Data-Powered IR — A New Approach to Investor Relations
The field of investor relations (IR) is undergoing a profound transformation. While the traditional avenues of shareholder communication remain indispensable, modern digital communications have emerged as a driving force in redefining how companies engage investors.
Haystack Needle has been at the forefront of this paradigm shift, guiding clients toward a robust digital presence that fosters immediate and interactive exchanges with their investment community. Creative Director Zach Niles continues his series of interviews with CEO Townsend Belisle to discuss the evolving landscape of investor relations communications.
Zach: We’ve worked with investor relations a lot over the years, but the specialized field seems to be shifting. Can you speak to that?
Townsend: The goal of investor relations is to demonstrate to shareholders the value of their investments and show how the company’s growth plans are coming together to increase profits. But it’s also about the dance of managing investors’ expectations, clearly explaining any drops in value and the strategic pivots the company is planning to improve performance. Good IR teams balance a comprehensive understanding of finance with enough communications savvy to translate complicated financial data to all levels of investors in language that they can easily digest.
Traditionally, IR teams have relied on a limited quiver of communication tools, which made for highly curated and slow-moving information sharing. These include:
Quarterly Earnings Calls — Often more like semi-scripted webcasts for investors, these calls include presentations from the CEO, CFO, and IRO (Investor Relations Officer) with a shareable deck that gives investors just enough insight into the business to have confidence the company is moving in the right direction. Since they happen each quarter, it’s more of a macro view of the company without getting too in the weeds.
Investor Day Meetings — These are large, in-person, and online events that happen once a year or every other year. At these events, executives perform a deep dive into the state of the company while laying out a vision for the coming years and the strategies they will use to realize that vision.
Press Releases — For urgent or breaking news, IR teams rely on press releases and other forms of earned media to get the word out. Working with a PR agency, they encourage journalists to cover events that might affect investors.
As attitudes about C-suite accessibility and company transparency have changed, people want to feel more connected -- not just to the celebrities they admire but also to the companies they invest in. IR teams are quickly realizing that these formerly walled-off forms of communication aren’t cutting it for their audiences - while also recognizing the strategic advantages of more direct, consistent, and measurable contact with their investors.
Zach: Interesting, so what are some new tools that Haystack Needle encourages IR teams to employ?
Townsend: The brass ring in modern communications is direct, measurable contact with one’s audience. It’s imperative that IR teams invest heavily in data-forward approaches to communications.
Dedicated IR Website
First and foremost, we recommend companies establish and maintain an optimized IR website to serve as a resource center for investors. A good IR website encourages investor interaction while providing the IRO valuable insights such as page visits, engagement rates, and click-through rates that can help companies better understand investor interests.
Unfortunately, many public companies do not pay enough attention to their IR websites, providing minimal information, which fails to engage investors effectively. They’ve missed the opportunity to learn what messages resonate or do not resonate. It’s a critical misjudgment.
Optimized Search Results
Another step we take with clients is optimizing their search engine results (SEO). This diligence ensures that the company’s communications are featured prominently when investors search for their company or ticker symbol. Optimal SEO instills investor confidence in the company's competitiveness and gives them deeper insights into its activities. Owning the search results allows better control of communication dissemination and boosts activity on the IR website. It's important to note that search is a reactive channel, where you're not pushing information to investors but ensuring it's readily available when they search for it.
Dedicated IR Social Channels
To proactively engage with investors, IR teams must embrace social media and create IR-dedicated channels, specifically on LinkedIn and X (formerly Twitter) and other platforms, depending on the sector and investor profile. These platforms offer direct communication, enabling IR teams to control the company narrative and swiftly share information without intermediaries.
Social media's scalability is a key advantage here — even a basic presence shows attentiveness to discussions about the company. It’s also a space to share existing content, such as excerpts from earnings calls and investor days. More ambitious IR teams can grow their following by posting and resharing relevant, insightful content and engaging with comments. The heightened activity leads to a larger audience, granting IR teams greater leverage to get in front of company news.
Zach: Can you give me an example of how social media can help a company during a crisis?
Townsend: Proxy fights illustrate this point perfectly. Due to new SEC open ballot rules, companies face increased vulnerability to activist challenges. These won't be mere warning shots but information-heavy, full-frontal assaults. IR teams must be prepared with an immediate response. We have experience on both sides of these confrontations and can attest that social media is an extremely effective mitigating and/or amplifying factor.
Companies with strong social engagement are better equipped to defend themselves because they've established trust and rapport with investors and have already created a direct communication channel. While the activist side is trying to reach out to investors by any means possible, the company can instantly communicate with investors through social media and shore up support when needed, such as during a proxy vote. It’s a game-changer for proxy defense.
Zach: So, for all of these communication options, how can an IR team ensure they’re reaching out to the right audience, that is to say, the company’s actual investors?
Townsend: Good question. For B2C communications, you’re trying to grow an audience as large and varied as possible. For investor relations, it comes down to the quality of the audience following you and how engaged they are. IR teams only need to reach and engage investors and potential investors. There’s a long way around that, which relies on an organic process, and a shortcut, which costs more money but is worth every penny.
The long way to discover that audience is by sharing your IR website and social handles online for interested parties to follow. People are talking about you online whether you are listening or not, so you can find potential investors by auditing those conversations. We also recommend studying your peers in the sector to understand more about those investors and subjects of concern within the sector. You can curate that audience simply by outlining those digital channels to your investor base during earnings calls and investor day presentations. We’ve found that with some strategic searching and spotlighting, companies can organically curate a quality audience -- but it takes time and diligence.
The shortcut solution is to purchase a non-objecting beneficial owner (NOBO) list of investors in the stock. Essentially, a NOBO list is a spreadsheet with some contact information of those investors who have agreed to share their name, hopefully, their mailing address, and, ideally, the number of shares they own.
Purchasing these lists is incredibly expensive but, in our opinion, entirely worthwhile. NOBO lists provide a significant shortcut to understanding your current investor base. Often, the information these lists provide is modest, but at Haystack, our data scientists can optimize these databases for the most valuable targeting information. From this, we can help IR teams create an elegant customer relationship management (CRM) digital marketing solution that can disseminate social media posts, email marketing, polls, and any other functions by which you could engage that audience.
Zach: Earlier, you mentioned that one of the key differentiators of digital communications was the ability to measure it. Can you talk about that?
Townsend: The real beauty and benefit of expanding digital IR channels is putting analytics against all of the data and outreach. The data helps IROs understand the level of engagement (likes, shares, clicks) and optimize it to be most effective.
For instance, you could poll your audience before your earnings calls about the subjects they deem most important for you to cover that quarter. This way, you’re proactively asking questions and conversing with your investor base so they feel listened to. Like a traditional marketing campaign, you can constantly tweak and evolve your communications and targeting to optimize your results.
Zach: This approach probably feels quite progressive for many of those in IR. Should they consider these channels the “new normal, “whereby they focus on these channels more than others?
Townsend: In the end, all of these digital tools — the dedicated IR website, IR social media handles, and optimized SEO — operate synergistically to empower companies to communicate directly with their investors. We stress to our clients that they complement, rather than replace, traditional tools such as earnings calls, investor days, and press releases. By leveraging digital platforms, you inform and support your traditional communications and gain valuable insights into potential opportunities or challenges for the business. It's not just about growing your audience; it's about knowing them and fostering engagement. Once your investor base is engaged, you can command their attention instantly. The power lies in a company’s ability to control and amplify its narrative, whether celebrating a success or navigating a crisis.
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