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Archives for June 2013

The Five Pillars of Investor Relations

pillarsA little less than a year ago, I began writing about the intersection of academic theory and the everyday practice of investor relations.  In this post I will pause in my examination of specific disciplines and try to give an overview of why I’ve chosen five specific key disciplines.

When you are an academic, if you really want to make it big, you need to come up with a snappy way to sum up your thinking on your area of expertise.

For example, in strategy, Porter has his Five Forces  – supplier power, buyer power, competitive rivalry, the threat of substitution and the threat of new entry. Similarly, in marketing, Kotler has the four Ps: product, price, promotion and place. So it occurred to me that investor relations should have a way to neatly encapsulate what it does. Seeing this as a hole in the literature on investor relations, I have decided to step into the void and propose (with apologies to T. E. Laurence and the Seven Pillars of Wisdom), the Five Pillars of Investor Relations.

I choose the wording of pillars because they are the skills needed to form a strong support base for an investor relations program (also, I couldn’t come up with a clever acronym or make everything begin with the same letter).  Plus, this allowed me to create a clever visual slide for my class featuring Greek columns to drive the point home. So, without further ado, here is a brief description of what I consider to be the essential skill and knowledge requirements to do investor relations well—the five pillars of investor relations.

  • FINANCE – It is essential that a good investor relations officer have a thorough understanding of the components of his company’s income statement, balance sheet and cash flow statement, as well as the accounting treatments they derive from. On the theoretical side, the IRO needs to be comfortable with the different valuation models used by Wall Street to value his company’s stock and the role of investor relations in the efficient markets.
  • MARKETING – How to segment the investment universe, target appropriate investors and position the company story to appeal to those investors are basic marketing skills that are critical to good IR. At a deeper level, using marketing techniques to more efficiently use limited resources to focus on the most important investors can help IR have a bigger impact.
  • COMMUNICATIONS – Crafting a memorable message that resonates with investors is a critical communications skill that is used in IR. This is closely followed by figuring out what disclosures, above and beyond those mandated by regulations, will assist investors in understanding the intrinsic worth of a company. All of this presupposes a solid understanding of your company and industry. Finally, the skilled use of multiple communications channels is becoming ever more important as new means of communication such as social media proliferate.
  • LAW – Everything in investor relations is circumscribed by laws, regulations and case decisions. While this will vary by jurisdiction, generally legal requirements will cover everything from what you say (or at least the minimum of what you must say) through periodic reporting requirements and other mandated disclosures, to when and to whom you say it and, to why you say it. Understanding the ins and outs of the legal requirements is critical to doing things right in investor relations.
  • CAPITAL MARKETS – Knowledge of how the stock markets work is an essential skill of the investor relations officer. If you don’t think so, try telling your CEO that you don’t really understand what the markets are doing the next time he sticks his head into your office and asks why the stock is trading down. Understanding liquidity, volatility, auction markets and the other things that impact the way your stock is traded is essential for investor relations. Knowing the key players in the market for your stock, how they may interact and how to access information about them quickly are necessary tools for an IR department.

Well, there you have it: The Five Pillars of Investor Relations. With luck it will give you a framework to think about investor relations in its entirety.

Five pillars slide

How To Execute Excellent Customer Service Via Social Media

customer-serviceMany people make the mistake of believing that social media is simply a sales or marketing tool. In fact it is one of the most rounded tools any business can use, aiding in areas such as market research, business development, and most importantly, customer service.

Customer service plays a large role in the customer experience, and displaying good customer service can go a long way towards gaining loyal and returning customers. Social media has become the preferred method of many when it comes to resolving product or service disputes, as the consumer is offered a level playing field on which to contact a company representative quickly and directly, without the need for lengthy periods on hold while a call is passed from department to department and without needing to wait the typical 24-48 hours handling time for an email enquiry.

But what can a company gain from having all their customer service issues viewed publicly by potential leads and loyal customers on their social media channels? If executed correctly, you as a company can display your excellent customer service and dispute resolution skills publicly, something many customers value highly in a company as mentioned before. But what constitutes excellent customer service on social media?

Fast Response Is Essential

tesco customer serviceOne of the keys to demonstrating excellent customer service skills in a fast paced environment such as social media is speed. Responding to a Tweet, comment, wall post or direct message as quickly as possible is essential. If you can’t find an answer to their query within an hour of them posting it, a courtesy reply or comment to say you are on the case and will be back in touch ASAP goes a long way.

Tesco are a great example of always posting prompt and detailed replies to customer service issues and even general feedback on Tesco services.

Do What Needs To Be Done, Not What The Script Says

zappos customer serviceToo many customer service teams, especially in call centres, are told to stick to a strict script when it comes to solving customer issues.

