Regardless of industry, shareholders (and those that influence them, such as media and analysts) are a core audience. So what are the best ways to “touch” these key stakeholders, and build a loyal shareholder following?
In the age of “what have you done for me lately?” investors are increasingly fickle. The ability to retain investors for the long term drives valuation. To help those willing, we’ve identified key Investor & Media Relations concepts that every management team (of publicly traded companies or companies that wish to become public) should understand, and address.
Create (and articulate) a strategic plan.
Long term thinking in a short term world. It is not impossible, but must be strategi¬cally coordinated across your organization, and articulated in a way that investors understand, believe and support. Investors must understand the direction your company is headed and develop reasonable expectations for determining success. If inves¬tors’ goals are met, they will provide you with the capital “runway” to execute your vision.
Invest in online.
Unsurprisingly, companies, investors and other stakeholders are now shifting their focus to the Internet. Investors need (and want) to be steered to the web when¬ever there are significant corporate events. Annual reports, recorded earnings calls, conference presenta¬tions and other investor updates should be available through the website. By keeping investors on your site, you control the interaction and can help shape investors’ perceptions.
The annual report is still your most important investor touchpoint.
Despite the preponderance of other material available to investors, the annual is still king. Take the time and effort to ensure a satisfac¬tory product that delivers the proper message to investors. Of primary importance: lay the foundation for investor expectations in the CEO’s letter. This is the bar against which investors measure fundamental execution.
Analyst coverage helps drive loyalty.
Getting analyst coverage will benefit corpo¬rations in both investor interest and market valuation. Investors need assistance with due diligence, and analysts provide this service.
Press coverage is essential to building (and maintaining) a broad investor base.
There is no better way to inform investors of your story than through unbiased local trades and national media. Seize every opportunity to present your firm to the outside world, and leverage your coverage online.
There is no such thing as too much investor communication.
Your strategic plan must be delivered to investors. Never catch investors by surprise. Pre-announce earnings dates, conference calls and speaking engagements. Let investors know what to expect, and when to expect it.
Focus on running your business.
Whether it is accomplished internally or out¬sourced professionally, Investor Relations is a full time job. Do not expect your CEO, CFO, or other professional to be able to compe¬tently handle both their job and IR duties. Investors expect, and deserve, the attention that an “ownership” stake implies. Of course, not all investors are created equal any more than your customers are.
Investors may be your most important customers
Without an equity valuation, your busi¬ness would disappear. Deal with investors honestly and professionally. Never ignore investor questions, but respond immediately. Creating loyalty is an important step towards achieving success as a public company.
Regardless of industry, shareholders (and those that influence them, such as media and analysts) are a core audience. So what are the best ways to “touch” these key stakeholders, and build a loyal shareholder following?
In the age of “what have you done for me lately?” investors are increasingly fickle. The ability to retain investors for the long term drives valuation. To help those willing, we’ve identified key Investor & Media Relations concepts that every management team (of publicly traded companies or companies that wish to become public) should understand, and address.
Create (and articulate) a strategic plan. Long term thinking in a short term world. It is not impossible, but must be strategically coordinated across your organization, and articulated in a way that investors understand, believe and support. Investors must understand the direction your company is headed and develop reasonable expectations for determining success. If investors’ goals are met, they will provide you with the capital “runway” to execute your vision.
Invest in online. Unsurprisingly, companies, investors and other stakeholders are now shifting their focus to the internet. Investors need (and want) to be steered to the web whenever there are significant corporate events. Annual reports, recorded earnings calls, conference presentations and other investor updates should be available through the website. By keeping investors on your site, you control the interaction and can help shape investors’ perceptions.
The annual report is still your most important investor touchpoint. Despite the preponderance of other material available to investors, the annual is still king. Take the time and effort to ensure a satisfactory product that delivers the proper message to investors. Of primary importance: lay the foundation for investor expectations in the CEO’s letter. This is the bar against which investors measure fundamental execution.
Analyst coverage helps drive loyalty. Getting analyst coverage will benefit corporations in both investor interest and market valuation. Investors need assistance with due diligence, and analysts provide this service.
