Why you should invest in a digital IR strategy

There has been a visible shift in today's capital markets, which has changed the investor relations (IR) space. The industry is more complex, yet agile, than a few years ago. As companies look to streamline their value chains, all while cutting costs, more business executives are using innovative technology to redefine their relationships with investors.

Investor relations is defined by Gartner as a 'strategic responsibility whereby organizations manage communications between their executive leadership and the financial community'. 

IR gives your investors an accurate account of company affairs, which helps them to make informed decisions about whether to invest in your business. However, the challenge for you is this…

… In today’s fast paced media landscape, everybody has access to unlimited sources of information. Journalists and investors get bombarded with messages, news and pitches. Just adding your article to this large pile of information is not enough to spark their interest. The question is, how do you stand out in an already saturated space?

Unpacking the role of IR

A strong story, and how you tell your story, is only part of the bigger picture when trying to get your story seen. The picture becomes complete based on the type of relationship that you have with the people who you want to connect with.

For a long time, and even now for many companies, IR has been loosely associated with the marketing, communications, and business strategy departments. Here's the thing, while many organizations do regularly communicate with their shareholders, according to Bain and Company, a staggering 90% fail to link IR with their overall business strategy.

The fact is, times have changed. The only way any company can drive true value for their investors is to integrate best practices from across all essential business functions.

IR industry shifting toward technology 

The IR industry as a whole has seen a shift toward technology in recent years in an effort to unlock more personalized and efficient communication channels between businesses and investors worldwide.

Your business relationships with investors and journalists has moved beyond grabbing a drink after an event -  that's not to say this isn't effective. However, it's not something you can do everyday. How do you keep investors and journalists engaged all year round.

Forming good business relationships shares traits with good personal relationships. Both parties need to be authentic, transparent, responsive, reliable, trustworthy and share a common ground. 

With this in mind, given that we live in an age where transparency, speed, and agility are more important than ever, it makes sense for your company to use automation and digital tools to enhance your existing IR infrastructure.

By doing so, you can maximize shareholder value by better communicating your company values and strategy, stabilizing share prices with transparent communication that will prevent panic buying and selling, plus you gain an increased ability to grow, diversify, engage and retain your investor base.

There's no magic formula, the key is simple. Only share information that you know will interest investors and journalists. Don’t spam. Commit to being transparent, timely and consistent in the information that you share. Keep your promises, and be responsive. 

Yes. Practicing this can be a challenge. After all, it's easy to forget about an investor inquiry lingering in your mailbox if you’re busy. If you have no way to segment your contacts, sending your press releases to your whole database is your only option. However, you have no way of knowing if anyone's reading your messages if they don't tell you.

The challenges facing IR in a digital world

This is just one of several challenges that featured in a KMPG study, which highlights the changing role of IR and its importance as a strategic function. A survey of 91 companies found that the top three goals for investor relations are to:

1. Boost shareholder engagement.
2. Improve business disclosures and enhance overall credibility.
3. Ensure better compliance and corporate governance.

However, to engage your (future) shareholders, you need to know how to create and articulate the stories you have to tell in a way that gives investors a convincing investment case. 

Ironically, this is perhaps one of your biggest challenges, closely followed by barriers in guidance and expectation management, plus the positioning of IR as a strategic function within your company.

In terms of improving investor relations with technology, IR platforms have traditionally lacked the level of finesse and agility that companies need to connect their stories and gain traction in a market that's now entirely digital.

Phone, email, and web-based IR solutions now fall short when it comes to offering the visibility that drives financing. This lack of visibility into return-on-investment (ROI) might have caused you to think that digital IR is a waste of money.

This hasn't been helped by current investor communication tools either, which offer little opportunity for real-time, two-way communication with investors.

That's why you need to leverage technology to proactively engage with investors about your short, medium, and long-term business strategies. Since many companies today do not carefully segment their investor base or have the appropriate tools to do so, IR becomes a whole new challenge in trying to retain shareholders and engage new ones.

A whole new level for investor relations

We hope that you've learned just how important it is to have a digital investor relations strategy that can adapt to your business model. The IR landscape is constantly changing. Traditional forms of IR communication are an increasingly less effective way to attract, engage and retain shareholders.

By using technology like Presspage, you can give investors and (future) shareholders an entirely new experience of personalized engagement and communication, offering real-time company updates as they happen.

Ready to transform your IR strategy. Get started with Presspage today. Book a personalized demo now.