Corporate Eye

...compare, compete, excel

Lucy Nixon

Lucy Nixon

Bond Investors are Investors Too

For many companies, Investor Relations is all about the stockholders.  This focus is not surprising.  Regulatory filings are generally focused around company stock, and there tend to be more stock investors than bond investors ringing the phones of the IR group.

Stock investors tend to be a more fickle bunch, especially retail investors looking for quick trading profits.  Such investors are actually the least likely to ever even see your IR page, let alone examine it carefully.  However, longer-term investors, and certainly institutional investors will want to devour as much information as possible about the company and its operations.  Often, this research is a quest for information that others don’t realize yet, or that is being misinterpreted by the markets.

If others don’t realize just how strong the company is, or how quickly it will recover from its recent missteps, then buying now in order to wait for others to finally see the more obvious data come in can result in a tidy profit.  However, finding such information means wading deep into documents, filings, and transcripts in search of uncovered stones, since just about everyone will be aware of more obvious elements like P/E ratios and earnings statements.

The quest of many IR departments is thus to fulfill the basic legal and regulatory requirements for the majority of visitors, as well as provide data and information to be absorbed by media, analysts, and those investors and potential investors who want ever more data.

What about Debt Investors?

For many years now, the IR departments of many companies have simply outsourced their bond-based Investor Relations to the various debt ratings agencies like Moody’s, Standard and Poors, and Fitch.  However, with the financial meltdown came the uncomfortable realization that the ratings agencies don’t always know best.

Still, most debt investors at least start their investment research with the bond ratings provided by the rating firms.  Yet, many IR websites don’t even acknowledge the company has bonds outstanding, let alone provide ratings or research.  This may be a mistake, especially for companies with solid ratings.

Consider the income investor looking for, perhaps, a dividend paying stock.  Maybe, for whatever reason, he decides that while he likes the company, the stock just isn’t right for him right now.  But, his attention is drawn to the Debt or Bonds link on the IR site and maybe, he likes what he sees there.  Purchasing those bonds would surely keep the company on the radar of such an investor and may result in a share purchase later, particularly if the stock is unfairly beaten down by surrounding events.

Likewise, a potential investor who is on the fence about a stock purchase may have already devoured all of the information provided, but still hasn’t been able to come to a solid conclusion.  Upon clicking on the Debt links in the sidebar, the investor notices that the company’s outstanding bond issues are all highly rated.  Even better,  he notes that the bonds are all issued at low rates suggesting both the consensus opinion that the company is sound, and that it can use the leverage provided by the capital markets if the opportunity arises.  Combined with the other “pluses” from the rest of the time spent on the IR site, those bond ratings turn the potential investor into a shareholder.

Providing Bond Information

Certainly, a company’s debt information can confuse an otherwise clean and solid Investor Relations web page.  That is why it is often wise to create a sub-site for debt ratings and other bond information.

old-mutual-investor-relations-page

Old Mutual provides just such information in a clean and classic fashion.  On an investor relations site filled with information, a single link is displayed.  This serves both to avoid complicating the investment information sought by equity investors and shareholders, and by being the same kind of link in the menu as all the others, it also conveys that debt information is regarded as just as important by the company as the other similarly linked items.

Choosing to title the menu link as “Debt Investors” allows the company to sidestep any negative connotation regarding its outstanding bonds.  This section, the title suggests, will not be an excuse for having excess debt, but rather a way to ensure that investors in such products are properly informed.

Once clicked, the bond investor finds themselves on an internal landing page where at-a-glance information is provided in the form of a table.  An investor, whether equity or debt can peruse the outstanding issues and their ratings.  If further details are desired, links are provided both in the form of sub-menus.  Each issue is also clickable resulting in the user being shown the offering circular for that particular issue.

debt-ratings

The company also provides its overall ratings, and links to the full company report from the rating agencies.  This ensures that the prospective investor will go from here to impartial third-party research rather than a Google search sending them to whatever commentator happens to have chosen the right keywords for their search engine optimization efforts.

