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Streamlining investor relations: A playbook for efficiency and impact
The overwhelming daily ‘to-do list’ faced by most IROs is often bottlenecked by resource limitations and the ever-escalating responsibilities and demands on their time. That administrative burden has only become heavier with the increase in market data and insights available at the click of a button – both to IROs and to their stakeholder audience. While management teams expect their IR function to understand market trends and investor profiles more thoroughly, team sizes haven't increased to meet these demands.
This IR Magazine Playbook offers a deep dive into the ways in which IROs can harness cutting-edge technological solutions to offload repetitive administrative tasks as well as put advanced analytics platforms to work to enhance limited individual capabilities.
By streamlining processes and leveraging new technologies, IROs can focus on the more human-centric skills that require empathy, critical thinking, creativity and nuanced decision-making to build investor relationships and spearhead strategic initiatives. The goal: to empower IR professionals to thrive in a rapidly evolving environment and deliver unparalleled value to their organization.
IROs face a host of challenges in their current role, most of which center on a significant number of repetitive tasks, such as scripting for earnings calls or preparing for Q&A sessions. The old-school methodology of data collection and analysis is also fraught with inefficiencies, sometimes making it difficult for IROs to maintain accurate, up-to-date information. The traditional approach can inhibit decision-making and strategic planning, creating bottlenecks that impede progress. What’s more, even existing targeting solutions can rely on these basic methods, often only identifying investors based on peer investors.
IROs have always had to maintain investor confidence, managing reputational risks and ensuring consistent, transparent and timely communication. These challenges are more pronounced now than ever. ESG reporting is also a significant focus for investors, reflecting the demand for corporate transparency and responsibility. IROs are tasked with balancing these comprehensive reporting requirements alongside their other responsibilities – a complex and time-consuming endeavor.
Time pressure and data collectionAside from the above, the demands on IROs’ time in their day-to-day activities are only growing. Recent IR Magazine research shows that in-person meetings are the globally preferred way of engaging with investors, named by 84 percent of respondents, followed closely by roadshows (82 percent), conferences (80 percent) and scheduled calls (80 percent). Though online meetings boomed under the pandemic and have remained part of daily life, this is not the format of corporate access IROs find most productive. Globally, only 52 percent of IROs say that this is their preferred method of engaging investors.
A separate survey conducted by Q4 found that more than 50 percent of IROs would use tools to enhance their impact reporting and progress tracking, if resources were not an issue, with targeting and engaging their investment community both the primary goal and, for 40 percent of respondents, the biggest challenge.
From investor outreach and content creation to event planning and regulatory compliance, demands on IR professionals’ time could be eased with a more efficient management of routine operations.
IROs must consistently monitor shifts in their investor base to maintain effective communication and engagement strategies. This frequent monitoring helps IR professionals understand who is buying or selling their stock, which provides critical insights into investor behavior and market sentiment.
IR Magazine research shows that globally, 44 percent of IROs actively track changes in their investor base on a monthly basis, with 41 percent saying they do so quarterly, 8 percent biannually and 5 percent just once per year. North American respondents are more likely to monitor the investor base monthly (51 percent) than those in Europe (31 percent) or Asia (27 percent) – perhaps reflecting the more intense reporting schedule for US companies. Larger companies are also more likely than smaller ones to carry out more regular analysis of any changes in their shareholdings.
As a result, the frequency with which IROs adjust their targeting strategies can vary, but it is generally an ongoing process. The same IR Magazine research finds that globally, IR teams are unlikely to adjust their strategies on a monthly basis (only 8 percent of respondents do so), with the most popular choices being either on a quarterly basis (31 percent) or yearly (27 percent). Just under one in five respondents (18 percent) does so biannually, while 16 percent do not regularly adjust their targeting plans – perhaps due to having a set strategy anchored by a stable investor base or a long-term strategic focus.
Modern CRM systems enable IROs to efficiently monitor shareholder composition and detect shifts in real time. These systems often include features that allow for detailed analysis of investor activity, which is essential for making informed strategic decisions.
Staying vigilant and adapting strategies as needed will grant IROs time to better manage investor relationships and support their company’s long-term financial health. This proactive approach helps not only in retaining current investors but also in attracting new investor engagements that are likely to align with the company's vision and goals.
