Discussions about Canada’s inflation and the Bank of Canada’s surprising decision to maintain the interest rate dominated business news in Canada recently, which represented opportunities for companies to publicly demonstrate their expertise on the topic. Reporters wanted expert sources as fast as possible for stories, stakeholders wanted information as soon as possible, and increasingly shrinking attention spans demanded quick statements as people cycle through commentary and news-of-the-day at lightning speeds. Markets moved fast and companies needed to match the pace.
Waiting until the Bank of Canada’s announcement at 10 a.m. to commit to giving commentary was already too late for many outlets across the country. They wanted experts locked up ahead of time and ready to go for a story they already knew they would file no matter what the announcement ended up being. This same urgency is needed for financial analysts, investors and other members of your audience when it comes to your investor relations.
Gone are the days of waiting for conference calls and face-to-face meetings to provide the financial results of your company and nothing more. Your company should be ready to give their perspective at a moment’s notice with a plan of action and consistent messaging for your stakeholders. Your company should also have a viewpoint on industry issues, work-from-home policies, a crisis plan prepared well in advance of when it is needed and a strategy on how to best communicate with its investors to make the most of your investor relations and spread your messaging to as many communication channels as possible.
Outside of quarterly reports
Modern investor relations need more than just reporting on financial performance. Developing a fulsome package to reach your base of supporters and believers in the company’s mission gives you an advantage over competitors who fail to make communications a priority. Your strategy represents what guides you, what you aim for, and what you celebrate as the catalyst of success in good quarters and what gives you confidence through bad quarters. The more you are about to repeat this across your investor materials, including media appearances, the more likely it is people will retain and internalize what you want to say.
For investors, effective communications allow them to make informed decisions. Putting your legally required reports out to the public and hoping for the best is a missed opportunity because investors can’t value what they can’t see. A successful IR program requires transparency, the ability to bring business performance to the forefront and clear communication of the company outside of numbers alone. Even during downturns and negative events, it is important to keep communicating so you can own the story and messaging instead of hoping it goes away or no one discovers it. The intent is not to create an inflated share price, but to increase investors’ confidence in what you are doing.
You need to reach your audiences where they are as part of this. Whether it is thought leadership on your website or social media, interviews with news outlets or materials promoted through advertising, there are opportunities to spread your messaging and reiterate your strategy across a variety of communications channels. The easier it is to find your content and the more regularly you communicate, the better.
We conducted a survey in partnership with Maru as part of our recent 10th Anniversary celebration that revealed the benefits of diversifying these communications channels. Thirty-nine per cent of Canadians indicated there are sources of information they consider to be less credible because of the pandemic. Fifty-five per cent of respondents said established news media as the most credible sources followed by public health agencies and government. Only nine per cent of respondents trusted social media platforms or online content of experts, e.g., blogs and videos. You need to reach people from sources they consider to be credible, and a wider array of sources increases the probability you will reach them in a way they trust.
Supplementing your IR program with media relations, crisis training sessions, a constant stream of new announcements, conference calls, internal communications, meetings with investors and CSR strategies are all important to help effectively reach your stakeholders through these channels.
Evaluate, adjust and respond
Ideally, two-way communication between company and street and the feedback received will help the constant adjustments needed in an IR strategy. Knowing the demographics, values and preferred communication channels of your stakeholders will allow you to better match how they receive information. This also allows you to gather the importance they attach to different factors of the company and adjust communications to better reflect the company’s circumstances and long-term value. It is up to the company to better explain their objectives if investors don’t understand—not on investors to keep on digging until they have a breakthrough.
The priorities of companies and investors are often different from one another. This is often expressed as the friction between the longer-term interests of the company and the shorter-term interests of investors as both try to maximize their value to stakeholders. It is easier to smooth over the pressure from a worse-than-expected quarter if the long-term plans of the company have been continuously reinforced over the course of months and years in ways they understand and prefer. Very few people will read your press releases or investor decks from front to back, but they will remember tidbits from their preferred channels: a sound bite from a media interview, a report from their preferred paper or a tweet they saw from a financial analyst they follow are a few of the many examples possible.
Building trust in the management of a company is often the result of creating messaging based on the stories that the c-suite already know. The ability and competency demonstrated from large events and regular work are often too obvious to those who live it on a day-to-day basis to recognize, but not apparent to those who can only review the company based off its external communications. This not only demonstrates the competency and purpose of a company, but that decisions are being made for explicit, consistent purposes that will inevitably benefit shareholders. Bridging the gap between what a company already knows and what its investors do not is easier with effective, experienced experts—investor relations professionals.
K&P’s team has progressively expanded over the course of the pandemic and will continue to grow with the hiring of a new Account Manager for financial and technology communications. To learn more about K&P’s investor relations capabilities and successes, see our latest client case studies here.