Socializing Investor Relations: Why You Should Be Doing It, and How You Can Get Started

By | September 13, 2012

Have you heard (or made) any of these statements lately?

The Street doesn’t get our story.

Why don’t we get credit for all of our strengths/accomplishments/ideas/successes/strategies?

We get the same questions, from the same few people, every quarter

Our roadshow didn’t get us anywhere.

We are undervalued.

How can we differentiate ourselves from our peer group?

If the answer is yes, then you should be thinking about how to “socialize” your IR and financial communications programs. I could tick off all of the reasons why you haven’t done it yet, beginning with concerns about Regulation Fair Disclosure and some recent social mishaps resulting from some ill-conceived CEO commentary.

Those who think that social media is the land of brand promotion, and brand promotion only, should recall the cautionary tales of some other channels that were initially shunned by those tasked with financial communications – like live TV. Once the domain of the consumer brand and shunned by CEOs, live broadcast was too “uncontrolled,” too “scary” and too “dangerous.” Now, CEOs fight to be on CNBC to reach their investor audience. Sounds very similar to the current perception of social media. When used correctly, social media can be a powerful addition to your financial communications. And using it correctly means using it in complete regulatory compliance.

The conversation is going to happen, with or without you…all of the “social buzz” around Apple’s Q3 earnings miss was just one recent example.

Not sure where to start? Here are a few easy steps to get you socially active:

  • Listening & Insights: Social media can be a powerful “eavesdropping device” – tune in to hear what your individual shareholders are saying about you, and about your competitors. Twitter recently launched cashtags – clickable stock symbols which include $ + your stock ticker. The conversations are happening – and they can inform your messaging and keep you aware of what is being talked about.
  • Earnings 2.0: Your quarterly earnings cycle is one of the most important communications vehicles you have. Similar to a school report card, investors use this time to tell how a company is performing and what the future holds. Social media can serve as an additional layer of distribution to your investors by “live-tweeting” your earnings and providing links to your release, conference call webcast and investor presentation. Social media provides the platform to include and engage individual shareholders, as well as the larger, institutional investors. Some of the more progressive companies like Dell are even taking questions via Twitter to be answered on their calls, which can come from any shareholder, not just an analyst or major investor.
  • Start a Dialogue: One of the biggest challenges companies face is continuing the conversation with investors between quarters. Social media provides the platform for you to create an IR “channel” for easily sharing your Company news, releases, reports, presentations and company videos which can serve as the stimulus for true conversation, where you can get feedback in real time. So while pushing content and news is good, engaging in real dialogue is better. Social engagement – from responding to investor inquiries, reacting to online posts, or following the conversation – will give you the ability to respond or react to comments and questions online, gauge the sentiment of the financial community, and assist in building a broad, diversified base of holders by strengthening and building trust among your current and potential investors.
  • Lead the Conversation: Research repeatedly shows that a larger portion of your share price than you may think is attributed to intangibles, with quality of leadership, vision and strategy as major factors. Social media platforms like Twitter, Slideshare and YouTube provide forums where you can tell the “softer side” of your company’s story. And unlike a feature story in major media, you have 100 percent editorial authority over the content, the timing and the photos. Use social media to help people get to “know” your leadership team, understand your strategy, and follow your news and developments, because a social CEO is perceived as more relevant. Maintain a blog to share thoughts and comments about industry trends and financial news. Get your content out there, build your company’s reputation and become a voice for your industry.

Social media isn’t going to pass. The conversations are happening, with or without you. You can use it as a strategic tool to build trust, relevance and long term shareholder value. Or not.  Competition for investment dollars is just that, competition.  And the savviest companies will be using every tool at their disposal to attract your investors.

Get social.   Or get left behind.

 

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