Old Mutual goes a step further by providing a dedicated Debt investor contact for users.  Any savvy debt investor knows that their is a world of difference between an equity investment and buying a company’s bonds, and it must be reassuring to see that the company understands that as well.

Investor Relations Best Practices

Consider incorporating debt ratings and bond information on your investor relations website as well.  Take care to ensure that the additional details do not add to the overall complexity of the IR webpages by segregating them under their own easy to find link or menu option.  However, don’t make the mistake of “burying” debt information under other seemingly related links.  Bond data is not so common on IR sites yet that a bond investor will look very far to find it.  Two levels deep in the menu structure virtually guarantees the user will have left the site before finding what they are looking for.

Regulatorily speaking, providing links to companies like the rating agencies are some of the safest links an investor page can make, as they are already widely regarded as impartial third-party links.  However, linking to only one agency with the highest rating would be a mistake.  If possible, provide links to all three major rating agencies, in addition to any other provided links.

The investor who finds what they are looking for on your official IR site will find little incentive to go elsewhere, and with the current environment that rewards company criticism over praise, that may be half the battle.

H&M: taking responsibility

Browsing H&M to see if I could buy a voucher online (I can’t – only in stores), I inevitably ended up in the corporate pages “just to see”, and found something rather interesting on their CSR landing page.

H&M CSR landing page

This is the CSR Manager answering questions in a ‘column’ – which she’s been doing since February. It’s not quite a column, although it does convey corporate opinion; it’s not quite a blog, though it does express personality; it’s not quite microblogging, either. It may even be achieved technically by RSS.

The technology doesn’t really matter – or only in that there isn’t really a conversation going on, and whatever technology they’re using at the moment wouldn’t allow that. What does matter is that the person responsible for CSR in that organisation (Ingrid Schullström) is showing their face, taking responsibility, discussing issues and responding to questions – presumably, questions that have been emailed in.

She gets a name-check on the corporate organisation page too, as responsible for Environment and Corporate Social Responsibility. That is unusual – good for H&M.

So what next for H&M; will they feel able to remove the timelag between emailed-question and posted-reply by allowing a blog-style comment and reply? Or even a microblogging connection? I know it takes a lot of time and effort, and is a significant step (from which it might be difficult to retreat) but it would be very interesting to see.

PDF Ebook Resources to get you started in Social Media

I almost entitled this article as “Don’t Let Your Business Lose Out in the Social Media Land Grab”.

You will already have read on this blog how important social media is and will be to the corporate world, but you might still have some reservations. That is fair enough, and to be honest, I still have reservations about some of it.

But really, if you do nothing else with social media for your business, at least make sure you secure your business names, brands, and as important, your own name.

Just like in the domain name world, in most cases only one person can hold these uniquely named accounts. You might not think of a Twitter account as being prime real estate today, but in fact business is already being done there, people are already passing off their own lunatic rantings as those of major brands and celebrities, and you can count on it only getting even more crazy in future.

So, grab your names. Go now.

Back so soon? OK, now what next?

The key to making the most of social media for your business is to work out which parts and tactics work for you, and which do not. That means getting your hands dirty and trying things out. I have had terrific return on investment from blogging, Twitter, and to a lesser extent, LinkedIn, but have found MySpace less than stellar and I am still finding my way with FaceBook. You will not know if these services will work for you unless you take a look.

If you want to look at Social Media for business, check out “What is Social Media” by iCrossing, which is a bit old but still explains the basics: http://www.icrossing.co.uk/fileadmin/uploads/eBooks/What_is_social_media_Nov_2007.pdf (PDF)

As a professional you will need to be on LinkedIn: http://www.linkedin.com

Seeing as I already mentioned Twitter, and Twitter is one of those services where only one account can hold a particular name, you really need to get started with that service today: Twitter

Mari Smith is the Queen of FaceBook, and she has a free FaceBook tips report telling you how to get started, how to avoid common mistakes, and how you might use it for business. Get it by adding your email address, right here: http://marismith.com/facebooktips/

Finally, for individuals in this challenging career environment, I have to point to Chris Brogan’s report on how to use social media to find work :http://www.chrisbrogan.com/free-ebook-using-the-social-web-to-find-work/

Hopefully these free resources will give you an idea of the potential social media holds for your business, but the key point is grab those accounts and get started!

