What Makes for Effective Investor Relations Sites? Part 18: What’s Your Strategy?
June 15, 2010
In terms of financial theory, investors buy stock in a company on the expectation that future cash flows from the company will be enough to repay the investment and pay a return over a foreseeable time horizon. In order to do this, investors must have some visibility into the potential for future profits. This is where the job of investor relations comes in. Clarifying how the company will meet challenges going forward to pay out returns to shareholders is a three-fold task:
- making sure people clearly understand the company, its products and markets
- laying down a vision for how the company’s strategy will move the enterprise forward in the future
- and giving them a transparent view into how the company’s profits were garnered in the past.
One can argue on the relative importance of each of these messages. In fact, it’s a bit like a three-legged stool in that each element is essential to the overall investment story. Without an understanding of how a firm will make its profits in the future an investor will not be likely to ante up his money. Similarly, if the organization, its products and markets are not understood, an investor will have little confidence in the enterprise. Finally, if an investor cannot look at past performance of the enterprise as a gauge to how they will perform in the future, conviction that management will deliver for the investor will be lacking.
Today, however, I want to focus on the forward-looking piece of the story, as this is probably the area that we see the least in investor web sites. Most web sites are good at giving you information about past performance, particularly financial performance. Relatively fewer give you a glimpse into where they want the company to go.
One company that does is Shire Pharmaceuticals. While no single page description on the web can purport to give a full discussion of a company’s strategy, Shire’s page (see above), does give the reader some essential basics, such as their focus on specialty biopharmaceuticals and their use of strategic partnerships to develop most of the drugs in their pipeline.
Another example is the Compass Group’s Strategy page. Although there is a fair amount of corporate-speak jargon (Who doesn’t want to deliver value to shareholders and customers; and what do they mean by “leveraging the benefits of being a Group”?), there are some useful pieces of information about what Compass wants to do and how they propose to do it once you get past the fuzzy language.
To summarize, a company’s message will be much more effective if they devote more space and effort on their web sites to telling investors where they want the company to go in the future and how they intend to get there.
In this series:
Previous post: Making the individual shareholder feel welcome
Next post: Help your most frequent visitors
Gen Z: New Kids in the World
June 14, 2010
In the month of May, 2010, 13-year-old Jordan Romero became the youngest person to climb Mount Everest, and 16-year-old Jessica Watson completed her solo sail around the world. Meanwhile the preternaturally gorgeous and phenomenally talented jazz singer Nikki Yanofsky—who was just 12 when she debuted at the 2006 Montreal Jazz Festival–has released her first major CD. (Even if you’re not a jazz enthusiast, listen to her ballistic version of Take the “A” Train . . . and marvel.)
Right around age 12 seems to be the new normal for launching a superstar career. The Today Show recently featured a segment with pre-teen movie critic Jackson Murphy (youngest nominee ever for a NY Emmy) and sixth-grader Grayson Crouch went straight from a school recital to a major recording contract, after posting his Lady Gaga cover on YouTube.
So what’s up with these kids? And why should you care?
There have always been young phenoms (think Judy Garland or the Jackson Five)—and in any case, your company probably doesn’t need to hire any juvenile sailors or singers. But these young people are different from the shooting stars of yesteryear, and they are setting a brand new standard for their generation. That’s the generation, by the way, that will be knocking on corporate doors in just a few years.
Child stars of the past were almost all either “managed” into the limelight by their parents, or they were born into show biz families. Most struggled with fame and many lost the fight, ultimately succumbing to drugs, criminal behavior, even suicide. The list of those casualties would be very long.
But these new exemplars seem different: composed, self-directed, realistic, and multi-talented. They are members of “Generation Z,” a born-after-1995 group also referred to as “Net Gen” because they have grown up with the everywhere Internet. Their constant exposure to information and entertainment may have created a higher level of talent maturity—and of course the broad opportunities for personal exposure today make it easier for people in general (even oldsters like Susan Boyle) to find fame. There’s a lot more to consider about Gen Z, though . . .
For some useful insights, check out Penelope Trunk’s post What Generation Z Will Be Like at Work. In fact, browse around her Brazen Careerist blog, which offers young professionals frank advice “at the intersection of life and work.” If you’re not in or that familiar with Gen Y, a few minutes in Penelope Trunk’s world will give you a sense of how (and how much) it differs from Gen X.
Then consider that Gen Z is likely to be even more different its predecessor, and you have some idea of what it may be like to recruit the graduates of 2015 and beyond. Takeaway: Start thinking about the next wave of workers RIGHT NOW. These kids aren’t losing any time–and neither should businesses that want to grab the best and brightest ahead of their competition.
Needless to say, this will require a corporate website located on the leading edge of design, content, and functionality.
Connecting Brand Messages with Teens on the Social Web
June 14, 2010
The teen demographic is a coveted consumer audience that can drive big bucks to a business, and these days, teens spend a lot of time on the social Web. Whether they’re exchanging messages on Facebook or uploading videos to YouTube, they’re an active, influential group, and brands are desperately trying to connect with them.
