What Makes for Effective Investor Relations Sites? Part 14: Engaging the Individual Investor
April 6, 2010
One of the Holy Grails for many investor relations departments is to achieve more ownership of their company’s stock by individuals. There are various and sundry reasons for this, including the fact that individual investors tend to keep their stock holdings for longer periods, become proponents of the company’s brands and advocates for the companies they own. One of the problems companies have is getting information to individual investors. They are dispersed and prefer their information in plain English as opposed to the dense technical prose and financial data most companies tend to use when delivering financial information. This makes getting information to individual investors expensive and requires extra effort, which usually means it doesn’t get done.
At least one of these obstacles can be overcome with the judicious use of an investor relations web site. Shareholder newsletters are a great way to reach out to individual investors, but in the past have been expensive to produce and distribute. The web and some publishing software now mean that almost any investor relations department can produce a shareholder’s newsletter at minimal cost. Time and effort still have to be devoted to writing and editing the newsletter, but you no longer have to write big checks to printers, designers and postal authorities.
Below, I’ve included samples from Total, the French energy company and EADS, the European aerospace company. The two companies take differing approaches with their newsletters, with Total focusing more on descriptions of the company and its employees while EADS spends more space discussing financial results, but the point is that they are both geared towards non-technical investors. They both help individual investors understand the companies.
Both of these newsletters have the look of being professionally produced, but companies with smaller IR budgets than either Total or EADS can also produce good looking newsletters and distribute them via the web and email at minimal cost. The reward should then be a more stable and diverse investor base that supports your company.
In this series:
Previous post: Mobile access
Next post: Blogs
Ultimate Twitter Strategy Guide and Rules for IR – Corporate Tweets and Strategy
December 8, 2009
Section 1 of the Investor Relations Twitter Strategy Guide
Twitter Strategy Guide for IR Section 2 – Useful, Informative, Legally Defensible Twitter Tweets
For businesses to get value from Twitter, the company must generate a useful and informative feed of Twitter posts that compels users to “Follow” the company’s Twitter account. On the other hand, to avoid any potential problems with tweets made on Twitter, corporations must be careful not to accidentally publish misleading or misunderstood messages. Ensuring that both of these things happen on a regular basis is the crux of a useful IR Twitter strategy.
The person handling the IR Twitter postings should be an experienced professional already versed in the various rules and regulations regarding communications with investors and the general public. All the same rules that apply to phone calls, emails, letters, and in person conversations apply to messages posted to Twitter. In other words, if you can’t say it on a person-to-person phone call with the SEC’s top enforcement watchdog listening in, you can’t tweet it either!
Lastly, do not confuse the conversational nature of Twitter with actual conversation. Every post made to Twitter is in writing! If it couldn’t be typed on official company letterhead with an executive signature at the bottom, then it can’t be posted to Twitter either. This simple distinction can save IR a lot of trouble.
1) – Tweet Daily
Everyone knows Twitter is about fast real-time communication, but it also about constant communication. Twitter feeds with occasional tweets drop quickly from view. Power Twitter users follow dozens or hundreds of other users. Keeping up with all of those tweets requires users to triage the inflow. A once a week message from an account is just too likely to be skipped, missed, or buried to provide value. Don’t worry about posting tweets on weekends or holidays. No one will be surprised when a corporate Twitter stream goes dark during non-business hours.
a) How To Tweet Daily
Coming up with a new tweet every day may seem daunting at first. However, remember that Twitter’s value lies in being part of the conversation, not in just broadcasting your own communications. Responding to direct questions, responding to general statements made in the “Twitter-sphere”, and even responding to media stories or events can (and should) be part of the Twitter strategy. It can be several days or more in between each originating tweet.
2) – No Junk Tweets
Every tweet needs to be worthwhile to keep the company’s Twitter feed on the must follow list for shareholders, potential shareholders, and analysts. No interview about Twitter usage is complete without the declaration that communications are important, and there are no tweets about what was eaten for dinner. Don’t let your tweets become the corporate equivalent of meal tweets.
3) – No Coupons, No Promos, No “Funny” News Links
Unless the IR group is the only official Twitter account for the entire corporation, chances are someone else is handling the smiley face side of social networking for the company. Investor relations is the most difficult Twitter communication channel there is. Don’t make it any harder by trying to be something else. Besides, the people you actually want following your IR tweet stream are serious about being shareholders, becoming shareholders, or analyzing the company. The followers you don’t want are the jokers, pranksters, agitators, looky-loos, or others who are not serious about investments in the company. Don’t give them a reason to follow you. Unlike other accounts that might be looking to increase exposure and publicity, if a IR tweet goes “viral” it is probably a bad thing.
