This is an article “Turning Bad Investment Relations Around” by Marc Primo
With the cloud of an impending recession hovering all around the world due to the COVID-19 pandemic, it’s easy to assume that investor relationships will turn huge shifts and cause major adjustments to businesses everywhere. The first entrepreneurial quarter of the year has experienced an unprecedented phenomenon never before seen in decades, with significant imbalances in global supply and demand almost evident all around.
Every business situation is unique, but what remains important is how you can maintain good investor relations amidst a crisis. By way of transparent communications regarding how you would deal with challenges and convey solutions in a timely manner, you can ease your investors’ fears early. It is a given that they will want to know your plans in handling everything or if they can trust you to manage their expectations accordingly.
To give you a hand on what next steps you should work on, here are some useful insights you should consider.
Monitoring and communication is critical
Keeping tab and tracking the mitigating measures that other companies are taking (especially that of your competition) is vital in how you’d want to set up a communication plan for your investors.
Address the health and economic crisis or how it can impede your operations while assuring them that regular monitoring and practical solutions are being undertaken, with every step going in the right direction.
Also, provide regular announcements on financial reports and follow-up on their concerns to make sure they won’t feel left out.
Be transparent with your plans
Your plan should focus on withdrawing or adjusting your current quarter and annual guidance since a current global economic crisis is happening. Present your liquidity and should you opt for credit lines, make it known to your investors so you can justify your move.
It’s a fact that most industries are already affected by the crisis, so you may also want to suspend your share buyback programs or dividends for now. Again, let your investors know accordingly in doing so.
Expect more companies to go public
Given the current situation, you can expect more companies to take the public listing route in order to gain more operational power.
Should you choose to go public, focus your advertising and marketing content in a way that can reassure both your consumers and investors of your sound management.
Comply with the Regulation Fair Disclosure standards and send the message out there via press releases, public financial information, and filings. This way, your investors can assume that you are a trustworthy company that they can rely on.
Going virtual is good but voice-calls are still preferred
Sharing a more personal way to interact with your investors is the best way to keep them on your list. However, due to the current pandemic, the rise of non-deal roadshows and online shareholder meetings have been the go-to alternative for most companies nowadays and probably even after the crisis. This is good but you may want to maintain dropping a few one-on-one voice calls rather than going on video messaging apps because of how this has long been accepted as a traditional business approach.
Few investors would want to re-adjust their way of business and keeping that semblance of normalcy can help you ease their fears about current and ‘up in the air’ dealings.
Remember that most of us are experiencing difficult times and keeping your investors’ benefits in mind can save relationships in what could seem like a long and downward spiraling economy.
Treat your investors as the professionals they are and don’t hesitate to discuss both their and your concerns regarding the current COVID-19 crisis. Offer them help when they need it and ask for it if you need it as well. This crisis may blow out one of your knees in terms of business, but it can also be the best opportunity that can make better companies and individuals out of us all.