In a May 2010 report, myYearbook and Ketchum revealed data about online teen influencers and how brands can engage them on the social Web. The most interesting results show the sources of information that U.S. teen influencers (i.e., the top 15% most active and engaged myYearbook members) trust the most are as follows:
- 52% trust friends
- 13% trust consumer reviews
- 9% trust adults
- 5% trust what they hear from ads
- 5% trust information that comes directly from companies
- 4% trust celebrities
- 3% trust bloggers
- 3% trust news reporters
- 7% trust other sources
If you try to remember what you were like as a teenager, then these results probably aren’t too surprising. The key for brands to connect with the teen audience on the social Web is to get teen online influencers to talk about them, recommend them, and share content from them.
Interestingly, most teens who responded to the survey indicated that they prefer to share humorous content with their friends online but prefer straightforward content from companies and brands. This shouldn’t be that surprising given that 2010 is the year of brand transparency for most consumer demographics.
Considering that the study also found that, “the top 15% of teen social network users are 70% more likely to share purchase decision information with their friends” (via eMarketer), brand managers would be wise to take note of the products teens are most likely to recommend and talk about with their online friends. As shown in the chart below, entertainment, electronics, new food or beverage, clothing, footwear and sneakers, video games, and makeup and skin care products are the most talked about products among teens who spend time on the social Web.
It’s important to note this doesn’t mean that other products aren’t discussed by teens at all on the social Web, but brands that operate in the channels listed above are missing a big opportunity if they’re not trying to engage teens on the social Web where they’re already spending time.
Corporate Reputation in the Financial Sector
June 11, 2010
In the financial sector, the trust stakeholders have placed in companies has been damaged both at industry and company level whether due to failures in governance, risk management or ethics, or due to excessive reward structures.
Companies need to take this issue seriously to rebuild their reputations. So what should they do?
There are three key groups of actions.
Demonstrate good practice and compliance
To start with:
- Given the visibility, dissection and discussion of the various problems that occurred in the sector, companies need to demonstrate good practice in all these problem areas even if during the crisis some or all of the issues did not impact them.
- If the company have been affected by issues, they should show how those areas have been addressed and verify that the actions have been done.
- They should be among the first to address new recommended industry practices (e.g. the Walker recommendations) and to communicate their compliance with them – and how they have met them.
Apply crisis management techniques
The second group of actions is related to standard crisis management techniques.
Few companies responded to the financial crisis by applying crisis management techniques to their online communications, for instance by:
- business leaders acknowledging mistakes
- empathising with stakeholders and indicating how seriously they take the issue
- describing the root causes of the problems
- stating the lessons learned
- providing their action plan to address the issues.
Even now, as we wonder if the storm has passed or if there is another to come, there is still an opportunity for companies to take a leadership position by communicating what their sector has learned from this.
Show – not tell – trustworthiness
The last area is for companies to outwardly demonstrate trustworthy behaviours in their actions and communications:
- better transparency means more explicit information on how you ensure effective oversight of the company, how you manage risk and how you incentivise your senior people
- better ethics means going beyond the standard code of ethics – and talking about how you embed ethics in your business through your training and compliance processes
- better listening means demonstratively providing the means to listen to – and interact better with – stakeholders through the channels you use – including the website.
June 22, 2010, London
“The past year has seen tremendous change in the financial services sector…
It is time, however, to look forward, to put the lessons from the past in context and look to see how communications professionals can focus on their reputation and position their companies, their products and their brands.”
Communicate Magazine
I could go on – indeed we’ve written a whole strategy piece on it (do contact us if you’d like to discuss it) – but I’m sure you get the idea.
The Communicate Magazine’s conference next week on Reputation in Financial Services explores strategies for managing corporate reputation, and will bring together industry experts and advisors to share best practice; there’s a strong programme, and many expert speakers lined up.
Do read the programme, and consider attending – it looks good.
The World’s Greenest Brands
June 11, 2010
The 5th annual ImagePower Green Brands Study sponsored by Landor Associates, Cohn & Wolfe, Etsy Environmental Partners (EEP), and Penn Schoen Berland (PSB) has been released.
The 2010 study polled more than 9,000 people in eight countries: the United States, the United Kingdom, Australia, Germany, Brazil, China, France, and India.
The results of the survey show that consumers continue to be concerned about the environmental-friendliness of products and brands. In fact, concern increased by 3.5% over 2009 results.
The 2010 ImagePower Green Brands Study reports the following conclusions, which you can read about in more detail on the Landor Associates blog:
- Most consumers want to buy from environmentally-friendly companies.
- The market for green products is growing in emerging economies.
- Environmental concerns vary by country.
- Hurdles to buying green vary by market.
- Consumers learn about green products and companies in different ways.
From a branding perspective, the study reveals that environmental consciousness is very important to consumers, ranking fourth in terms of what consumers are looking for in a brand behind providing a good value, being trustworthy, and caring about consumers.
So who is doing it right? In the United States, Burt’s Bees and Whole Foods Markets lead the pack as far as consumer perceptions related to being a green brand. In the United Kingdom, The Body Shop comes out on top, while Australian consumers rank Toyota number one. You can follow the link to see the complete list of green brands by country.
One of the biggest learnings from the 2010 study and the four annual studies conducted previously is the obvious difference between consumers in different countries related to the importance of green brands and the messages marketers should focus on related to the environment in order to appeal to those geographic differences in consumer perceptions. For example, consumers in the United States and the United Kingdom are more concerned with energy while consumers in Australia are more concerned with water management. In other words, a one-size-fits all green marketing plan won’t work as consumers become better educated around the world about the importance of companies and brands being environmentally conscious.
What brand do you think is doing a good job of being green? Leave a comment and share your thoughts.
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