Contemporary Investor Relations needs to be conducted on the Client Side; here is why:
(presentation at bottom)
Back in the late 90s and into the first decade of the 2000s, IR firms, especially at the microcap level used the “CENTRAL HUB” information distribution model with a great deal of success.
What do I mean by central hub?
Most of the Investor Relations Firms in existence today use their website, their social media platforms and their consolidated email lists to post news releases and company updates on behalf of their client companies.
However, all of the links to read the entire news release or company update take the reader back to the IR Firm’s website.
All this does is build the IR Firm’s authority… It does little for the client company.
What about the client company’s website, their social media platforms or their email list?
Many IR Firms today take over the client company’s social media platforms. When the client has news, they post it but, once again, the link goes back to the IR Firm’s website.
The Internet has changed considerably in just the last few years. Investors and their thinking have changed as well.
They are more interested in finding their own investments.
Of the 407 microcap investors we spoke with in our 5 year study, very few expressed any interest in following an IR Firm’s lead with regard to investing in a particular company.
Today’s investors take a dim view of stock promotion and IR Firms.
This is why I believe CLIENT SIDE Investor Relations is the only way to be successful in investor participation on the retail side of the market. And, as we know, it is the retail investor that provides stock liquidity that is so sorely needed by many microcap companies.
Maybe I am beating this to death but the Client Side IR is a successful model.
Does it make sense that if the client company’s website, social media platforms and email list was used on behalf of the client, would it not make the client look much more self-sufficient and credible in investor’s eyes?
What does it take to pull this off?
The client’s website needs to have an excellent appearance, be mobile responsive (because well over half of your prospective investors are going to be looking at the site on a mobile device), have a comprehensive investor page or site and, as I pointed out in a previous article, a NewsRoom to filter in many more prospective investors.
Social Media platforms need to be active and not only cover company news but useful industry news as well. If the social media platform is used as a “broadcasting platform” for only investor related messages, it will not get any engagement. The Twitterverse is full of company accounts that are broadcasting platforms with no engagement.
Another counterproductive thing that IR and Promotional entities do is build the client company’s Twitter followers and Facebook likes. They do this not by engagement but through purchasing additional followers and likes via fake accounts.
It is a numbers game to them. In reality, it is an engagement game; you will not get any engagement with fake Twitter accounts and fake likes on Facebook.
These fake accounts are obvious and when investors go to the company’s Twitter account and see all these fake accounts, they know the company cheated. It is an instant loss of credibility.
In summary, client side investor relations is a lot of work but it does work.