This was a guest post by Chris Garrett. Chris writes for several blogs and companies including Cogniview, the leading provider of PDF conversion software, as well as his own blog Chris Garrett on New Media where you can get two free ebooks just for subscribing.

Getting it right for the best customer experience

A month ago, we heard from Colin Shaw (founder of Beyond Philosophy) on how companies should react to the current climate. Today he’s back, to share his views on one of the secrets of a great customer experience…

A few weeks ago we conducted our annual study tour in London, England. This is where we take delegates to visit a number of leading companies for a behind-the-scenes look at how they approach the task of building a great customer experience.

The companies included Prêt-a-Manger, Virgin Atlantic, Mandarin Oriental Hyde Park, Dell Computers, T-Mobile, Lexus Cars, AOL and Microsoft. As we travelled around these companies on the luxury coach, I pondered what the common traits are of companies who provide a great customer experience? Undoubtedly one of these traits is “attention to detail”, so let’s give you an insight as to what some of these companies did. Prêt-a-Manger told us about the absolute struggle they go through to make sure that all the ingredients in their sandwiches are additive free so as to enhance the taste of the sandwiches. This involves a great deal of searching to determine the best supplier, as well as extensive tasting. The time and money they spend on this activity is phenomenal and is testament to their customer focus.

But this is just one element of the attention to detail these companies pay. Liam Lambert, Director of the Mandarin Oriental Hyde Park Hotel told us of his “attention to detail”. He wanted his doorman to stand out as ‘beacons’ to help promote the hotel – as it is on the less busy side of the street and after seeing other hotel doormen who were all dressed in grey overcoats. This colour made them blend into their hotel buildings and act as great camouflage. Liam decided to dress his doorman in red, creating a true beacon. It was clearly effective as more people noticed them than ever before!

Liam told us about how he treats his new arrivals and our group was privileged to attend and witness his ‘Morning Prayers’. This is where all the managers from each department within the hotel get together every morning and talk through each new guest explicitly that is arriving at the hotel that day. They look at who they are and look at where they’re coming from and therefore how likely they are to be tired, for example. They even get on their guests’ web sites to discover more about the person staying so that they can ultimately provide them with a better service. Finally, if available on the web site, they will print a picture of the individual who is staying with them and place it on the ‘Guests Wall’ so the staff can recognise the person by name.

So, do you go into that amount of detail with your customers? When a guest is staying with them they ‘learn their behaviour’. They also take note of the drinks they order, whether they like ice or not, whether they have a cappuccino or a Latte after a meal. This information is then recorded on what is effectively a CRM system, which is them utilised to enhance the customer experience on subsequent visits. This is pure attention to detail!

Our visit to Virgin Atlantic highlighted to us the amount of time they have spent on working out when the optimum time is to deliver hot towels in Upper Class – before or after takeoff, for example. They also have calculated the most pragmatic and attractive layout of a service trolley, and have great new lie down beds situated in Upper class. As someone who spends a lot of time travelling around the world giving conference speeches, I can’t wait to try them.

And Dell Computers have set up a number of ‘Listening Posts’ to ensure they capture customer information and convert this into something that is usable by the customer.

So, attention to detail in building great customer experiences is paramount. The converse is also true, and lack of focus on the customer experience will detract from it. The other night I visited my local cinema. The ‘baby booster chairs’ were left in the aisle so that when we entered the cinema late, we nearly broke our necks falling over them! Not to mention the vast queue to buy a ticket, with only two tills in operation and three people standing at the back chatting whilst dozens customers showed their indignation. We have all had similar experiences, but it takes thought, time and commitment to build a great customer experience.

