Article 4:
Establishing a positive feedback loop with the investment community
By Glen Williams, The Equicom Group
In today's wireless world, there are multiple ways for busy executives to communicate with the investment community. News releases, conference calls, blogs and "Tweets" are valuable ways to deliver company news and financial results to retail investors, analysts, institutions and the media. While these mediums are all effective, and should be considered as elements of a comprehensive investor relations program, they are mostly one-way communication tools. It is equally important to encourage two-way communication with members of the investment community, in order to establish a positive feedback loop, and hear what they are saying to you.
Nothing replaces the personal touch when it comes to taking the pulse of the investment community. Meeting with current and potential investors face-to-face, to communicate your company's key messages, answer questions and address concerns, will always be a key component of a successful investor relations program. A recent study revealed that 78% of business executives prefer face-to-face contact to phone or online communication. Building strong relationships and encouraging open, candid dialogue is an essential part of establishing management credibility, gathering intelligence (on your company and peers), setting expectations, and articulating your company's growth strategy.
Generate Analyst Feedback
Meeting regularly with research analysts not only increases the chances of securing analyst coverage for your company, it also provides opportunities to gather their insights on how your company is perceived by the investment community. Take advantage of your meetings with analysts to do more than update them on your company's progress and plans. Actively engage them to gather information. Carrying out a regular dialogue with research analysts will provide a great source of information on developments and trends in your sector, among other topics.
Conduct Regular Roadshows
Conducting regular roadshows is an excellent way for public company executives to personally connect with a broad cross-section of investors. While delivering a polished, informative presentation is important, so too is gathering feedback from your audience and evaluating its response to your story. Any roadshow should be followed with a brief survey of audience members. This can be done by following up with a phone call and a quick series of questions (e.g. "Did you clearly understand the company's growth strategy?"). Understanding your audience's reactions will help to identify the strengths and weaknesses in your delivery, hone your messaging, and detect and close any perception gaps that are shown to exist.
Perception audits
Consider engaging communications professionals to gather more detailed feedback from your company's key stakeholders. Knowing how the investment community attributes value to your company is critical to articulating your strategy. If your key messages are not clearly understood by the investment community, they may fall on deaf ears. Perception audits conducted by trusted third parties allow companies to gather candid feedback that respondents might be uncomfortable delivering directly to management. Sometimes this information can reveal issues with the Street's opinion of management, shortcomings in the company's disclosure materials, or even a lack of understanding of its strategic direction. The results can also serve as a valuable planning tool when developing your annual investor relations strategy. Performed on a yearly basis, perception audits allow companies to measure the effectiveness of their strategic communications and provide benchmarks against which their progress can be measured.
By taking these steps to engage your key stakeholders, you send a clear signal that their opinions matter, and you are prepared to act on their feedback.
For more information on developing a proactive investor relations program, please contact Glen Williams, Account Executive, The Equicom Group, at 416.815.0700 ext. 272.