Ash Aulds, director of FP&A and investor relations at Murphy USA, a small-cap chain of retail gas stations
The biggest challenge for us is the limited time we have. Each of our shareholders wants to be engaged differently, but none of them explicitly state how they prefer to be engaged. So how do we engage efficiently and effectively? And how do we spend what I call the ‘more expensive’ time with senior management? Are we making sure it's as efficient as possible? The same applies to the IR analysts, ensuring that our work at different levels aligns with our goals and reflects the impact of our program.
In our day-to-day shareholder interactions, we often encounter the intention of people wanting to meet. We have peers in the publicly traded space and we're happy to meet with anyone but many calls turn out to be just a read-through of competitor X. Within 45 seconds, we realize it's not about us but about industry dynamics. We're improving our screening processes, having junior analysts handle these calls – instead of VPs or senior management – to maximize efficiency.
Maintaining preferred contact methods for our large shareholders and understanding their intent is crucial. The prep work, which involves fully arming our executives with prior conversations and understanding the investor lifecycle, takes the most time. Whether it's someone building a thesis or a long-term shareholder, each requires different preparation and conversation strategies.
Understanding our investors personally, building relationships and knowing their backgrounds, investment styles and holdings are vital. We use individual investor profile pages to track this information and update it after each meeting. This helps us have meaningful conversations and strengthen relationships. It also allows us to track our effectiveness in answering investor questions and explaining some of the more complicated parts of our business or industry. If we look back and see an investor is routinely asking for the same details, then we like to actively engage to ensure we have answered its questions effectively.
It’s also critical to track our effectiveness as it relates to shifting prospects into shareholders: we use a platform that lets us see, 45 days after quarter-end, whether people became shareholders through 13F filings. This helps us assess whether we're engaging efficiently and effectively with our shareholders and prospects.
Using technology and tools – and testing new approaches – is crucial. If a new method doesn't work, we simply move on. AI could greatly assist us by summarizing historical notes, identifying key themes and questions from investors and building profiles. This would save us a significant amount of time that we currently spend on preparation.
Maintaining preferred contact methods for our large shareholders and understanding their intent is crucial
If a new method doesn’t work, we simply move on
Jennifer Kozob, senior manager of investor relations at JLL, a mid-cap commercial real estate services company
In terms of using our time efficiently, being in front of investors is the most helpful. It’s crucial to ensure we are engaging with the right people.
We had a recent situation where we noticed, through surveillance, that a firm was starting to take up a sizable position with us. We hadn't met with it initially – it just started buying shares. I saw that it was listening to one of our earnings calls, so we reached out to it. We had some calls with the analyst, then the company brought in its portfolio manager, who spoke with our CEO and CFO. Subsequently, the firm has really grown its holdings with us.
It’s crucial to ensure we are engaging with the right people
We try to be thoughtful about tone when writing scripts, considering word selection and balancing positive and negative terms as much as possible. Computers quickly analyze these scripts as soon as they are released, so it's important to be mindful of our word choices.
I've been using AI to summarize some of our notes. I input my notes into the AI, which helps to summarize and pull out key themes. This approach is also useful for prepping management for investor meetings, as it often takes four or five meetings to get investors to take a position in the company. We use it to summarize analyst notes, too.
The next tasks we would like to automate with AI are scriptwriting and Q&A prep for earnings-related activities. While some tasks related to messaging and strategic outlook should remain human, AI can help with initial drafts of scripts, which we can then refine and personalize.
Our earnings materials, including the earnings release, slide deck and Excel file, are integrated with our webcast for earnings calls. This setup saves time by keeping everything in one place and allowing us to track who listened to our webcast and view the attendees. This integration has been a very time-saving one for us.
We try to be thoughtful about tone when writing scripts, considering word selection and balancing positive and negative terms as much as possible
Transformative advanced tools and technologies can significantly enhance the effectiveness of IRO output by providing deep insights, optimizing online presence, measuring event success and streamlining routine tasks.
Behavioral analytics: AI-powered platforms that track investor behavior across digital channels, providing insights into investor interest, sentiment and engagement.
Website analytics: Tools that offer valuable data on website traffic, content consumption and user engagement, helping IROs optimize their online presence.
Event analytics: Platforms that track investor event metrics, allowing for the measurement and improvement of event effectiveness.
Automation: Tools that streamline routine tasks like email marketing, content distribution and data analysis, freeing up IROs to focus on strategic initiatives.
Streamlining routine IR tasksThe routine IR tasks that AI can streamline include automated email marketing and content distribution, AI-powered email personalization, automated email scheduling and targeted content distribution.