4) Speak With Links – The 140 characters allowed for tweets posted to Twitter is too short to be useful for IR – Period – End of Story – No ifs ands or buts. It is too short. Never forget that.
The maximum protection from any legal or regulatory issue, plus the best way to avoid any misunderstanding or confusion, is to let links do the talking.
In an earlier article we discussed examples of Twitter trouble for IR. The carefully crafted statement and meticulously crafted wording in an official company statement about a recent dividend cut was not short enough to be tweeted. Trying to tease out a shorter, but equally accurate and legally sufficient tweet of 140 characters is liability suicide. However a tweet that directs Twitter users to the original statement is not only completely defensible, but incredibly easy.
Example IR Tweet:
@CrankyInvestor – Look here for that information about the dividend cut. http://bit.ly/6UKFaR
This tweet is well under 140 characters. It provides a link to a webpage with the original full length statement complete with all disclaimers and notices.
Notice the difference between a response to a Twitter user’s specific tweet and an unrelated random tweet about a new press release. Which brings us to…
5) Don’t Tweet Press Releases – Remember no junk tweets! If people wanted to read the company’s press releases whenever they just happened to come out, they would be reading them on the website, or more likely subscribed to either email delivery, RSS feed, or other notification. Tweeting a link to a press release or other information only when asked about, makes it a relevant and helpful tweet. Doing the same thing at 1:14 P.M. for a press release sent out at 1:13 P.M. makes it tweet-spam.
6) ALWAYS: “Look into,” “Check on,” “Investigate,” “Pass On” – Speed is what makes Twitter so powerful. It can also become intoxicating. Resist the temptation to fire off replies or other tweets at the spur of the moment. Twitter may be real-time, but it is not chat.
The reflex tweets sent right away are the ones that will end up causing trouble down the road. Unless you have already considered a similar reply and have a link at the ready, don’t tweet. If a reply is required, but none is ready, simply tweet that you will look into it and get back to them. For users that offer suggestions or other unsolicited advice or information, simply say that you will pass their comments on, or otherwise make sure the right people see them. Don’t promise anything.
@CrankyInvestor – I’ll check on that and let you know.
7) NEVER SAY: Promise, Guarantee, Never, Always, Obviously… – Certain words carry a literal meaning that you do not want associated with things you say on behalf of investor relations. These words include any form of promise, any form of complete exclusion (never) or complete inclusion (always). Also troublesome are words that imply that there is no question about something, or that something is common knowledge. These are standards the IR group does not want to be held to in a court room or regulatory action. Create a list of banned words and post them on every computer that will be used to send official tweets.
8) Be Careful With Re-Tweet – Recall all the hoops the IR department had to jump through to link out to another website while staying in compliance with all rules and regulations. Re-tweeting is just as dicey. Whenever possible, avoid it altogether.
These tips should get most IR groups up and running with a successful Twitter for business strategy. What comes next is being able to successfully manage Twitter conversations for businesses. For that, additional utilities and a little bit of advanced Twitter know how will be in order.
Complete Twitter Strategy Rules Guide for Investor Relations – Creating Official Corporate Tweets
December 3, 2009
Twitter mania is everywhere. Whether the quickly deafening crescendo heralds a change in the world’s communication paradigm, or the impending pop of the social networking bubble remains to be seen. What cannot be ignored is that businesses are embracing Twitter for the benefits they can gain from direct, real-time, two-way communication with consumers and business partners. It is only a matter of time before shareholders and company executives alike start asking, “Where is the company’s investor relations on Twitter?”
Twitter Is Different for IR
Jumping on the Twitter bandwagon and establishing a corporate presence is a simple task. The most difficult part of the whole process might be chasing someone off of the username that is the company’s registered trademark.
Otherwise, creating a Twitter account with a username, and typing in sub-140 character messages is a no-brainer. Bragging about company achievements, talking up new products, sending out links to coupons, or even just reminding the business’ followers about the company are par for the course when it comes to business Twitter usage.
Unfortunately, for the Investor Relations Department things are not so easy. There are legal pitfalls to Twitter for business use, as well as regulatory requirements for publicly traded companies on Twitter. Don’t forget, that the whole Twitter business is moot if the tweets the company sends out don’t add up to the kind of Twitter feed that people follow. Between the prospect of getting the company in legal trouble, developing a robust following, responding to shareholder concerns in a fast-moving forum, and just coming up with something to say in the company’s tweets, can tie the most technically savvy IR department in knots.
Fortunately, Twitter for Investor Relations can be broken down into an easily manageable process that provides tangible benefits for the corporation, the shareholders, and IR. This guide provides a step-by-step plan to get a business Twitter strategy running quickly. After all, quick communication is what Twitter is all about.
