A high-performance rate is not the only factor determining a company’s success. Establishing communications between market participants has always been important. It is so because people buy and pay to and from other people in the first place. Thus, every company of different levels is interested in providing the grounds for effective communications to investors.
It has been established that there is a positive relationship between the organization’s information policy and the cost of the capital it raises. This relationship is expressed in increased interest on the part of financial analysts and improved awareness of the issuing firm and its securities among market analysts and investors.
What is the profit for both parties? The company dreams of financial increase, income, new technologies, platforms, and equipment. At the same time, investors constantly search for profitable startups and ideas. They must catch every reasonable opportunity and see the trace they have passed together. They must know the company’s plans, ideas, costs and expenses, and the growth increment. They also need an explanation of the reasons for success.
Implementing an information policy aimed at attracting the attention of potential investors is a function called “investor relations.”
Rule 1: Run the IR department
The necessity of this step varies from company to company. The reason is in-depth.
An organization can be significant but not interested in the opinion of the market, and vice versa, small but striving to develop on the exchanges actively.
In the first case, investor relations work can be limited to answering emails and phone calls. The main point is to send potential investors annual reports and individual business meetings. It is about the minimum required action, no systematic approach. Yet, if you want to gain a better reputation and promote your firm on the exchange, you need a strong IR department that does a lot of different work.
The IR department will perform purposeful work strategically to establish relations with investors. Its task is to carry out various activities aimed at establishing effective relations with shareholders, investors, financial analysts, investment banks, government agencies, and creditors. It requires consistency, creativity, troubleshooting, and a personified approach to every person.
There are tons of jobs to do! The excellent news is that there is no unified role model of how the department should operate. You will choose your style.
Example 1
Discovery Channel is a hugely influential company that deals with different branches. It has to be public and encourage communication with investors.
For example, Discovery Channel teamed up with charity organization Oceana for the past few years to protect sharks from the cruel fin trade that affects up to 73 million sharks annually.
The same is about the Meta company, which deals with different people and partners. Some companies use their research and development resources and acknowledge that the power of change is further supported by establishing meaningful partnerships.
Rule 2: Divide Audiences
As content managers divide people into audiences to provide them with information properly and be heard, you should do the same to your investors. To establish relationships, you must determine with which communications channels you will deal with group investing partners. Depending on their importance, urgency, and event type, you may cope with that. In investor relations, there are five main groups of target audiences.
- Investment banks and brokers. The representatives of official institutions.;
- Employees. There might be certain workers of the company who may influence the investment decisions. Besides, they may be shareholders;
- Competitors. Although usually interaction with competitors occurs indirectly, nevertheless, this group is very interested in the company’s strategy, its plans, understanding of the business, and financial performance;
- Suppliers are the target audience, as its success largely depends on their understanding of the goals and strategy of the company;
- Mass media can form the opinion of market participants regarding the company and the industry in which it operates;
The success of communication activities to investors is determined by the purposeful, thoughtful actions of the IR managers. There are various means of communication.
For example, you may use press releases, email newsletters, reports, press conferences, and meetings with investors and analysts. Also, know that an effective email signature can enhance investor communication by reinforcing brand identity, providing contact information, and promoting key events and announcements. You may also arrange interviews of the company’s top management with the media and create presentations and round tables.
Another must-have is the website of the company. If you need to create posts for the blog, you may contact experienced writers from the TrustMyPaper service. They may complete any written sample.
Thus, IR activities use all modern communication channels, conditionally divided into three categories. Those were the printed or digital materials, yet, there were verbal messages. The latter notion includes meetings between investors and company executives, work with financial media, participation in conferences, roadshows, holding conference calls/
Example 2
The content of a roadshow is a carefully prepared presentation of the company’s production activities and its financial position, market, products, and services.
Typically, the show leader in the company’s management, after presenting the information, answers questions. The meetings may happen in a row in different cities or even countries. The main goal is to give the investors the knowledge and feeling of belonging to a successful organization.
Alternatively, people decide to go digital to avoid extra expenses on the road and hotel apartments. It is another option to put people together. You can create an excellent experience for the visitors, share their values, and inspire them. They will feel special.
Rule 3: Promote your SDG
Sustainable development goals are essential. It is about consciousness and sharing values with investors. They express environmental, governmental, and social responsibilities.
If you match the goal or encourage partners to bring value to nature or people, that will be a win-win. It is not just ethical; there are also strong business cases for investing in companies aligned with the SDGs. Companies aligned with SDGs show safe and steady returns for the investors.
Thus, use Internet capabilities, including databases, online services – presentation of financial results, maintaining information on the corporate website, and email.
You may delegate the writing to the required topic to the best essays service. They will create clear and comprehensive copies for you. By the way, the main advantages of these communication channels with investors are high efficiency and low costs.
Example 3
LEGO is a company that produces toys for children. However, it stands for transformative power to have this adopted in education and early childhood development worldwide. They encourage playing with the famous bricks in the classroom. That is about motoric development and growth.
In 2018, the company participated in a series of sustainability-focused events worldwide to support SDG 4: Ensuring quality education and lifelong learning for all. It released a LEGO wind turbine model with an instruction manual with facts about climate change and wind energy.
Conclusion
The communication initiative must come from within the company and precede the communication initiative from the investors. The company needs the goodwill of investors, so it must draw their attention.
Good luck finding your perfect strategy!
