How to Navigate the New Normal for Investor Targeting [Webinar Recap]
9 June 2020
By Amy Statham
All of the COVID-induced changes have had lingering impacts on investor relations, and by extension, how IROs can effectively target. For many in the industry, the switch up and ‘new normal’ has come with a unique set of challenges whether it’s working from home or taking the majority (if not all) of their meetings virtually. To help shed some light on how IROs are navigating the new reality of investor targeting, we’ll share some helpful tactics that other notable IR professionals are implementing to make the most of the market as it stands today.
Location, location, location
With what is now considered to be the norm, targeting and proactive outreach has become very important. A strong targeting practice is great at identifying which institutions you want as a shareholder, and often you’re able to get the name of a portfolio manager regarding who to speak to, but now it’s a matter of where they are. Chances are, they’re likely at home, and because of that, you need to know how to reach them. Having an intermediary who has an existing relationship can help to introduce that connection and create an initial rapport.
But ultimately, effective investor relations is about empathy, and establishing that with investors and the c-suite is important. While creating that rapport digitally may seem daunting, it doesn’t have to be over-complicated. Remember that we’ve all recently gone through the common experience of shock and adjustment due to COVID-19, and to share that common experience of your dog walking by or your child making a cameo – that creates a human element and fosters rapport, which is an overall positive.
In the past, there has been a lot of hesitation around video calling, but aside from its obvious necessity right now, it actually affords a lot of unexplored opportunities. By eliminating travel, IROs are able to be much more effective with their time and book more high-quality meetings with investors virtually over a variety of time zones. This will likely have a permanent impact on how meetings are dealt with past COVID-19, as IROs can now take their NDRs and other meetings international, According to Billy Eckert, Head of Surveillance and Capital Markets Intelligence at Q4, “Geographical targeting can be a big deal, especially when you look at some of the large capital centers of North America. If you are underrepresented in any one of those pockets, and there’s interest in the peer group, that can be a great opportunity for both management and IR to get in and fill a valuation gap with a region that might not have as much familiarity with your story, but should.”
There are a variety of considerations to account for when going virtual, such as technology, location, and engagement tools, but taking the appropriate steps to prepare can ensure you have a successful event.
Focus on what makes you different
Step up your typical targeting exercises of, ‘who owns my peers but not me’ or ‘what do my fundamental financial peers look like’ – those are easy low hanging fruit. When reassessing your targeting and opportunities, it’s time to get more creative. Take a look at your ‘thematic DNA’, which is extremely effective for targeting and gets beyond the financial metrics. What does your company focus on from a thematic perspective? Is it 5G, is it the internet of things? Maybe it’s an exceptional management pedigree that’s going to be really appealing to a certain group of investors.
This can be more difficult to screen for, but ensures that you’re positioning yourself within a market where there could be interest. Define what your company represents and really set yourself apart. Not only that, be proactive and push your story and company news into the market, and more importantly, to the right audience.
To learn more about targeting, or find out what else our panel had to say on how to navigate the new normal for investor targeting, you can find an on-demand version of the webinar, here.