Press coverage is essential to building (and maintaining) a broad investor base. There is no better way to inform investors of your story than through unbiased local trades and national media. Seize every opportunity to present your firm to the outside world, and leverage your coverage online.
There is no such thing as too much investor communication. Your strategic plan must be delivered to investors. Never catch investors by surprise. Pre-announce earnings dates, conference calls and speaking engagements. Let investors know what to expect, and when to expect it.
Focus on running your business. Whether it is accomplished internally or outsourced professionally, Investor Relations is a full time job. Do not expect your CEO, CFO, or other professional to be able to competently handle both their job and IR duties. Investors expect, and deserve, the attention that an “ownership” stake implies. Of course, not all investors are created equal, any more than your customers are.
Investors may be your most important customers. Without an equity valuation, your business would disappear. Deal with investors honestly and professionally. Never ignore investor questions, but respond immediately. Creating loyalty is an important step towards achieving success as a public company.
Great strategy – whether brand, marketing customer experience or business management oriented (in our case, often all of the above!) – can only succeed if it’s actually implemented.
I’ve heard executives talk about the importance strategic planning is given within an organization, and I’ve seen much of the impressive output from expensive consultants.
And while it’s easy to bash these 100-plus page PowerPoint “paper bricks” that often end up gathering dust when some other consulting firm produces them, my tune changes pretty quickly when it’s our recommendations sitting neglected on the shelf.
The fact is, great strategy – whether brand, marketing, customer experience or business management oriented – can only succeed if it’s actually implemented. When something goes wrong or nothing happens, it can leave the organization unchanged or (even worse) only partway through a critical process.
A recent engagement with a growing financial services firm drove this point home … again. Where does it go wrong? While we see our job as the planners and champions of change, it takes internal leadership and motivation to drive it. Great leadership is about implementing change as well as developing the strategies to create change. You can’t have one without the other.
But not all leaders are naturally equipped, or empowered, to deal with the challenges that this role will throw at them. Whatever their “official” role (whether you’re leading from the top or the middle), leaders need to be able to drive strategic change in their organizations, and motivate others to join them.
I’m thinking we need to add a role to our toolbox: just call me Coach!
The Economy has slowed, but it has not (completely) stalled. Even as we plough through the unemployment statistics and wait for what most believe will be a long climb out of the “Great Recession,” as long as there are companies and people doing business, things will continue to be bought and sold. That’s why for many smart businesses, now is the time to grab this opportunity to increase customer loyalty, solidify market position, and get new customers.
The evidence is in, and supported by studies of every major slowdown since 1970: Marketing wins market share in recessionary times.
Studies conducted by organizations ranging from Business Week and Harvard Business Review to The Wall Street Journal support this contention, underlining the importance – and value – of marketing in an economic downturn.
In a study of U.S. recessions, McGraw-Hill Research analyzed 600 companies from 1980 to 1985 and concluded that at the end of 1985, “…firms that had maintained or increased their advertising during the 1981-1982 recession could boast an average sales growth of 275% over the preceding five years. Those who cut advertising realized a paltry increase of only 19%.”
Management Review asked AMA member firms about spending during the 1990-1991 recession. “Fortune follows the brave,” it announced, noting that the data showed that most firms that raised their marketing budgets enjoyed gains in market share.
And Harvard Business Review chimes in with this: “The rationale that a company can afford a cutback in advertising because everybody else is cutting back [is fallacious]. Rather than wait for business to return to normal, top executives should cash in on the opportunity that the rival companies are creating for them. The company courageous enough to stay in the fight when everyone else is playing safe can bring about a dramatic change in market position.”
The tipping point: where fear and opportunity collide
In spite of this overwhelming evidence, many companies are still tightening their belts, and the marketing budget is typically an early casualty. This is a mistake for two primary reasons. First, if you reduce spending on marketing, you will reduce the number of new customers. Direct marketing drives direct sales. And consistent brand presence is critical to keeping – and increasing – customer loyalty and prospect awareness. Second, (a direct result of the first reason) it is much easier to gain ground against competitors who have cut back on marketing. Why? It’s easier to drop below buyer radar as a result of decreased market presence.
This said, we recognize costs do need to be cut. So marketing smarter is more important than ever. From strategically leveraging social media tools to doing a better job of tracking brand, marketing and customer experience ROI, there are many ways to scale back dollars without dropping off the radar.