Rules and Strategy Guide to Twitter for Business Investor Relations
1) – Tweet Officially
a) Link to Official Twitter Account – Don’t make shareholders or analysts guess about your intentions. If you are going to use Twitter or other social networks to communicate with shareholders and others, make it official. Have a link directly from the Investor Relations landing page to the IR Twitter account along with a statement that this is the official Twitter account for corporate IR news. You don’t have to explicitly say it, but the implication is that anything else out there on Twitter, is rumor, innuendo, or speculation from non-official sources.
b) Have a Specific Twitter Account For Investor Relations – Do not use an umbrella corporate Twitter account. Do not share a Twitter username with any other department or purpose other than Investor Relations. Any lawyer with 5 minutes of experience knows that the quickest way to defeat legal protections is to show examples where these were violated, ignored, or otherwise misused or unused. In other words, your carefully crafted disclaimers, tweets, and links will all be for naught if the marketing guys throw up even a single tweet with hyperbole that proves not every precaution to ensure all information posted on Twitter is accurate. Use an IR only account and include IR or some other identifier in its name.
2) Create A Disclaimer Specifically for Twitter – The temptation to just use one of the standard disclaimers for Twitter is understandable. However, Twitter is unlike any other form of communication already engaged in, and it needs its own disclaimer. Do include as much of the standard boilerplate disclaimers as necessary, but also include Twitter specific information.
3) Post Twitter Disclaimers – Immediately next to your link to the official Twitter account, place a Twitter disclaimer. There will actually be two Twitter disclaimers required. The first is the short and sweet one that goes with the official link to the official Twitter account. The second is the one that is as long as the lawyers want it to be. The last sentence of the short one should be an “important note” that this is only the quick disclaimer and a link to the full disclaimer.
4) Create Twitter Terms of Use or Twitter Terms and Conditions – Disclaimers are one thing. Terms or Conditions of usage are another. Draw up Twitter specific terms to help protect the company against mistakes. Wal-mart created a stir with its laundry list of terms, which it has relabeled as “Twitter Discussion Guidelines.” The provide an excellent starting point for creating Twitter TOS.
5) Require Acceptance of the TOS or TOC – The software industry pioneered the concept of forcing consumers to agree to something without actually asking. CDs or Floppy Disks came in envelopes that said by opening the envelope you agreed to a whole list of terms and conditions. U.S. Courts have repeatedly upheld these “contracts” as valid. Do the same thing for your Twitter account. Use the “Bio” section to include a sentence which states that following or reading the posts on Twitter constitute acceptance of your terms of use.
6) Accept Limitations on These Safety Features – Disclaimers and Terms and Conditions can go a long way toward shutting the door on many avenues of liability. However, what stands up against a tort claim in court, and what stands up against the actions of a governmental regulatory agency such as the SEC, are two very different things. However, do not neglect these important safeguards. For every avenue of attack the company eliminates, the less chance there is for something to “stick.” – Following the rest of this IR Twitter guide will help provide more legal and regulatory protection.
With official Twitter accounts, disclaimers, and terms in place, the company’s investor relations department has done everything it can reasonably be expected to do in order to protect the company from unforeseen Twitter liability issues. Now, investor relations is ready to Tweet. What to tweet and how to keep what IR posts on Twitter from causing trouble is the next piece of Twitter strategy to get into place. Getting the corporate IR Twitter posting strategy right is next.
Avoiding Twitter Trouble – Legal and Regulatory Issues for Investor Relations
November 11, 2009
When it comes to using Twitter for Investor Relations, one of the first issues to jump into people’s heads – especially people who went to law school – is how to comply with the wide range of rules and requirements that regulate corporate communications with investors. However, some simple strategies can help you avoid most IR difficulties.
Twitter and IR – What Are the Rules?
One of the difficulties in establishing a Twitter strategy for business and investor relations is the lack of formal rules or regulations. Many pundits point to the recent interpretive guidance published by the Securities and Exchange Commission in August 2008 in analyzing how the SEC stands on using online resources such as Twitter. However, this is badly misguided.
The guidance published by the SEC is specific to the official website of the corporation and has no applicability to un-owned, or uncontrolled websites and services such as Twitter. Indeed, the SEC guidance expressly details several features that must be present and several that should not be present on the company IR site in order to be recognized as acceptable under these guidelines. Obviously, the company will have no control in either adding or removing such elements from social networking sites such as Twitter.
Thus, the rules that apply to Twitter are the same rules that apply to all IR communications. The challenge, then, is not in finding and understanding new rules, but rather applying the old rules to a new venue.
