TomAllinder.com

Remember the days not so long ago when Investor Relations was a relatively simple business? IR firms could charge as much as the market would bear and then some; do a pretty good job and everyone was happy or at least, somewhat happy. It was just the way things were and no one was in any sort of hurry to change it.

Times have changed considerably over the last year or so and publicly traded companies, especially microcaps are not loaded with cash to spend on investor relations or anything else for that matter. IR and PR companies cannot charge exorbitant fees for services that no longer are viable or are outdated. Everyone is getting a little bit smarter all the time and can see that we need to work harder and smarter to get results.

I got the idea for this blog through a phone call this morning. A good friend and partner of mine, Jeff Ramson and I were on the phone with a prospective client. Jeff said early in the conversation, “The only thing that works is if all of us roll up our sleeves and work hard; there is no easy money anymore.” I thought his statement was obvious but still, it made an impression on me; enough to write a page about it anyhow.

What Makes the Difference?

Relationship and Communications

Client relationship management is more important than ever. Open and frequent communications that are initiated by the service provider (the IR firm) is the cornerstone of a successful relationship and program. One good way for a publicly traded management team to become disenchanted with their IR firm is for the IR firm to stop communicating or “disappear” as soon as they have been paid their fee. Good communications that are frequently initiated by the IR firm goes a long way in building the relationship. If the company management team has to make most of the calls to the IR firm, it is a relationship that is in trouble and will not last.

Teamwork

When I speak of teamwork, usually I am talking about fostering a teamwork environment between the management of publicly traded companies and their shareholders. In this instance however, what I am talking about is teamwork between the client company and its IR firm. In today’s Web 2.0 world, participation on both sides is a requirement. Company management participate is at least 50% of the effort. While the management team’s time commitment is small compared to the IR team’s effort, it is a 50-50 split; in other words, the IR team cannot produce all of the content that is used in marketing.

Planning

It is important for the management of client companies and their IR firm to co-author a plan. The plan must be adhered to and worked over a period of time. All too often, one side or the other loses patience and starts trying to move ahead in order to produce quicker results in the marketplace. This goes back to communications; everyone must be playing from the same sheet of music. A good IR plan worked over time and is focused on the company, its products, services and developments will eventually gain traction in the marketplace with investors. This may be counter-intuitive but, by taking care of the marketing plan for the company and its management team is the best way to gain new shareholders. Many publicly traded companies do it the opposite way: They hire an entity to run an “instant gratification” program and end up poorer and right back where they started from (or worse).

A good Web/IR 2.0 program requires careful planning, communication and persistence to work. However, it will pay much greater dividends longer term when everyone is working for the same objective and everyone knows and fully understands their part in the process…

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