What’s the worst that can happen if you don’t step up your customer acquisition and recession activities?
You slowly leak customers and profits, and can’t keep the doors open long enough to participate in the recovery. It’s happened to plenty of companies already and there are many more to follow before we’re through. Or maybe you and your current competitor’s scale back your marketing, only to find a competitor you didn’t know existed come from behind to take over your market.
Today, the phrase “for every loser, there is a winner” has particular relevance. Your organization may be staying the course, cutting back or (let’s hope!) using this opportunity to aggressively dominate its market. No matter which direction you’re headed at the moment, it’s not too late to take steps to make sure you’re one of the winners. But don’t leave it too long…
1. Be Dominant: Many studies show that companies which slow marketing spending lose out now, as well as after a recovery. You want your customers to know that they’ve picked a winner, and your prospects to know you’ll survive – and thrive – in tough times as well as good.
2. Audit Your Brand your company or product brand accurately reflect who you are… and who you want to be? Is what you say you stand for believable – and important to your target audience? Make sure the brand you go forward with is the right one, and put systems in place to maintain its value. A consistent experience, a single “voice” and the way you communicate your brand in other ways is critical. If you are like most companies, your brand is the most valuable intangible asset your company owns. Improve it, and protect it.
3. Reevaluate Your Product and Service Mix: Are there ways you can repackage existing products or services in ways that can provide more value? Or, develop a product or service line that can accommodate smaller clients or customers with reduced budgets? Ask your customers – they’ll be happy to help.
4. Embrace Your Database: Your current database probably houses former customers and prospects, as well as current customers and suppliers. Now’s the time to go after them. Reactivate dormant accounts and leads with new products, promotions and services. Also, contact current customers for referrals. Give them ideas they can use to help their business in the current economy, and they’ll be happy to pass you on to others who could benefit from your knowledge.
5. Measure your Return on Marketing Investment: The problem with many marketing efforts is the inability of management to ascertain what really works, and why. That’s why smart marketers always measure outcomes so they know exactly where to invest for the greatest return. The more you test and measure, the more relevant data you’ll get. And the more data you get – and analyze – the smarter your marketing will get.
6. Cost Controls: Controlling cost does not mean cutting cost. It means being smarter with the budget you do have, and wringing greater value from every dollar you invest in your marketing program. Closely related to Marketing ROI, controlling costs allows you to invest your money where it drives the greatest revenue.
7. Launch a Targeted, Integrated New-Business Campaign: Now is a great time to launch a customer acquisition campaign. Set specific goals, tighten-up cost controls, and strive to sell product and build brand. Target your best customer segments through an integrated campaign across different media (including social and other online tactics) leveraging results-driven direct-marketing and customer engagement strategies.
8. Reevaluate Your Marketing Service Relationships: Are you totally satisfied with your marketing or PR agencies? What about strategic marketing counsel? Do you have a Social Media agency, or an expert on-staff? There are lots of smart practitioners out there, and many may be able to give you greater insight, higher levels of service, and greater value for your investment.
9. Enhance the Customer Experience: Do you provide “bullet proof” customer service? The cost of getting new customers is much higher than getting more business from existing customers. Each customer you lose is taking money out of your pocket over time. By improving customer experience – with a focus you’ll boost awareness, acquisition, loyalty and retention.
10. Increase Customer Insights: The more you know about your customers, the more accurately you can target brand and marketing messages to address their specific needs. To do this, marketing executives need to get down in the trenches. What do your prospects and customers want or need, and why? From voice-of-the-customer research to tracking your brand’s online reputation, it’s easier to gather real-time data – and act on it – than ever before.
Fueled in part by the Internet and other interactive technology channels, as well as the increased fragmentation and segmentation of traditional media, the explosion of brand and marketing touchpoints has increased the complexity of acquiring and retaining customers.
In many instances, this rapidly changing and increasingly hectic landscape can also lead to higher marketing costs, reduced marketing and brand effectiveness, and declining customer loyalty.