Twitter Trouble Pitfalls
The issues that seem to raise the most concern are the improper release of inside or material information on Twitter. Ironically, this is likely to be among the easiest problems to avoid. After all, employees and executives in the IR Department have been dealing with this very same issue for years in every other existing form of media. The same training and experience that ensure that no investor relations professional makes inappropriate remarks during interviews, in emails, letters, or phone calls can provide the same security when it comes to posting official company tweets as well.
The real difficulty lies in being unable to implement the safety mechanisms that have been used by IR for years in communicating with the public. Many of the key phrases, approved wording, and the like are simply too cumbersome to fit into Twitter’s tiny allowable message size.
For example, an IR Department Manager named Lisa is heading up her company’s new real-time communications strategy on Twitter. Lisa is a smart, dedicated, employee with plenty of experience who understands the rules and regulations that govern investor communications. Her responses to many inquiries are well rehearsed and perfectly legal in every way.
Lisa is responding to a shareholder’s question, posted in breathless fashion as a tweet on Twitter, regarding the company’s recent decision to reduce the shareholder dividend in a difficult economic environment. The question insinuates many unfounded and negative fears and opinions about what happened to the dividend, and why. Lisa has already worked with upper-management and the legal department on how to best answer these queries and has done so numerous times since the decision was first announced. However, there is a growing chorus, mostly online, that the company is in dire trouble and that this is only the beginning of many terrible actions to come. Some are even claiming to have “inside” information, or a contact within the company that is secretly letting them in on how bad things really are.
This scenario is all too real and happens all too often. However, it is also precisely the kind of situation that can be helped quickly by using Twitter. The vast majority of muckrakers and naysayers on the web are not only misconstruing the situation, they aren’t even shareholders, and most have done no more analysis than read a concerned headline or two before drawing big conclusions. While such people will not be mollified by any communication, on Twitter or otherwise, the real shareholders and real analysts will take seriously an official reaction coming from the company.
Of course, this possibility has existed all along, for any shareholder willing to contact the company directly, or who has subscribed to communications from the corporation. Unfortunately, to many Main Street investors, these possibilities don’t occur to them, and instead, they assume that the company is encamped inside its corporate walls in deliberate, and telling, silence.
The value Twitter brings to IR communications is the ability to “pop-up” and provide answers to any user that has “followed” the company. Just as important, that same message can carry on second-hand, but still as an official answer, to the followers of anyone that re-tweets the company’s message. As an added bonus, the company’s official message will continue to be available on Twitter to those investors and potential investors whose concern comes after this particular wave, as an item they can reference and verify themselves simply by scrolling back through the company’s tweets.
Of course, these same factors are the reason it is critical to get the message right the first time.
Just Too Big for Twitter
The answer Lisa wants to give goes something like:
“While the Board of Directors recognizes the company’s long history of increasing dividend payments, as well as the importance of the dividend to the company and its shareholders, it was determined, after analyzing several possibilities and consulting with both management and other experts, that it was in the best long-term interests of both the company and its shareholders to reduce the dividend at this time.”
Obviously, this is much longer than 140 characters (414 characters according to my word processor). The danger arises as Lisa tries to pare down the language to fit into Twitter’s restrictive size requirement.
The difficulty lies primarily in attempting to reconstruct the non-committal nature of such statements with the intention to communicate the possibility of improvements more to the shareholder’s liking. For example, note how the statement gives the impression that this reduction is neither permanent, nor standard course, but avoids stating either explicitly. It also vaguely alludes to the fact that other alternatives were considered, though it makes no mention of how seriously those options were looked at, nor how much more appealing those alternatives might have been to stockholders. This statement also tries to position the company and shareholders on the same side, while stopping short of any characterization of the company action as it relates to shareholder wishes.
Not to mention, when given in writing, this statement is no doubt included with a disclosure statement.
All of this is accomplished with the careful consideration of exactly what words are used. Trying to recreate the same effect with fewer words is tricky at best. In fact, a typical “forward looking statements” disclosure takes more than 140 characters. (Just the phrase forward looking statements is 26 characters.)
In order to successfully execute a social media strategy, investor relations executives like Lisa, need a solid, reproducible strategy to ensure that they create useful, ongoing, tweets, without opening the company up to additional liability. Fortunately, a few simple tricks can give any IR Department all the latitude they need to create and respond to posts on Twitter.
In my next post, see what Lisa and other Investor Relations Groups Need: Complete Twitter Strategy Rules for Investor Relations.