AI-driven email marketing and content distributionUsing AI to help complete administrative tasks can save significant time, which can then be applied to more valuable strategic efforts. By using automation and software tools, IR can better identify and prioritize investor relationships and understand their motivations.
Message personalization: Tailor email content to individual investor interests.
Email scheduling: Send emails at optimal times based on time zones and activity patterns.
Content distribution: Target specific investor segments with relevant content.
Data analysis and reportingIROs also use advanced data analysis and reporting capabilities, such as automated data collection, analysis and report generation to enhance efficiency and effectiveness. Advanced data analytics and AI can improve investor targeting by analyzing behavior patterns and predicting actions, making the process more precise. Existing targeting solutions are basic, often only identifying investors based on peer investments, which AI can significantly improve.
Data collection: Gather data from various sources without manual entry.
Data analysis: Identify trends and insights from large datasets.
Report generation: Efficiently summarize peer transcripts and research reports, offering deeper insights into industry trends and analyst perspectives.
Investor targeting, engagement and relationship managementTools for investor engagement and relationship management include automated investor identification and targeting, meeting scheduling and automated follow-up and communication – all designed to enhance efficiency and maintain strong investor relationships.
Investor identification and targeting: Source new investor engagements based on specific criteria.
AI-enabled scheduling: Arrange meetings according to specific investor preferences.
Follow-up and communication: Manage follow-up emails and reminders automatically.
Content creation and managementAdvanced content creation and management tools include AI-powered content creation for generating summaries of financial reports and news articles, automated content translation into multiple languages and automated content optimization to enhance website content for readability, SEO and user engagement.
Content creation: Generate summaries of earnings releases, financial reports and news articles.
Automatic translation: Render materials into multiple languages at the click of a button, though oversight is required.
Content optimization tools: Enhance website content for readability, SEO and user engagement.
Finding the right fitWith the excess of AI and other tech platforms available today, achieving a good fit with the proper service is vital. Selecting the right platform can significantly enhance the efficiency and effectiveness of your IR efforts, while a poor fit can lead to wasted resources and missed opportunities.
Crucially, effective integration across multiple tools used in earnings, targeting, outreach and communication can significantly improve IR efficiency. Consolidating your current tech stack – housing all these solutions in as few platforms or providers as possible – can amplify the efficiencies many times over. Here are some other aspects worth considering to ensure that a chosen platform aligns with a team’s specific needs and goals.
Define needs and goals: Identify key challenges and objectives and prioritize needs based on potential impact. Clear goals facilitate the selection of appropriate technological solutions.
Research and evaluate available tools: Consider features, functionality, user-friendliness, budget and integration capabilities with existing proprietary software. Thorough evaluation ensures alignment with the specific needs of the investor relations program.
Pilot and test: Start with a pilot program to measure results and gather feedback, allowing for adjustments before launching full-scale implementation.
Select and implement: Choose the tool that best meets your needs and develop a deployment plan. Proper implementation is absolutely crucial for maximizing the benefits of any new technology.
Continuously evaluate and optimize: Monitor performance and seek continuous improvement. Ongoing evaluation ensures that tools remain effective and aligned with evolving IR goals.
Consolidate the tech stack: Streamline your technology partners into as few disparate providers as possible. Simplifying your technology infrastructure will add even more to your department’s – and organization’s – efficiency.
Embracing technology and AI is an essential component for driving efficiency and impact. This playbook highlights solutions that can transform IR practices.
Access to accurate data and reporting metrics: Leveraging advanced analytics platforms for real-time insights into investor behavior and program performance is crucial for making informed decisions and staying competitive.
The benefits of automation: Automating routine tasks not only saves time but also enhances decision-making through data-driven insights, allowing IROs to focus on strategic initiatives.
Active tracking and adjusting of targeting strategies: Continuous monitoring and frequent adjustments of targeting strategies will ensure alignment with strategic goals and effective investor engagement.
Engagement with capital markets: Adapting to the digital shift and putting engagement analytics to use helps IROs tailor their communication efforts, increasing the effectiveness of their outreach.
Measuring ROI and business impact: Regular evaluation of tech tools using both quantitative and qualitative metrics ensures these technologies deliver the expected return on investment and support long-term business objectives.
By integrating these strategies, IR professionals can streamline their operations, enhance investor relationships – and ultimately deliver greater value to their organization.
