Investor Relations Today
In the successful operation of any public company, marketing is of course vital to attracting consumers and potential shareholders. However, a common mistake made by far too many companies is ignoring another critically important responsibility. Once you reach and acquire consumers in a target market, companies must constantly work to retain that audience.
In order to keep and grow your current base of advocates/shareholders, investor relations is key. Although certain fundamentals of investor relations remain constant, conducting best practices and implementing the right strategies will always be changing.
The most obvious development in this topic is the importance of social media in investor relations. Effective use of social media to provide accurate and up to date information to stakeholders can be the most effective tool for investor relations. Much of the information you want to disseminate can be distributed through social media, and links to additional information can be included on the same platforms. If a company is not using social media to its fullest potential, it is missing out on shareholders, relationships, advocates, and customers.
At all times, regardless of the current economic conditions, all public companies must:
- Build relationships with investors and be certain they are always informed
- Attract new investors of all sizes, helped in part by good investor relations
- Be certain all information supplied is both the most current and accurate
Before making an initial investment decision, potential shareholders must be supplied with accurate and timely information. Without this, the decision about whether to invest is an obvious one. Companies must continually strive to add and refine the storyline to attract new consumers and investors on social media, which involves creativity and persistence.
In the process of growing from a small cap or emerging company into a major player, many businesses start to neglect investor relations. This is a critically important mistake. One of the last places to cut back on expenses is to ignore your shareholders and community. Providing information to investors is not only quicker and easier than ever before, it is also far less expensive. Electrons are much cheaper than stamps.
In addition to the certain need to constantly raise new money for your company, current stakeholders will always look for the best place to invest. A company that does not keep its shareholders informed will likely discover, that people will often treat the lack of communication as a sign of impending bad news and move their funds elsewhere. To a market participant, no news will usually be considered bad news. Even if your company is performing very well, this information is useless if people don’t know about it.
In addition to retaining stockholders through effective investor relations, when attempting to attract new investors, it is important to consider all types of investors. Large shareholders are of course important, but do not forget the small retail investors who accumulate a very substantial portion of outstanding shares. Easy access to any important information must be easily available to all investors. This includes regular communications such as newsletters, company updates, quarterly and annual reports, and investor decks to name a few.
Your company website and social media accounts are the most important contact points with the world. Remember their value and display only the content that reflects the brands storyline and mission.
In addition to maintaining good relations for today’s public markets, the next generation of would-be investors, the Millenials, will soon greatly outnumber all previous generations. One of the ways they distinguish themselves from their predecessors is an overwhelming reliance on social media and other on line formats for all purposes, including investing.