Increased customer choice leads to new skills for marketers
For most customers, instant access to choice, market opinion and competitors – combined with increased levels of education, product knowledge, and awareness of competitive options – have significantly increased their service expectations, making the process of cost-effectively delivering products and services even more complex. And as this complexity increases, the time, expense, and skills required of companies selling and servicing increases as well.
In response to this evolving landscape, “marketing” is being re-defined as “the science and art of finding, serving, retaining, and growing profitable customers.”
Brand and customer experience are more important than ever
That’s why brand and customer experience are more involved and more important than ever in fueling acquisition, driving word-of-mouth referrals, and ensuring retention of the right customers. Because yesterday’s marketers must become tomorrow’s customer experts, leveraging a deeper understanding than ever of customer wants, needs, perceptions and options to drive more of the right customers closer to their organizations.
Summary: Spent: Sex, Evolution, and Consumer Behavior revisits the notion of conspicuous consumerism. What is interesting, however, is Miller’s refreshingly academic exploration of the concept of “fitness flaunting” – signaling your own traits and qualities to attract mates, intimidate rivals, etc. From the perspective of a professor of evolutionary psychology, Miller argues that what you are displaying to others is less of a conscious consumerist decision, and more of an evolutionary outcome to ensure survival of the human species.
You’ll love this book if: You are already skeptical of marketers.
Marketers are often portrayed as evil geniuses, but in reality, they’re typically floundering around like everybody else. They try to keep up with the latest consumer psychology fads by reading the shortest available pop-business books by eccentric writers with extremely large or small quantities of hair.
You’ll hate this book if: You are looking for the “shortest available pop-business book” for getting consumers to buy your products.
You might also hate this book if you happen to drive a Hummer, which Miller mentions several times, and classifies (along with peacock tails) as “conspicuous waste”:
A highly visible expenditure of resources that brings no material benefit, but that simply signals the expender’s ability and willingness to waste those resources.
Words of Wisdom:
Thus, most BMW ads are not really aimed so much as potential BMW buyers as they are at potential BMW coveters, to induce respect for the tiny minority that can afford the cars. This explains why BMW sometimes advertises in mass-circulation magazines: it is an inefficient way to reach their target market of potential BMW buyers but it is a very efficient way to reach the BMW coveters who might respect the BMW buyers.
Why we think this book is important: Although often tongue-in-cheek (and unable to fully disguise his own opinions and preferences), Miller nonetheless convincingly makes the case for eschewing the narcissist temptations of modern consumerism for more enlightened ways of communicating who we are to our fellow humans.
While there are still some B2B executives who dismiss social media as an effective tool for engaging key audiences, the truth is that many B2B companies have successfully embraced the interactive world of “Web 2.0”, adapting core tools and technologies to connect with prospects and customers in ways they could only dream of a few short years ago.
In fact, earlier this year Forrester Research reported that B2B buyers have very high social participation; this presentation on Slideshare (“Using Buyer Social Behavior to Boost B2B Social Media Success”) outlines their 4-step approach, as well as Forrester’s Social Technographics ladder, a segmentation slice of online users based on their likelihood to leverage and/or participate in social media in business decision making.
The conclusion is simple: “If you’re a B2B marketer and you’re not using social technologies in your marketing, it means you’re late.”
B2B social media touchpoint examples: Different approaches, common goals.
Social media touchpoints needn’t look like your teenage daughter’s MySpace page. Nor should they – but that doesn’t mean B2B marketers can’t make us laugh.
IBM (Consulting and Products) The now-famous “Art of the Sale Series” shows the fun side of IBM in their videos, a take-off on “The Office.”
Accenture (Consulting)
Global consulting firm Accenture has entered the social media world with several employee-written blogs, including a “Consulting Analyst Video Blog” , along with other tools and channels focused on sectors, clients, prospective employees, and others.
Kelly Services takes a slightly different approach.
Although their client list is comprised of Fortune 500 companies, Kelly has focused social media efforts on improving the “product” (employees) with videos aimed at honing job interview skills by showing humorous videos of interviews going awry. The videos can be found on their website for job seekers called getajobthatdoesntsuck.com.
Now that popular social media tools Facebook and Twitter have been invaded by Baby Boomers, we can safely conclude that these sites are now “mainstream” and “safe” for even the most skeptical B2B marketers.
