The Hidden Power of Investor Relations

Tuesday, 4th May 2021 09:23 - by Moosh

The foundation of any business should be its core customer base. In my previous life as a locum retail pharmacist, this meant homing in on a limited number of clients from which I secured repeat business from. This meant that 95%+ of my turnover was secured. The alternative would have been to join an agency for one off bookings all over the place and waiting for the phone to ring. This latter option didn’t seem viable for me as I didn’t have a car and with regular bills to pay, securing my future business meant I had no worries about paying those bills.

Pharmacies secure their business by encouraging patients to sign up to a prescription collection service which guarantees footfall into their stores, if only to pick up dispensed medicines. Supermarkets have loyalty cards which serve the same purpose in securing footfall to support core revenue generation.

What does this have to do with listed companies on a stock market?

The parallels are there if you think about it. If we assume companies should be targeting both long-term lump sum holders and long-term regular buyers then it’s these two types of investor who are going to support their business long-term, especially with respect to placings and price appreciation.

Truly understanding this means that a company’s investor relations should be proactive with investors. Too many times I have contacted the investor relations for various companies and have been met with silence.

If I ran the investor relations of a company, and knowing that the role is the vital bridge which connects a company to its core target long-term customer base, then I would do my best to not only at least reply to anyone who has bothered to take time and possibly money to invest in the company, but also make a note of the proportion of those who can be tallied under secured customers, that is, long-term holders.

This is the minimum that every investor relations needs to be doing otherwise they are not fit for purpose and why would you waste your time and money in a company who can’t even communicate effectively?

Frankly, a lot of companies need to start treating investors with more respect instead of remembering their existence only when they come with a begging bowl asking for more money to keep them afloat. We’re not stupid and we deserve better.

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.