Increased responsibilities on tighter budgets require smarter, more efficient IR management.
Last year, a survey of the heads of IR of the FTSE revealed what most Investor Relations professionals probably already know: across the board, budgets are tightening. According to the survey, 25% of IR teams were facing budget reductions — at a time when the majority of teams are made up of only one or two people, reports Bloomberg. Cuts to both budgets and personnel mean that the modern IRO must be savvier and more efficient than ever before.
For Vice President of Investor Relations at Genworth Canada Jonathan Pinto, that means determining “what’s absolutely required versus what constitutes a nice-to-have.”
“There isn’t an unlimited, bottomless budget for any group at any corporation nowadays,” continued Pinto, “and IR is definitely seen as a cost center, so a big part of it is really prioritizing these costs.” Here’s how to cut those costs, and do more with less:
Redistribute Responsibility
Because IR teams are shrinking alongside budgets, the remaining members must take on new roles and responsibilities — whether this means additional administrative work or tackling event management.
Smaller budgets may also require you to rethink your team’s relationship with the sell side. Letting an external corporate access team plan and host a roadshow, for example, means they will shoulder the responsibility of coordinating detailed schedules. According to Michael Sullivan, VP of Investor Relations at Applied Materials, attitudes at these roadshows are changing. “There was a time when sell-side analysts frowned on hosting IR-only roadshows,” he said, “but…they find IR people today are conversant across the company and can handle all the issues that come up.”
Mobile Communication
Of course, attending roadshows and personal meetings with target shareholders requires its own significant travel budget. Why not dramatically limit those expenses by reducing trips or cutting them out entirely, replacing them with digital communication tools? Since the majority of people in the developed world (and certainly those concerned with investing) have internet access, remaining connected with investors — no matter where they are — has never been easier.
Even simply maintaining an active social media presence means you’re engaging your stakeholders on an increasingly influential platform: 80% of institutional investors have integrated social media into their workflow, and 30% report that information gathered through these platforms has had an impact on their investment decision making.
Leverage Technology
Still, as critical as social media is to investor relations, the majority of investors and analysts prefer mobile apps. Considering that smartphone penetration in North America is already over 75%, this may come as no surprise. And the fact that 57% of American adults use smartphones for tasks like online banking means that mobile apps provide an unprecedented and cost-saving communication tool for IROs, both for shareholders and among team members.
Importantly, 85% of all consumers prefer apps over mobile websites because they are easier to use with faster load times. And for investor relations professionals, push notification features allow you to immediately update every shareholder and other stakeholders simultaneously. This means IROs can cut travel budgets and save their clients’ — and their own — ever-more valuable time. As Jonathan Pinto might say, leveraging mobile technology is “absolutely required” to remain competitive in this time of slimming IR budgets.