Running an ASX-listed business, attracting investors and making your shareholders happy can be a balancing act.
Despite the importance of investor relations to ASX-listed companies, many smaller firms don’t have a coherent IR strategy.
When building an investor strategy that works, consider the following five steps:
- Understand your investors
I put this first because so many companies can’t tell me who is investing in them and what their investment goals are. Don’t guess what they want – if you don’t have an IR team who is in regular contact with analysts, retail and institutional investors, then you’re probably getting it wrong.
Consider a perception audit to get first-hand impressions of the company from analysts and former, current, and potential investors. The very process of building the survey and working out who should be contacted starts to help you segment your shareholder register.
Companies come to third parties like CGM Communications to design and implement the perception audit. Not only is it best practice, but your investors are more likely to speak more freely with a third party – it takes the emotion out and leaves you with an independent benchmark for you to base your IR strategy on.
- Build a compelling story
Now that we know our investors – and what they think of our company – it’s time to build a compelling story.
I find it fascinating that companies will invest heavily in marketing to ensure their products and services are communicated in the best possible way to their customers yet fail to excite their investors about the future prospects and opportunities for the company itself.
Any CEO knows their company inside out, but they can sometimes get blinded by the detail. Like any branding or marketing campaign, its best just to tell a story. Excite people with the successes and focus on the type of business you’re building – it’s not always about how many holes you’re digging or the quality of the assay report.
Link the story to your business plan, what your investors are looking for, and then start to paint a vision – what do you stand for? How do you look after your employees? How do you go beyond expectations in the communities you operate in?
Investors obviously want to make money, but they’re increasingly looking to park their money in businesses they can relate to, who do more.
- Set clear objectives
Once you’ve established your story and understand your investors, your next step is to set realistic and measurable objectives. These can take many forms, but your objectives should support and enhance your business plan.
Investor relations is seen as a soft science, but hard objectives can and should be set. These can range from the frequency of roadshows, the number of analysts following the company, improvements to investor perceptions, changes to shareholder composition and diversity, to goals around share price, volatility and volume.
As with the perception audit, using a third party to help identify and establish objectives ensures that they will find the balance between being ambitious and achievable by taking the internal perception of the company out of the equation.
- Communicate regularly
Build a calendar and stick to it. Investors appreciate regular and frequent communication in a way that works for them. One of the easiest ways to build out your calendar is to base it around the financial reporting dates for your company, alongside board meetings and the AGM.
The next thing to do is to map out investor conferences to attend and road trips to undertake during the year. These events provide an opportunity to refresh your deck and update investors on how you’re travelling against your story. These events often attract media, which should be considered when your consultants are mapping out the news opportunities for the year.
Finally, overlay all these announcements and events with a range of communications to your current shareholders. Your story needs to be told in a compelling way through programmed conversations with your largest investors, major announcement emails, a regular e-newsletter, but most importantly, through your digital presence.
Your website should be the centre of your IR communications. It houses your ASX releases, results, and management bios, but it should always exceed your statutory obligations. The website is where you tell your story – so make it shine with regular updates, media clips, photos, videos and social feeds.
- Assess how you’re going
This should be relatively easy after setting objectives in step three of your strategy, but any efforts to measure quality should be encouraged. Assess the success of every roadshow by giving participants a chance to give anonymous feedback. Allow retail investors to ask questions via the website – and make sure you respond.
And repeat your investor perception study exercise every year or so to see how you’re travelling.
At the end of the day, your investors want you to succeed – their opinions and feedback are precious.
CGM Communications works with ASX-listed companies to design and implement investor relations strategies that deliver results. Contact Anthony Fisk for more.