A critical component of successful investor relations programs is a company’s ability to adequately invest time and resources in the IR function. A common trend in IR programs is to measure the effectiveness of your initiatives by engagement and activity levels – and both require a significant amount of time from a usually under-resourced team.
As time is an inevitable cost of any activity, focusing on decreasing administrative tasks allows IROs and executives to reinvest their time into activities that produce greater outputs, such as nurturing strategic investor and shareholder relationships and driving shareholder value.
The cost of wasted timeIn a recent study, Irwin discovered that C-level executives spend up to 25 percent of their time on investor relations-related tasks, but 33 percent rarely feel prepared for investor meetings and events. In a buy-side investor survey, Irwin found 89.5 percent do not think issuers perform enough due diligence in understanding who they are or what they’re looking for before meeting with them.
This suggests that time spent on relationship management should be more strategic to improve relationship outcomes. For this to be possible, modern IROs must spend less time on menial tasks like digging through multiple tools to find insights, managing data and manually compiling itineraries for events and roadshows.
IROs have a broad spectrum of responsibilities and tasks. One way to increase efficiency is to decrease time-consuming activities that can be automated or accelerated using technology.
Efficient investor targetingOne of the biggest challenges IR professionals face is getting in front of new investors to share a company story that’s compelling and relevant.
Effective outreach takes time, especially when searching for investors and vetting them yourself. Your investor-targeting software should be able to save you time and effort in the search and vetting process by accessing strategic and relevant investor prospects quickly.
For example, targeting criteria such as geography, peer holdings and average investment size can help you pre-qualify investors before you spend any time on outreach. This prep work will help ensure that any meetings you book are with investors that are a good fit for your business. It’s also imperative that your targeting solution looks beyond the usual targets. Leveraging technology to find more opaque investors that may benefit from investing in your company can help you build long-term holders.
If your targeting software makes your investor targeting more efficient, you will be able to measure these results with quantitative metrics such as an increase in new shareholders in a given period and the value of their investments.
Time savings for executivesPreparing executives for meetings can make for more productive conversations with investors. Most buy-side investors feel issuers often lack due diligence, so it’s vital to ensure your executive team knows who it’s meeting with, what that investor cares about and what its current holdings look like.
Having the right investor relations software in place should save countless hours for your executive team members by bringing context to conversations and decreasing the time they spend on IR-related tasks and activities.
Having a central source of truth makes it easier to prioritize strategic relationships and compile the necessary information for presentations and reports. Instead of relying on advisers or searching various documents and tools for data, your IR software should be able to deliver critical insights and reports instantly, saving you time and effort.
Additionally, an IR CRM that integrates with your email and calendar can help executives delegate specific conversations and tasks to IROs. Not every investor inquiry needs to be handled by the CEO or CFO and, often enough, their time is better spent on more critical company activities. Every email your IR software redirects from executives to IROs represents time savings and can swiftly add up to several hours saved each month.
Time savings via business continuityIn relationship-driven fields, employee turnover and lack of continuity can be significant setbacks.
Restarting your investor relationships from scratch is time-consuming, can appear unprofessional and may erode the trust investors place in your business. While it’s impossible to avoid personnel turnover altogether, it is possible to maintain relationship continuity using CRM software effectively.
Your IR software can save you months of catching up and relationship-building by providing context on previous discussions, meetings and outcomes with a particular contact. A robust contact log with detailed profiles and history can help IR professionals remain relevant and up to date, even during periods of change.
This can also give you an advantage in lowering your cost of capital, given that it is often easier to raise capital from existing or previous investors than from a new investor.
How to become a more strategic adviserIt’s better for company outcomes when IR teams can hold a more strategic seat at the table. For this to be possible, especially on under-resourced teams, IROs must spend their time on strategic activities instead of administrative necessities.
Irwin’s State of Investor Relations in 2023 report uncovered that IROs use, on average, between two and five tools to run their investor relations program. Efficiency is lost when time is spent searching through various datasets, manually updating activity records and spending hours each quarter trying to decipher the most important insights. Streamlining your workflow with fewer tools and quicker access to critical insights can help make time for more strategic work.
ConclusionThere are many different strategies IR teams can use to generate business value through investor relations, but only a finite amount of time.
Using technology to automate or accelerate manual tasks leaves IROs and executives with more time to spend on critical non-scalable activities such as relationship building, honing your company story and meeting preparation.
