Beyond Corporate Access: Building an IR Marketing Strategy
21 November 2019
By Marla Hurov
When it comes to corporate access, considering all of the core elements that comprise a corporate strategy is essential to success. This includes market research to define and understand your audience (targeting and perception analysis); marketing to generate inbound investor interest (investor presentations, newsletters, media releases, or annual reports); and “sales” to close market investment (roadshows, capital market days, or investor conferences). With the decline of the sell-side, IROs should be increasingly trying to elevate marketing strategies to generate inbound buy-side leads and drive investor engagement.
With that in mind, a panel of experts at our recent IR conference explored what corporate strategy can teach us about building investor relations marketing strategies and capital networks. Amit Sanghvi, Managing Director of Europe at Q4, Michael Harboe-Jørgensen, Head of Investor Relations at Maersk Drilling, and Graham Donahue, Head of Corporate Development at Beadell Resources, examined how marketing can spark investor interest in this new era of IR.
Marketing and IR today
A live audience poll showed that 95% of investor relations professionals in attendance believed that marketing plays a big part in their evolving role. Amit observed that his IR clients have traditionally leveraged brokers to connect with investors. But now IROs need to become more proactive about “capital networking” and generating inbound interest.
In fact, the investor relations function generates a lot of marketing content, including regulatory and media releases, events announcements, blogs, and occasionally even Vlogs (video blogs) showcasing executives. But Amit posed the question: “Are you distributing this content effectively so that your target market can easily gain access and are you analysing market interactions with your content through every channel?” If “the right investors gain access and engage with your content, they’ll have a base level understanding of your business,” so you can have “more meaningful conversations when you connect in person,” Amit said.
As a seasoned corporate strategist before recently joining investor relations, Michael said that “the processes applied in the IR space to identify target investors appeared less sophisticated than those applied in marketing where you have fairly advanced methods to identify your relevant customer segments, understand their purchasing criteria and drivers, ultimately enabling you to have the right dialogue with your customers.”
Overall, he found the processes applied for investor targeting fairly generic, and with significant improvement potential. “In marketing knowing your customer in detail enables you to have a much better dialogue, and my assumption is that knowing your current shareholders and potential new investors better will enable a much better and tailor-made dialogue, making best use of investor and management time.”
According to Graham, it’s important to think of both outbound and inbound marketing for corporate access. The key is taking a proactive approach, to identify which investors you want on their register and how to approach them. “We set a longer-term objective, because we felt the role of corporate access was to start a narrative with clients and stick to that narrative over time.” While it might be hard to know when that will trigger the investor to get involved, “as long as you view it as a long term relationship with a consistent narrative, you stand the best chance of getting them on board.”
Measuring the impact of marketing content
Considering IR already produces a comprehensive library of content, Amit said that the next priority is engaging investors through the right channels and measuring the impact of your content. If you know that “a channel is generating interest from the right audience, you can double down on it and extract its maximum value.” Conversely, “if something isn’t working, you can remove it to focus on what works” — especially considering the limited resources of most IR teams today.
One notable audience participant, Ruth Cotter, SVP, World-wide Marketing, Human Resources and Investor Relations at AMD said that they focus on “measuring web, social media, and CSR engagement, and the resonance of messaging — often from sell-side notes or post-mortem following buy-side engagement and earnings calls.” For AMD, it’s imperative to understand what’s important to their investor base, and then adjust course accordingly.
Segmenting your audience and conducting market research
As you start to generate inbound leads it’s essential to have your outbound marketing strategy in place. For Michael, one of his biggest challenges was the sheer size of his audience. “We have more than 300 institutional investors and close to 70,000 retail investors.” His team had to think strategically about reaching such a big target.
They decided to “learn best practices on a small population of their investors.” Michael explained: “Our top 30 shareholders own roughly 70 percent of the company. Then we identified 20 targets that were not current shareholders. We started our marketing efforts from a total pool of about 50 targets, combining existing and prospective shareholders.” Going forward it will be about “scaling that model” and becoming better at communicating “with retail investors and the last 90 percent” of their institutional investors. They were also able to understand the kinds of disclosures they needed to pique shareholder interest.”
Amit concurred and added, “Segmenting your shareholder base and conducting market research is vital to communicating with strategic impact. This is where outsourcing perception analysis or even conducting IR led discovery calls can help. Questions you might ask can range anywhere from company specific to industry focused or details about the PM/analyst (ie. how do they value companies, what other industries do they follow, and where do they source their insights?).”
Understanding buyer personas
When it comes to meeting with investors, asking open-ended questions is crucial to understanding their interests. According to Graham, this helps keep the dialogue going. “We would often see the same investors over and over again. So we started asking very specific but open-ended questions — about what it would take to get them involved in our stock and what they were looking for in particular.”
All too often meetings can become “one-offs,” after which you “update the story six months later.” The difference is that “if you ask investors questions about getting involved in the stock, you get a different dialogue. You can highlight the parts of the story that will be most important to that investor.” For example, if you know an investor is looking to hit a certain market cap, you can follow-up when you reach that market cap. “By opening up the dialogue directly with investors, our marketing became much more effective.”
Graham added that “since the sell-side has lost its prominence in the role,” it’s more important than ever for IR professionals to have “direct and ongoing dialogue” with investors and portfolio managers. Being proactive about communication helped them identify such themes as ESG: “We could bring that back to the board and make adjustments, so we didn’t lose investors.”
Michael also pointed to the importance of being perceived as a trusted provider of objective and unbiased information about the company. “For us, that has driven a good relationship with shareholders. We are honest and transparent in presenting both our opportunities and risks in the market space.”
Mapping the buyer’s journey
IR professionals should also understand the investor’s decision making process or “journey.” Some investors are fast decision makers, while others have to present to committees about the proposition and risks for going into the share. Michael noted: “The more you can help these portfolio managers covering a huge universe of stocks,” by providing direct input about your stock, and quickly respond to requests for additional information, the easier you make their role..”
When it comes to the investor journey and marketing funnel, Michael said that pipeline management is important. However, the IR pipeline is not like a traditional marketing funnel, but rather an hourglass. “The moment they invest in your company,” you can’t forget about them. “You need to continue to nurture them.” For example, an investor might be underweighted and there’s potential for more selling. It’s critical to “maintain the dialogue with existing investors, because maintaining an existing investor is just as important as getting a new investor on board. Marketing doesn’t end with the moment they buy.”
On that note, Amit concluded with a few meaningful takeaways: “You might start off with an enormous database, but then you can segment it, identify buyer personas and what’s most important to them, and ultimately learn through conversations about their buying journey.” In doing so you build connections that fall into your Capital Network. For each of these, as you learn about them, their interests and their sources of information, you can tailor content, communication channels and message to their needs.
Q4’s IR conference was a huge success. Thanks to all of our attendees and speakers for helping us get closer to solving IR’s biggest challenges. We hope to see you next year! Pre-registration is already open, so sign up for Fall 2020 today.