Experts now anticipate the economy will begin showing signs of a sustained recovery some time in the second half of 2009. And when that time comes, investors will enjoy a buyers' market filled with incredibly low valuations of household-name stocks. As a result, lower-profile companies in particular will have to work harder than ever to regain the attention of the Street.
Will your investor relations program be ready for the recovery? Here are a few ways to make sure the answer is yes:
• Massage your messaging. Just saying that you are managing costs and are well-positioned for the rebound does not count as refined messaging. That's simply repeating what everyone else is saying. Focus your messaging on your liquidity and how you will be able to efficiently self-fund specific near-term growth opportunities. Where are your growth areas? What are you doing to access them? How will the tangible and intangible assets you utilized to survive during bad times enable you to thrive during good times?
• Don't be anti-social (media). Since investors now rely more heavily on the Web for “free” data when identifying and evaluating investment ideas, your Web site should be more than simply an online news release repository. Think of it instead as a 24-hour “call center.”
Also, don't assume social media tools such as Twitter, blogs or Flickr are just for your marketing colleagues. These can be highly effective in raising your profile with investors. For example, General Electric (not a client) uses Twitter @GE_Reports as another channel to engage investors, and according to its Twitter bio, keep the marketplace abreast of “what's happening at GE.” Among other things, these Twitter posting include links to press releases and other new content to GE's Web site.
• Map your course. During a market recovery, competition for quality investors will be ferocious. Therefore, you will likely need to consider alternative roads to the Street. First, target current shareholders in your stock that have the capacity to build their positions. Second, target investors in your own backyard where you have a higher name recognition and relationships that can quickly gain you an audience with key decision makers. Finally, make time for brokerage houses, which can help tap into the retail community. In times like these, retail investors have increased buying power and can serve as an important voting block during proxy season.
As the economy improves, 2009 will offer unique opportunities for companies with compelling growth strategies and the resources to fund them. Now is the time to get your IR program retooled for the recovery.
Rob Berick is a MD of Dix & Eaton, a communications consultancy with specialized expertise in investor relations.