Webinar, now available to watch on demand.
Panelists said that despite market downturn, companies overall remain very engaged with investors, whether through AI or website communications, virtual investor days, video earnings calls or virtual roadshows. But market volatility means messaging needs to be reconsidered and, as investors’ and analysts’ decision-making criteria adapt, communication tactics need to evolve.
Shari Bento, head of global corporate access at Capital Group, urged IR teams to be more transparent in their communications with the investor community. ‘It’s perhaps time to take a look at that and re-evaluate how you can be more open with investors so everyone has the opportunity to really get to know the company and the current issues,’ she said.
Bento stressed that in the post-Covid-19 world it’s important to prioritize in-person meetings to allow long-term-oriented investors to better understand companies’ products, services and culture. She added that IR professionals can measure the success of a recalibrated communication strategy prioritizing quality over quantity.
Mike Coffey, vice president and head of global partnerships and alliances at Q4, said that for effective targeting, it is important for the senior management team to understand where it sits in the business cycle, and ensuring its targeting efforts are ‘fine-tuned’ is paramount.
‘To manage the right investors, it is important that senior managers – given the rate of inflation and potential recession – have financial profiles that marry with the different portfolios out there,’ he noted. ‘They should look at what their core holdings are, consider the average growth to sales and make sure they’re making the most effective use of management time by targeting the right investors that will fit those profiles.’
Coffey also urged IROs to keep their senior management team updated on the company’s economic conditions and how they are really impacting the business.
As part of their revised strategy to maintain good engagement, IROs should leverage available technological platforms. Managing and updating their company’s website, making sure they host investor days, looking at new technologies such as video earning calls to bring their financials to life and hosting ESG days with investors are all things that should be high on the agenda.
Looking at whether your messaging is working starts with looking at whether targeted investors are responding to the new strategy. That can be measured by looking at website traffic or the number of users opening emails, or even by looking at whether the company’s last video earnings call gained a new audience.
In this regard, Bento said real-time feedback from the investor community is a good sign the company’s communications tactics are effective. ‘Having that feedback to give to your management team, on what a group of investors is advising you to do or would like to see, shows a thoughtful, engaged investor community,’ she pointed out.
For Karl Mahler, former head of IR at Roche, the key to determine the success of an engagement strategy is benchmarking against peers: ‘I’ve always thought you have to perform versus your peers. You can only learn when you have open feedback and when you adjust your strategy. What you learn from the outside is maybe different from your perspective.’