What Should Behavioral Analytics Be Able to Achieve for a Company?

Darrell Niri

After a two-year hiatus, Q4 returned in person to NIRI’s annual conference with a bang. Held in Boston, the conference was a great place to reflect on the rapid changes our industry has experienced over the last several years and to look ahead to those we see unfolding now. The house was packed when Darrell Heaps, our founder and CEO, discussed “Behavioral Analytics and the Future of Investor Relations.”

Focusing on the evolution, transformation, and digitization of our world, Darrell posed this central question: What should Behavioral Analytics be able to achieve for their companies?

The Power of Behavioral Analytics

The web, data, and analytics have the power to transform the role of the IRO. Darrell impressed upon the audience, “IROs should be able to build and nurture a community of stakeholders. A community of followers [including but stretching beyond investors] that are invested monetarily or emotionally in the prosperity and performance of your business and your people.”  

We know this sounds pretty great, but you may be wondering how. How can IROs create and sustain that community, particularly when it includes such a wide swath of members? The answer, while not simple, is straightforward: through the delivery of personalized experiences at scale to its group of diverse stakeholders. 

To illustrate his point, Darrell walked the audience through an analogy of the history of retail selling. When merchants first sold their wares from stalls in an open-air marketplace, they enjoyed deep transparency regarding shoppers, potential customers, and their competition … all based on an abundance of their observable behavior. A retailer in the market could make insight-driven predictions regarding what a visitor might purchase from them when they might do so, the style in which they’d negotiate the transaction, and even gather insight regarding what that visitor might be willing to pay … all based on a host of observations such as their interest in other vendors’ products, how they interact with other merchants and stalls, the company they’re shopping with, and purchases they’ve already made.

However, as the practice of retail shopping evolved from stalls in an open-air marketplace to stand-alone shops, then malls, and then the internet, vendors lost the ability to observe visitors’ behavior, and the transparency Darrell described was lost … 

That is, until Google Ad profiles. Online organizations now have access to a previously unimaginable amount of data regarding internet users based on their observable online behavior. In fact, the knowability of a web user not only recreates the transparency of the original open-air marketplace but expands and elevates it beyond the imagination of previous generations.  

Using his own Google Ad profile as an example, Darrell acknowledged the initial discomfort he felt when he realized the volume and detail of information in it. However, as he went on to compare the personalized, relevant web content served up to him today via social media channels to the unpersonalized spam email he still gets, he concluded that this ability to offer the right content, at the right time, via the right channel is a force for good. It is positively transforming how we connect, interact, and engage with one another in an increasingly digital environment. 

What does Behavioral Analytics mean for IROs?

Darrell reminded the audience of an all too familiar experience: a portfolio manager beginning each day with around 200 new emails before the market even opens. Even though a handful of these emails contain relevant content (research updates, morning notes, trade ideas, etc.), the portfolio manager only gets through five or six a day. The chore of combing through hundreds of emails to find those that are useful is just too time-consuming. It’s no wonder that many IROs cite identifying and engaging with new investors as one of their most significant challenges. This is particularly true when the main communication channel we’re using to connect is simply no longer effective.

But what if there were a digital profile equivalent to a Google Ad Profile for investor relations? Could that change when, where, and how IROs target and connect with stakeholders? How would that expand and elevate the role of IROs, transforming the capital markets? How would it even impact the larger economy for the better? 

Based on our new, universal behavioral analytics platform to host all of our solutions combined with the breadth of our customer base, Q4 now has the ability to identify and aggregate data on where investors and stakeholders are spending their time, whether it be across their websites and web content or participating in earnings calls, investor days, investor conferences, non-deal road shoes, or digital bus tours. Because meetings, whether virtual or in-person, are almost exclusively arranged online, we also have the ability to know when companies, investors, and stakeholders meet. 

The key, Darrell explains, is combining data regarding the behavior of investors and potential investors described above with what we know about what they’re doing in the market, what they’re buying and selling. This ability to combine data on behavior with market action – AT SCALE – is a game changer, allowing an IRO to proactively, predictively understand which investor fits which company at a particular point in time. This is the promise of behavioral analytics in the capital markets. 

Imagine …

  • Being able to understand which of your investors are engaged with your company right now.
  • Who in the investment community is doing research on your peers, but not you, right now.
  • Having a system that automatically recommends that you reach out to those identified investors and potential investors.
  • Having a platform that predicts the fit and probability of an investor with the company and automatically serves up a request for a meeting. 

All of this and more is possible. As Darrell closed his presentation he reminded those at NIRI of Q4’s mission: “This ability to connect the behavior of investors, understanding their action and delivering recommendations to both sides of the market in real time, is the vision of what it is that we’re building, starting with engagement analytics.”

Want to learn more about behavioral analytics? Check out our additional blogs, eBook, infographic, and glossary.

We invite you to take a look at Q4 Capital Connect™, our new platform offering Engagement Analytics to achieve the above and more. 

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