As the global economy grapples with the impacts of a volatile market, investor relations officers struggle with how to respond to these new conditions. Many IROs may feel there isn’t much they can control right now. However, there are several things IROs can do to retake control of their investment narrative as they adapt to the new market landscape.
A recent poll of economists from the Wall Street Journal puts the chances of a recession in 2023 at 61%. As businesses navigate a volatile market, you, as an IR professional, must maintain the trust of stakeholders, demonstrate stability, and show a clear path to success. Clear communication during economic uncertainty is critical. In fact, the consequences of insufficient or unsuccessful communication from investor relations teams can be disastrous … for you or your company.
In a recent report, PricewaterhouseCoopers reported that nearly 80% of American consumers point to speed, convenience, knowledgeable help, and friendly service as the most important elements of a positive customer experience. However, again and again, we hear a familiar story. An investor relations (IR) professional notices they need to make changes on the investor relations site. When trying to make the updates, they immediately run into roadblocks as they struggle to get the website up to date because of slow or unresponsive service from their current provider. This should never be the case, as investor relations professionals should always expect a seamless investor relations website support experience.
Targeting the right investors is crucial to growing your shareholder base and boosting your company’s liquidity and visibility. But developing and implementing an effective investor targeting plan isn’t always a walk in the park. We identified some common IRO targeting hurdles, including time and budget restraints and the nuances of today’s changing investors.
Sales have their quota, and marketing has qualified leads, but how should Investor Relations Officers (IROs) measure the success? The answer is likely debatable by industry professionals, but the impact should somehow determine success. But what defines a positive effect? How is it quantified? And how can IROs leverage today’s tools to measure and report on their IR program? We sat down with Q4’s Matt, our Investor Relations Partner and a former IRO with two decades of experience. Here he shines a light on investor relations KPIs (Key Performance Indicators) for measuring success.
Last Wednesday, March 8, 2023, Silicon Valley Bank announced that it had sold about $21 billion of assets taking a $1.8 billion loss on the sales. They also announced an equity offering to address recent financial concerns, including a potential downgrade by Moodys. On Thursday, depositors began withdrawing their cash balances. Customers of the bank were possibly made even more fearful by warnings from a number of private equity firms who had backed their early funding and were reported to have recommended the withdrawals. Over the course of the day, the bank’s customers withdrew $42 billion. To put that in perspective, when Washington Mutual failed in 2008, it was the largest bank failure ever. Customers of Washington Mutual drove the bank to collapse by withdrawing almost $17 billion over 10 days.
Think back to the last time you made a big purchase decision. What was the sales process like? Did the person helping you navigate your purchase get to know you? If they did, would you have been more likely to buy? The data says yes.
Just a few months ago, the prevailing sentiment was that the economy is or will soon be in a recession. Economists like Mark Zandi, chief economist at Moody’s Analytics, recently said, “Historically, when you have high inflation, and the Fed is jacking up interest rates to quell inflation, that results in a downturn or recession.” Just like Mark predicted, over the last several months, the Fed proactively addressed inflation by raising interest rates while reducing its asset holdings with the goal of creating a “soft landing.” But, contrary to that kind of prediction, the results of these actions have been improved forecasts for both employment and retail sales, which are usually indicators of a healthy economy. So now, instead of facing an inevitable recession, we are dealing with market instability. This market volatility has created an uncertain vision of the short and long-term landscape for IROs.
In an environment of uncertain macroeconomic conditions, static or declining Investor Relations budgets, and significant innovations in capital markets communications, your IR peers at competitor companies are finding never-before-seen ways to quantity, demonstrate, and improve the performance of their function, but often struggle to get accurate engagement benchmarking.
Over the past five years, investor relations tools have been transformed by what began with regulatory changes with the Markets in Financial Instruments Directive (MiFID II), then a global pandemic, and finally, the extraordinary headwinds from a tumultuous year in the capital markets.