Online IR: How to build investor confidence through effective online communications?by Catherine Crofton
This presentation was a follow-up to a webinar Catherine conducted on this topic in April of last year in which she discussed five common barriers that block potential investors from understanding a company's investment story. Go to www.q4websystems.com to view April's presentation.
This time, her presentation focused on how to build investor confidence through effective online communications. In particular she outlined some critical improvements to consider making to the IR website in 2010 including:
- Providing immediate entry points to all users
- Providing a company snapshot (industry)
- Detailing the market opportunity
- Communicating a clear strategy
- Emphasizing why leadership is suited to execute strategy
- Summarizing ‘Why Invest?' proposition
- Using technology to engage & increase accessibility
- Broadening reach, increasing accessibility & engagement. Protecting shareholder value via social media
The presentation included a lot of great case stories and examples of companies using best practices with practical advice on applying them to your own IR website.
Here are some of the highlights:
PROVIDING IMMEDIATE ENTRY POINTS TO ALL USERS
- Information on your IR website should be geared to current, potential and long-term investors. All of these audiences has a different reason for visiting your website. A good site needs to show users where they are, where they want to go and how to make their way back. It should also bring key content forward so users are presented with the next logical step in their navigation of your site. One place this can be addressed is the Index page.
- Danske Bank has a good investor index page where they present the most frequently sought information, lots of quick links and even asks the question, "Are you a new investor?".
PROVIDING A COMPANY SNAPSHOT
- Including a top level view of your company will help provide context for your company's investment proposition. At the very least, the investor section should have a company page or section that begins with At-A-Glance information. The type of information offered in At-A-Glance varies by company.
- For example, Bell provides an overview of the company, business units and customer breakdown. They also breakout their revenue by segment and product and link to additional information in their company section.
- The At-A-Glance section should also be supported by a downloadable fact sheet. BASF has a great fact sheet that is updated on a quarterly basis.
DETAILING THE MARKET OPPORTUNITY
- Companies should put a lot of time and effort in presenting the case for market demand of their product or service and why they are uniquely positioned to capitalize on the opportunity.
- Potash does a great job of providing in-depth information on all aspects of their business including global trends and statistics so an investor can piece this information together to make an informed investment decision.
COMMUNICATING A CLEAR STRATEGY
- The economic meltdown has made communicating a clear strategy that supports corporate objectives more important now than ever. Investors need to know that your company is moving into a purposeful direction to increase growth and profitability.
- There are several good examples of companies who clearly outline their strategy like Credit Suisse who discusses their strategy for moving forward and gives investors an understanding of how this same strategy helped to lessen their exposure in the recent financial crisis.
- Shell is another good example. They provide updates on their strategy, which indicates that they are continuously monitoring and evaluating their approach within the context of market conditions and adjusting or fine-tuning as required.
EMPHASIZING WHY LEADERSHIP IS SUITED TO EXECUTE STRATEGY
- It is important to convey that the key players in a company are connected to the strategy. In particular, that they were chosen for specific knowledge and skills that make them ideally suited to execute the corporate strategy.
- For example, Nexen has an award-winning Corporate Governance section that provides detailed biographies of their Board and highlights specific areas of expertise. This information is then connected to a matrix that describes how the Board's combined expertise helps execute the company's strategy, while ensuring appropriate oversight.
SUMMARIZING "WHY INVEST" PROPOSITION
- A lot of issuers miss the opportunity to communicate why a person should invest in their company. There are several ways this can be resolved....through a robust homepage that integrates investor content such as providing pull downs to provide immediate access to key content; "What's New" – which features anything recently added to the site such as quarterly earnings results and conference call archive and upcoming events such as annual meeting; and an IR index page that has a section entitled "Why Invest".
- We have found several companies who have a "Why Invest" page or section on their site including Agnico-Eagle which includes a video; Aura Minerals; and Aviva.
USING TECHNOLOGY TO ENGAGE & INCREASE ACCESSIBILITY
Technology can help to effectively aid communication and engage users. A few examples of some innovative things that companies are doing:
- Strategic use of flash to convey important messaging. For example, on the Potash homepage, three messages cycle through and link to associated content.
- Customize IR Index page – For example, ENI offers the ability to customize the investor index page by using a tool to move modules around on the page.
- Design your own info. page – Aviva offers this feature and have made it very user-friendly; you just check off the items you want on your page or choose a profile from a pull down menu that offers a preconfigured set of information.
- Sorting & Filtering – We are seeing a much greater use of tools that allow users to sort, filter and search information by date, topic and speaker such as News, Events and Webcasts. For example, Adidas lets users search their Events by topic, month and year.
- Technology can help to effectively aid communication and engage users. A few examples of some innovative things that companies are doing:
BROADENING REACH, INCREASING ACCESSIBILITY & ENGAGEMENT & PROTECTING SHAREHOLDER VALUE VIA SOCIAL MEDIA
- We are seeing an increase in the number of issuers integrating social media with their website. For example, Embraer offers a dedicated IR 2.0 page accessible through a panel that's universal to their investor section.
- Verizon is another example and they break down their social media channels by business units and information types including corporate and investor relations.
Small cap social media ROI case study: TVI Pacific:
- Initial objective to use social media (with other tactics) to help increase company awareness and engage stakeholders.
- Initial strategy began with a website redesign with prominence to social media through a "Connect Us" section.
- I recently interviewed Rhonda Bennetto, TVI's Executive Director Investor Communications on some preliminary findings of integrating social media into their broader communications strategy. Click here to read the interview.
Today's challenging economic environment has made building investor confidence a top priority for companies. The IR website still remains a leading source for the investment community to verify and gather company information. There are several things to consider for your IR website.
- First, it is essential that you consider your key audiences and provide entry points for potential, current and long-term investors.
- Second, if you want me to have confidence in your company as an investor, I need a company snapshot in order to understand your industry and your position within that industry.
- Third, the market opportunity (supported by reliable statistical information), must also be conveyed.
- Fourth, I need to know that your company has defined its objectives for growth and that you have a clear strategy to execute on these objectives. I need to know that you evaluate this strategy on an ongoing basis to keep pace with market conditions.
- Fifth, I need to know that your people are connected to your strategy and that they were chosen for specific knowledge and skills that make them ideally suited to execute the corporate strategy.
- Sixth, add to this a robust "Why Invest" section that shows stable growth as indicated in your financials and when results are lower than expected, I need a sound explanation and to see that there's a clear strategy to address this moving forward.
- Finally, using technology that is suited to your business needs as well as integrating additional tools such as social networks will increase your audience reach, empower people to engage with your company and give them a better understanding of your investment proposition.
Reproduced on www.reportwatch.net by kind permission of www.q4websystems.com
back to overview