An EFFECTIVE IR Program Is An Investment, Not A Cost. Here’s 4 Reasons Why.
Investor Relations (“IR”) programs – To be or not to be? I still get this response sometimes from Public Listed Companies (“PLC”), even after 13 years of being in the IR practice. But first, let’s ask ourselves, “Would we be confident with a purchase knowing that there’s no after sales services provided?” We surely wouldn’t!
More often than not, shareholders pay more for shares than the company’s products themselves. So it would follow therefore, that they would expect some sort of ‘after sales service’ from the company. Some PLCs are of the mind-set that they should solely focus on their company’s operations and deliver favourable results. While this is not wholly wrong, they should not limit their focus, simply because truly great companies produce great products alongside providing great customer service as well.
Although it is not compulsory to have an IR program in place for your company, it certainly is a crucial element in the eyes of your investors. A good and engaging IR program not only brings about happy investors, it provides a great return on investments too:
1) Investors are your customers – Smart and proactive companies use their investor database wisely to connect with investors electronically. They also connect with investors physically via investor sessions such as Annual General Meetings (“AGM”) as well as set up booths and offer special deals to their investors at investment related events. Marketers crave receiving this sort of undivided attention from their potential customers. Since you have already have the event venue reserved for your company for the day, why waste it? Utilise the space and the opportunity to communicate with your gathered investors to sell! If your investors believe in your company, there’s little doubt that they would believe in your products. The results may surprise you.
2) Investors can act as your Ambassadors – If investors invest in your company, it is very likely that they like what you have been doing. With some of them investing their life savings in your company, you will be sure that they will help promote your company and would love your company to do well. Happy investors will not hesitate and are more than happy to share their experience with your company with a broader audience. That’s word of mouth promotion at no cost! Need I say more?
3) It’s about supply and demand – The more investors you engage with, the easier it is to achieve fair valuation for your company and investors alike. It is important to maintain the engagement that you have with your existing investors, however, it is just as important to consider engaging with potential new investors throughout Malaysia, or better, international investors. There has been much recent talk of of practicing Digital IR as a breakthrough from the traditional IR culture, as this channel is able to reach a wider audience of potential investors who may be interested in your company. Regular content updates and live webcasting sessions for public viewership is an indispensable tool for reaching out to both retail and institutional investors effectively. Concurrently, this move is in line with current social media trends that involve the use of the Internet and social media.
4) Business partnership opportunities – When you have ticked boxes for successfully meeting IR challenges and receive positive feedback in creating a different kind of investor experience, you gain brand recognition for your company and this will consequently open doors to various potential partnerships and even new business angles both locally and abroad. Many companies have successfully attracted strategic regional partners, which eventually helped to bring their company regional.
All those PLCs out there, still not equipped with an IR program, don’t miss out any further! Running a PLC without an Investor Relations campaign is akin to selling your product without offering any after sales service. So, the next time you’re about to nudge your salesperson for not providing better services to customers, think about whether you have done enough for your investors. It only takes a simple step to start by practicing the inclusion of a must-have IR agenda during every quarterly Board meeting.
For PLCs that pride themselves on being leaders in their respective industries, it is time to take that leap forward, invest in your investors via an effective IR program, and lead the way in value creation for both your company and its stakeholders Good luck!
Article Contributed by:
Dr. Darren Wong
CEO, Director of Marketing & Founding Partner
Dr. Darren Wong is the CEO, Director of Marketing & Founding Partner of Esente Communications Sdn Bhd, a Malaysian integrated investor relations and public relations firm.
Dr. Darren Wong has grown the company from humble beginnings into becoming a leading IR & PR consultancy firm in Malaysia. Over an impressive decade which saw him and the company grow from strength to strength.
Dr. Darren has developed award-winning communication strategies for M&A, IPO and other capital market exercises over US$5 billion worth. He has provided invaluable counsel to captains of industry in the Oil & Gas, Banking, Property, REIT, Technology, FMCG and Hospitality business, assisting them to successfully navigate the investment landscape both locally and abroad. In addition to corporate counsel, Dr. Darren also advises Ministries and NGOs on complex policy communication and effective multi-stakeholder engagement using both new media and traditional media platforms.