Investor relations: Getting the message right
With Australia’s economic outlook uncertain, business executives should allocate 30 per cent of their time to attracting and retaining investors using proven and effective marketing strategies, an investor relations expert has claimed.
Matthew Gerber, director of Magnus Sydney, said while financial markets broadly recognised chief executives and managing directors should spend about one-and-a-half days a week marketing their company to potential investors and engaging with existing shareholders, the economic environment made it even more important that such “a solid chunk of senior management resources” was used efficiently.
“The allocation of time is one thing, (but) if an executive has not adequately prepared for this process of engagement, then this can be considerable time wasted or ‘wheel spinning’,” Mr Gerber said. “Your company is literally one of thousands vying for capital, so getting your messaging right is critical.”
There are about 2400 companies listed on the Australian Securities Exchange, he said.
Mr Gerber told M&M there were three factors important to success — consistent and simple messaging, proactive shareholder engagement and running a targeted investor marketing program.
“A company needs to effectively and simply communicate why it is an attractive investment,” he said.
“What is the business model, what are the profit, value and growth drivers, why is the timing right to invest now?”
“These messages need to highlight the factors that differentiate the company and make it a preferred investment compared to industry peers.”
Having a set of key messages was pointless unless the company leadership was on the front foot communicating with shareholders about performance, strategy and outlook.
“Honest, frank and regular engagement builds credibility and kudos for management,” he said.
“Management should arrange face-to-face meetings with as many shareholders as possible at least twice a year.
“For companies with ‘retail’ investor dominated registers, management should consider holding strategy and information sessions in major capital cities or participating in one of the several seminars or lunches hosted by investor forum organisers.”
Mr Gerber said while talking to potential investors could be “frustratingly repetitive” and time consuming, correctly identifying and targeting the most likely prospects could make the process more effective.
“Then you need to need to repeat the process of engaging with the same potential investors at least every four to six months,” he said.
“Generally, it will take multiple meetings with the same potential investor before your story is well understood and to have generated sufficient trust so that a genuine investment will be seriously considered.”
Mr Gerber — who has worked as a senior in-house corporate affairs and investor relations executive for several S&P- ASX 200 listed companies — also advocated hosting conference calls, generating video content for the company website, publishing opinion pieces, and presenting at industry seminars to raise the company profile and convert inquisitive investors.
