Effective Investor Relations: 5 Steps for Developing a Powerful IR Strategy

Next to doing the right thing, the most important thing is to let people know you are doing the right thing.” J.D. Rockefeller

The development of an IR strategy is a complex undertaking. It starts with the analysis, then deals with IR visions and potentials, defines the goals and significance of the goals, determines the IR instruments, their time horizons, and budgeting. An IR strategy should be a competitive differentiator that leads to a higher valuation. A well-defined strategy coupled with a strong IR team has the ability to turn plans into execution and eventually into successful two-way communication with investors. With the ever-changing market scenarios and investor preferences, it has become essential to reach out to investors in the right way at the right time. IR planning is thus the core of investor relations.

A thoughtful investor relations strategy is vital for any company aiming for growth and success. The right strategy can help raise the company’s profile, tell the story and enhance credibility with CMA.

Steps for Developing a Powerful IR Strategy

Gather data. Look into your last year’s IR activities and segregate what worked well and what did not. The activities that worked should be included in the new year’s IR strategy too. Begin with assessing the current position of your company through SWOT analysis. 

Start by clarifying your goals. Once you are aware of your current position, set goals for your IR plan for the year before. When it comes to specifying objectives. Without clear goals, you can end up confused about what you want to achieve, and you may well be putting yourself on the path to stagnation. 

Decide on a budget. Your goals will give you a rough estimate of the funds required to carry them out. Before breaking your goals into activities, decide on an optimum budget for your company. A detailed budget should include all the essential elements like tools, vendors, venue estimates, professionals’ fees, etc. How much and where to spend will depend on your goals and objectives.

Plot on the calendar. Until you do not put your plans in a calendar, they are mere talk. Look at your goals and your budget furthermore work out a strategic approach to investor relations. Start with monthly themes, writing down what kind of activity you will do in a particular month. You should aim for one or two central ideas per month and plan for smaller, day-to-day activities that complement the theme. Make sure your entire team is well-versed with the plan.

Decide on KPIs. While planning a calendar, it is crucial to decide on the success indicators of the scheduled activities. With each event that you choose to carry out, decide on qualitative and quantitative success indicators. When you perform the activity, these indicators will help you to gauge the effectiveness of that event and help you with your consecutive plan.

While developing a strong investor relations strategy it is important to take into account the following aspects:

  • To be flexible;
  • To diversify activities;
  • To perform a peer analysis;
  • To conduct informal surveys.

The Importance of Developing a Powerful IR Strategy 

Having an IR strategy that supports the company’s long-term objectives is a must-have for any listed company. A powerful IR strategy is critical to raise your profile and increase your company’s valuation.

Here are 5 things for mapping out a successful IR strategy:

  1. Identify goals and plan activities. Broadened visibility might require a focus on increased conference presence and specific shareholder targeting activities. Identifying these objectives before you plan investor activities will ensure that you are enlisting in activities that lead to successful outcomes.
  2. Reflect on the previous year. Make a list of conference invitations (noting which were accepted or declined), non-deal roadshows, bus tours, and analyst participation at trade shows or medical meetings from the prior year.
  3. Plan ahead. Create a compelling calendar that includes key corporate events such as board meetings, national sales meetings, and other off-sites. We can build out your IR calendar by covering analysts’ investment bank conferences and industry events that we know you will be attending.
  4. Leverage opportunities. Maximize management’s travel when possible. In your business, you have lots of opportunities to leverage to grow. Leverage enables you to create a more significant outcome with the individual inputs.
  5. Diversify activities. There are many types of investor activities to consider. Adding site visits and bus tours to your investor schedule is a great way to ramp up activity with minimal time investment.

investor relations officer analyzing data

Final Thoughts

One of the hallmarks of a great IRO is the ability to spin a company’s strategy into a compelling story. While investor relations professionals devote plenty of time to explaining their companies’ strategies, less time is typically spent on defining strategy for the function itself. Best practices for an effective IR strategy are driven by the perspective and demands of the buy-side. Developing a shareholder engagement strategy that supports your valuations objectives will help your company to implement the right Investor Relations plan to support your long-term strategy

At Sager IR, experience gives us the qualitative insight to design and execute such strategies. Our dedicated team comprises senior-level consultants with extensive equity markets, public companies, corporate communications, and IR experience. As a result, we bring industry-leading research and deep best practice knowledge to create and support world-class investor relations programs.  Sager IR professional team can help you get an IR strategy that supports your long-term objectives. We collaborate with you to develop your IR visions and uncover the potential.

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