But everyone is different, and although the issues they have faced may seem common enough to fit into a box or category, their own personal reaction to the situation and how the issue has affected their life and loyalty to your company can vary with every individual case. Therefore your staff should be trained to have the freedom to do what they feel is necessary (within reason of course) to keep this customer happy.

One customer may feel a refund is enough, or may even accept an apology, whereas another may feel that ‘sorry’ just doesn’t cut it, and want some compensation.

American retail website Zappos.com are known for their generous and thought out customer service, often saying sorry and offering $50 vouchers for mistakes on their part, and in this particular example going the extra mile when the customer says it’s not enough.

Ask People To Tell You Their Issues, And Offer To Help

xbox customer serviceDon’t just wait for the issues to come to you, because often people will brood in silence or post about your company without you knowing it. I see plenty of posts every day saying ‘O2 signal down again! Argh!’ or ‘Why has my Amazon order not arrived yet it was due 2 days ago?!! Not happy!’. Those are just a couple of examples from my Facebook friends in the last hour, so imagine that appearing on 600 other Facebook feeds, not to mention if they post on Twitter and what about the people who like/comment/reply to the post/tweet? Then their friends of friends will see it, and before you know it Amazon and O2 could have lost 100 potential customers without knowing it!

So starting the conversation and offering people the opportunity to come forward with their problems is a good way to encourage people who may not usually think to speak directly to the company to let you know what’s wrong. It allows you to get feedback on your products/services and gives your unhappy customers an invitation to voice concerns, big or small.

Microsoft’s @XboxSupport Twitter account are well known for this. To the right is a prime example of good customer service in practice on Twitter.

There are plenty more ways you can make the most of social media as a customer service tool; do you have any to share? Tweet me @NatJWilson!

85% of B2B Buyers Say Online Content Affects Purchase Decisions

web browserA new study by the Chief Marketing Officer (CMO) Council, the CMO Council’s ROI Center, and NetLine found that 85% of business-to-business (B2B) buyers are either majorly or moderately affected by online content from B2B marketers when making vendor selection and purchase decisions. However, B2B buyers don’t believe that B2B marketers are creating online content that offers enough value or is trustworthy. Content published by industry groups and professional organizations is considered to be both more valuable and more trustworthy.

According to the report, B2B marketers invest $16.6 billion in digital content publishing each year to acquire leads and drive sales, and they invest 25% of their annual marketing budgets on content marketing activities. However, most companies don’t have the necessary strategies or teams in place to create the type of content B2B buyers want, and even fewer have the ability to track the performance of their content marketing efforts.

The “Better Lead Yield in the Content Marketing Field” report was based on an online survey of more than 400 B2B buyers around the world working in a variety of industries. Key survey findings included the following:

  • 28% of respondents share content with more than 100 colleagues. Another 31% share content with 25 to 100 people. That means 59% of respondents share content with 25 people or more.
  • 67% of respondents say that research and white papers from professional organizations is the most trustworthy source of content while just 9% rated vendor white papers as the most trustworthy source.
  • In general, 50% believe that papers from industry organizations are highly valued and trustworthy. 48% believe that customer case studies are valued and trustworthy. 44% believe that analyst reports are valued and trustworthy, and 41% believe that independent product reviews are valued and trustworthy.

The CMO Council concludes that too much B2B content is overly promotional or overly technical. It doesn’t help B2B buyers as they’re trying to make buying decisions. A recommendation is for B2B marketers to form partnerships with organizations and content publishers who B2B buyers already trust. Of course, this is the first step in any social media marketing strategy — find your best audience where they already spend time online and connect with them there to begin building relationships with them.

Today, most B2B marketers are very reactionary in their content marketing efforts, and the results of the CMO Council report highlight the need for marketers to develop strategies first and ensure content is part of a larger, fully-integrated marketing plan.

You can download the full report by following the link earlier in this article.

Image: Bill Oddie

Using Social Media to Build Online Communities

online-communities
Social media allows businesses to take their products and services to the next level by actively harnessing the power of the crowd. More typically this involves turning users into unknowing promoters, but it can also be an excellent way to target strategic business partners. Incentivized campaigns on major social media outlets such as Facebook, Twitter, and Google Plus give regular users a sense of ownership and involvement in the company and its products, but there are also emerging technologies which allow businesses to source advice and skills from the crowd.

Let’s talk about some of the ways social media can help attract the best and brightest to help you create the best possible product for your customers.

Crowdsourcing

‘Crowdsourcing’ is, in essence, using savvy members of your social sphere to help shape a product through design input and productive feedback. Think of it as holding a brainstorming session with an unlimited number of planners.

When seeking strategic partnerships in developing your new product, the online community contains countless individuals you might like to use as ‘co-creators’ – (user-groups as a secondary but still important aspect). Desirable co-creators are industry pros who can bring something to your table. Since parallel evolution or conception is a common situation in business today, being able to harness the input of your peers means that you can work together for a greater product.

