When people think of Investor Relations firms they often think that they are expensive and not worth the money they are paid. That may be true in some instances, but that is not a reflection on the Investor Relations industry but rather that firm itself. As with many other industries the times have changed and a good IR firm has evolved with the times. The days of paying a fortune for a firm to produce news releases is gone, or it should be. The role of an IR firm has evolved and is now much more complex. Among other things, a much more important role is now played in the financing strategies of public companies.
A good IR firm will concentrate on the quality of service it offers its clients and not solely on expanding its client base. Too often a firm is judged on the number of clients it has signed but the real success meter lies in the satisfaction of those clients. A great IR firm should be able to say to potential clients: “Here is a list of my existing clients, call them and ask them if they are satisfied with the service provided to them by our firm.” In addition to playing a major role in helping you develop your business, your IR firm should act as a genuine bridge between you and the financial community. The main objective of the firm is to help its clients tell their story from an early stage of development in the company and make sure the story is developed the way management requests.
Visibility is a big part of the IR firm’s responsibilities but it begs the question: is general visibility on web browsers and cell phones enough? For many businesses direct marketing is a lot cheaper and so much more effective; telling the right story to the right audience remains the key to a successful IR campaign. This seems to be forgotten in the industry. People want to talk about how vast an audience they have, and that’s great, but how much of that audience will have a direct effect on your company’s success? You wouldn’t tell a group of children a story that is not accessible to them; it simply wouldn’t be understood. The same is true about telling your corporate story: do not squander your energy on an audience that is not interested or relevant to your goals. Making sure the IR firm has access to a vast number of financial fund managers and investors is a key factor in ensuring the financial success of the client.
As an Investor Relations firm you should exhaustively explore with your clients what their needs are and what they expect from your firm. By doing so, you can work together to forge effective goals and meet their demands. Too often firm reps do not spend enough time with the client in order to analyze what the company will need, rather they simply assume that they know best and will do everything themselves. The whole process ought to be a collaborative team effort; knowing and understanding what is expected of you will allow the partnership to last a long time and be demonstrably more effective.
A goal-oriented public company, as well as a competent IR firm, should be looking at the larger picture rather than simply concentrating on wooing the small cap investor. Admittedly, small cap investors are extremely important and should be a focus point for the IR campaigns of emerging companies. However, fund managers should also be part of the campaign and that point must be addressed when working with the client to answer, for instance, long term exploration programs.
To manage an effective IR campaign one needs to focus on the basics: open communication with clients, really listening to what the client needs and wants, and forging a collaborative plan of attack to help them achieve their goals. This will maximize the potential to ensure the customer’s financial success as well as securing their satisfaction with the investor relations campaign.
Robert Allen is the CEO of Hawlen Bay Consulting Corporation in Val-d’Or, Quebec. Hawlen Bay is a full service investor relations firm. You can reach Mr. Allen at 1-888-825-2103 or by email at ballen@hawlenbay.com.
Since 2005 ITB Solutions has provided listings development services to stock Exchanges in Canada such as the Canadian Securities Exchange. ITB Solutions currently provides New Listing Services to the NEO Exchange. We assist companies with the listing application and managing the process to become publicly tradable in Canada, as well as offering advice on how to make the most of your public listing. You can reach Jeffrey Stanger at 647-500-0492 or by email at jeffrey@itbsolutions.ca