“Boomers are the mainstream of the country now,” says Rainie. “When you attract a mainstream audience, you’re going to attract a lot more commercial interests. Boomers validate that this is a big market, and that this is a place where commercial interests can make money.”
Bottom Line: If you’re not in, you’re already late.
No matter your industry, if you’re in B2B (or B2C or Non-Profit, or…) and you are not yet leveraging some of these tools, then you’re late. But it’s not too late.
Though wildly successful at connecting people, businesses in general are still feeling their way through the options. Even though most businesses won’t see immediate sales, the ability to drive awareness and influence your audiences is high. From micro-blogging (e.g. Twitter) to You Tube, and Facebook to LinkedIn, the range of touchpoints is broad, and the ability measure influence and activity is high.
Which leaves us with one question: What is your social media strategy?
Summary:World Wide Rave: Creating triggers that get millions of people to spread your ideas and share your stories is an exploration of the new methodology for marketing your products and services. Scott urges us to stop hyping our products and services. He suggests that we harness the viral power of the Web as a platform for creating and sharing content and solutions. Each chapter contains a succinct action item entitled “Your Challenge” – so you can start implementing the ideas right away.
You’ll love this book if: You realize that traditional marketing and advertising methods are increasingly ineffective, and you are ready to lose control, share ideas, and connect with your buyers, colleagues – whoever.
You’ll hate this book if: You are sticking with what worked decades ago: Yellow page ads, direct mail, image advertising, trade shows. You think that because you don’t use social media, your company doesn’t need to, either.
Words of Wisdom:
Think about the last few products you purchased. Did you answer a direct-mail ad? Go to a tradeshow to learn more? Turn to the Yellow Pages? As I mentioned earlier, if you’re like most people, you didn’t do any of those things – you went online. So why are we marketing in the same old ways? If we’re really honest, we must realize that buying access with expensive advertising and communicating exclusively through the media and analysts is not an effective online strategy.
Why we think this book is important: It’s a new world out there for marketers. People no longer respond (favorably) to the same old corporate messages: Authenticity and creativity are the new rules of the game. Are you up to the challenge?
A waiter has taken flak from a table of elderly ladies during a two-hour luncheon. They’ve changed their minds, complained, reshuffled their orders, and made the server’s life miserable. When they finally ask for the check, he delivers it with the question, “Was anything all right?”
While important, few enterprises understand that it’s much more profitable to focus on better serving your best customers (profitable and loyal), while delivering the minimal service level required to serve the rest of your customers, without alienating them. But how can you tell who’s who?
Let’s pop open your database and take a peek at The Good, The Bad, and The Indifferent. In truth, most businesses have a mix of all three.
Your good customers are the ones who buy your product time and again. They tell their friends, family and colleagues about you, acting as spokespeople. You love these customers. If you could, you’d clone them.
Bad customers may buy once, then disappear. They’re often cherry pickers – lured by cheaper rates and bigger incentives, they’re never satisfied. They’re never going to be. They cost more than they’re worth. Let them drift to your competitors, and be thankful.
Indifferent customers may look like bad customers, but are really just good customersin disguise. It’s not their fault if you don’t know what they need. The trick is striating your data in ways that allow you to identify those segments that are profitable, those that are potentially profitable, and those that will never be profitable; and act accordingly.
Successful companies identify and satisfy their ideal customers, doing everything they can to please and retain them. Simply stated, you should target these customers, developing relationships with them, bringing them closer to loyalty – and advocacy.
Example: A telecom operator in South India, struggling with high customer churn, planned to develop a blanket rewards and relationship program with mobile subscribers – but realized that rewarding all subscribers may not be the answer.
Why? The bottom 28% of their subscribers were actually eating up half the profits generated by the others, in operational and servicing costs. Another 12% did not generate any profits. And 30% were only slightly profitable.
By deciding to focus on this top 30%, the operator saved 70% of his marketing budget, and was able to retain 98% of these high end customers in a market that was witnessing over 50% churn.
Bottom Line: It can actually be more profitable to lose bad customers than to gain new ones! The Bad and the Ugly cost more money to service than they generate.
Retaining the right customers is common sense. And one day, it will be common practice.