  • Branch.com is a good example of crowdsourcing on social media. A user expresses an idea, suggestion, or concept to a circle of industry experts using the Twitter interface. One popular conversation was the ‘save symbol’ discussion, started by design technologist P.J. Onori. This discussion swelled to include over twenty people and deconstructed the functionality and design of the existing save symbol. Because of its crowd nature, every person in the discussion became a co-creator for the “concept” save symbol in progress.
  • Chaordix.com is another crowdsourcing platform that breaks its sourcing communities into ever-increasing, broader circles. At the top and hence the smallest are business leaders and producers. In the middle are brand and idea groups, which discuss ways to make the products and services better and get the message out to the maximum number of potential customers. At the bottom, but still hugely important are the user-groups, or the potential customer/regular Internet user. Using a combination of analytic and CMS tools coupled with user incentives and feedback, Chaordix creates strategic dialogues between the top management levels and the consumer to permit more people to take a hands-on approach in shaping new products and services for public consumption.
  • Rounding out this list is Sparked.com, whose integrated rewards system creates passionate “brand evangelists” and co-creators. Its Customer Advisory Board consists of everyday users who are willing to discuss their opinions concerning products and services to analyze the best and worst of any business. Sparked.com also touts its employee empowerment features, which allow employees from all levels of a company to take on co-creator and strategic partnership roles within the company as related to given products.

The common factor in these services is the ability to give the consumer greater ownership and a more direct role in shaping the products and services they use, as well as the businesses they buy them from. The other advantage of crowdsourced intelligence is that for a fraction of the cost of a traditional digital advertising campaign, the crowd can feel involved and consequently more excited about a product. Natural, this will lead to greater social sharing and more traffic and eventually a higher conversion rate. Creating a buzz at the source means that users hear about the product from their friends, family, and their online community—in short, people they trust.

One of the most prominent brands built entirely from a crowd-sourcing perspective is Threadless, a service which encourages artists to design artwork that will eventually be used for t-shirts and other products. The best designs are decided by user-vote, ensuring that the entire process is completely sourced from the crowd. It’s a great way to make partners of both designers and t-shirt fans.

Crowdsourcing is also an excellent way to encourage co-creation and strategic partners through crowdfunding, such as through Kickstarter. By encouraging small investors in new projects, the company’s R&D budget is not tapped as heavily and the investors see a real return on their investment in the form of something new that they helped create, either through conceptual input, cash infusion, or both.

Treating User-Groups as Partners

Clever brands are starting to realize the power of the crowd as a marketing tool. By treating your users as marketing partners, you can create communities which perpetuate your message simply because they enjoy doing it.

  • RadioShack found a way to harness the power of Twitter with its #kindofabigdeal hashtag campaign. The premise was simple: A number of Verizon cell phones were arrayed on a table. As users Tweeted the hashtag, the phones would vibrate. The phones were ultimately awarded to the last person who made each one vibrate. In addition to promoting the RadioShack/Verizon pairing, it also generated a huge amount of online talk, netting over 80,000 mentions on this hashtag alone. Unwittingly, every contestant had become a promoter. By creating an online community, RadioShack had used the crowd as a strategic partner.
  • Google+ has not been absent from this arena, either. Its powerful community based on ‘Circles’ allows people with common interests to connect and share. Notwithstanding the fact that this could be used to create groups of project collaborators (see above), being allowed into someone’s social circle is a huge endorsement of trust. Inspiring people to share your content is then much easier, and can have a lot more impact.
  • Facebook’s ubiquitous ‘like’ button allows users to show preference for companies, entertainers, authors, or products. Kohl’s department store took advantage of this in 2011, creating a Facebook campaign that allowed users to vote for twenty different schools who would each receive $500,000 in donated funds. This $10,000,000 fundraising initiative had the advantage of allowing users to do something altruistic and simultaneously give themselves access to special savings and coupons available only through Kohl’s’ Facebook page. People love to be part of a cause, so harnessing the power of an altruistic community was hugely beneficial in this campaign.

Ultimately, getting the public engaged in your company as co-creators and long-term strategic partners is becoming the best way to ensure profitability and stability. Using social media as a crowdsourcing method allows you to easily draw in discussion, design input, and brand advice from all strata of the business-oriented internet. Your company can polish its image, give customers what they really want and need, and do it all more efficiently with far less expense. In addition, making users feel part of your brand’s community can strengthen their involvement in the project. Used properly, social media has never been more powerful for building and promoting a product.

‘This article was supplied by Joe Shervell, a keen blogger and social marketing enthusiast. He writes for www.datadial.net, a London-based Internet Marketing Agency.