Successful Investor Relations Communications on Twitter
November 3, 2009
A well-followed and useful business Twitter strategy can be a powerful new investor relations tool for many companies. However, an unfocused, boring, and ignored Twitter feed will not only fail to provide new channels for shareholder communications, but will also drain resources that could be better utilized elsewhere. While the IR community is rife with admonishments about why you have to be using Twitter, it seems painfully lacking in information about just HOW Investor Relations should be using Twitter.
Get Twitter Followers By Being Follow-Worthy
When Twitter first came out it was widely regarded as a plaything for kids and certain kinds of Internet obsessed geeks. As Twitter’s potential became more widely recognized, more and more uses were found. These days, it is not uncommon for people from all levels of business to be involved with Twitter. However, those early days are not easily forgotten. Most interviews with high-ranking business people regarding Twitter include a semi-defensive cliché about how they “don’t tweet about what they had for dinner.”
As an IR professional of a publicly traded company, there are obviously some issues regarding what kind of information a company should not tweet, and what a business should tweet; we aren’t just talking about not telling people what you had for dinner last night, either.
Investor Relations professionals should already have a feel for the big red flags such as undisclosed material information. Only the most naïve IR person would post their company’s earnings ahead of the official disclosure and accompanying press releases, but there are plenty of other dangers that aren’t so obvious.
However, the biggest mistake you can make in developing your business’ Twitter strategy rollout is to unduly limit your tweets until they become either too sporadic, or too uninformative for anyone to care about. Otherwise, your Twitter campaign is no more useful than standing out in front of the building with a white board. Simply tweeting about your press releases might sound like a good strategy. However, tweeting links to press releases is the corporate version of telling everyone what you had for dinner last night.
Twitter isn’t about getting second hand news via a link to something you already told everyone somewhere else. To build up a useful number of followers on Twitter requires tailoring your strategy to the specific appetites of the Twitter microcosm.
So, just what do the users of Twitter want?
The answer to that question lies in the nature of Twitter itself. Remember that Twitter’s value is that it provides its users with an immediate, ongoing, brief, stream of information delivered directly to the user in real-time without any action being taken other than choosing to follow another Twitter member. Developing a useful and follow-able Twitter feed requires nothing more than incorporating those elements.
Keys To Successful Investor Relations Twitter Feed
Taking into account how Twitter works and what Twitters want generates a handful of rules for a successful corporate tweet strategy.
5 Keys To Good IR Twitter Tweets
1. Tweet Now – Immediate information is the cornerstone of Twitter’s value proposition. Don’t tweet tomorrow about today’s news.
2. Tweet Often – Engaging followers requires feeding the beast. Tweet every business day.
3. Tweet Short – The big power of Twitter requires getting re-tweets. Leave enough room for the “standardized” RT @ information.
4. Tweet Value – Whatever you tweet, make sure it matters to someone besides the people on the org chart.
5. Tweet Community – Twitter isn’t a lecture; it’s a conversation.
At first glance, the keys to the best IR Twitter feeds can seem daunting. How would event the best IR group come up with useful, real-time, information, on a daily basis?
While Tweet Community is the fifth element of good IR Twitter usage, it is also the most important secret to success with Twitter by not only Investor Relations, but corporations, and businesses as well.
The reason a daily tweet seems so daunting is because, most IR professionals are used to one-way communications. That is, investor relations creates a press release or other investor materials and then distributes those to investors and potential investors. Any feedback comes in the form of phone calls, emails, letters, or even articles published in the media. In other words, IR talks, the others reply.
With Twitter, things are very different. The IR Department using Twitter will, of course, make tweets of their own accord, but the real value in maintaining an active presence on Twitter is interacting with other Twitter users. Read beyond the headlines of all those articles out there proclaiming that your company must be on Twitter and you’ll find that the examples they cite about Twitter’s power aren’t about sending out coupons or linking to your press releases. The examples all relate to engaging the user community on Twitter by answering questions, reading reactions, providing useful information, and so on.
It all adds up to the best investor relations strategy for Twitter not being creating great tweets, but rather, responding to other user’s tweets. Answer not only the questions you get directly, but also those that are posted by users as a broadcast or “open-letter” type of tweet. Respond to innuendo and suggestive tweets publicly before they can turn into “facts” by repetition alone. Don’t forget to ask questions too! Ask what people want to see more of, what they want to see less of, what they think has value, and what they think is nothing but a waste of energy.
While it may start out small, a useful corporate Twitter account will grow quickly adding lots of followers, sometimes in spurts, and sometimes in a trickle. Either way, a few months down the road, the question won’t be how can we possibly come up with one useful tweet per day, it will be how can we possibly tweet only once per day?
Potential Legal Trouble – Twitter and Investor Relations
Get our updates
 |