We recommend you to pay attention to the detail in future – both in ‘real life’ and on the various sites that are part of your company’s web estate.

A classic example of focusing on the details that make the customer experience of corporate web estate better is Amazon’s recommendation system, which gives the customer suggestions as well as providing potential up-sell opportunities. Like the Mandarin Oriental example above, this helps the visitor feel that the company ‘knows’ what they like. And the customer reviews provide reassurance, so the visitor feels they are making the right choice.

At a more mundane level, ensuring that the website is user-friendly, with appropriate help easily available when needed, matters. Visitors need to be able to navigate the site to find what they need (without falling over unnecessary ‘baby buggies’, or being led down navigational dead ends). And ensuring that the site can be found easily, and is distinctive helps. Consider the Mandarin Oriental again: is your site dressed in the appropriate livery, and acting as a beacon for your visitors?

Thanks, Colin!

Using Media Relations to Deal With a Sagging Economy

What is the best way that a corporate entity can combat sagging sales and manufacturing to deal with an economy in downturn? Ignoring it doesn’t make it go away. Nor does pretending that there isn’t a solution will work either. Just as bad is coming up with unrealistic, unmarketable expectations for a corporation in the times of economic uncertainty and uneasiness.

In times of hard financial numbers, a corporation just like any other business has to be creative in their marketing and advertising efforts in order to stay above their competition. They must look at non-traditional models and applications, seeking ways to bring attention to their mission. And, not to try to overuse an already over-used phrase, but yes, they must think “outside the box.”

Just recently, McDonald’s introduced their new “McCafe”, a new social community designed for coffee drinkers/lovers who also love the networking scene. In a time when places like Starbuck’s, Joe Mugg’s and even the local coffee houses are dominating, McDonald’s knew that they had to be creative and forward-thinkers in their marketing strategy. The McCafe concept is following closely along the base model of Twitter and Facebook and reaching out to the social community as a voice with something to say. And, they’re using all available resources to get it.

McCafé launched a Twitter account at McCaféYourDay. As of press time, McCaféYourDay had 134 followers.

Although it’s not new, it’s definitely creative and companies would do well to embrace what is available and make full use of their resources.

The economy doesn’t have to be detrimental to a corporation. It doesn’t have to end in disaster, and no rule book says that they have to go away because business is declining! New strategic methods, creativity and resources are the essentials in building and sustaining your business in this questionable economy. What strategies can YOU use for your platform.

How can a corporation tell when it’s time to start the creative flow going? It’s time to start the creativity immediately and preferably at the business’ inception. Corporations typically do not advertise like other public companies, therefore, they must subtly market through their resources. Finding creative ways is a must.

Being creative can involve a lot of different ways to get attention. A couple of weeks ago, I wrote about the impact that a marketing campaign by Kraft had on the media. Apparently, the post was so viral, people were trying to enter the contest here at our blog at Corporate-Eye! In the space of an afternoon, Lucy (the editor) and I saw a host of entries with people trying to enter the contest through our site, all from a post that went viral, full of information. .

You must be both enticing and creative when you are trying to wow customers. As a corporation, you may not have the edge that you’d like in your marketing tools, but again, using what you already have is the key.

How can your company maximize its growth rate? What creative flow can you think of that will help your corporate entity thrive right now?

Swine flu and the corporate response

3d-model-flu-virus

Now that the initial flurry of panic about swine flu has stabilised, and everyone’s had a chance to plan their response, how well do you think that companies are handling this on their corporate website? We’re a long way from a crisis, but my ‘handy’ booklet from the government about swine flu arrived this morning, so clearly someone in authority thinks a crisis is coming…

There have been calls for companies to communicate with their employees about how to deal with swine flu should it affect them, and for companies to have contingency plans in place for a wider outbreak of flu. It is probably not appropriate to document these plans on the corporate website, although it wouldn’t hurt for a reassuring voice to be heard… especially since absentee rates have gone up.

Those companies directly affected (in a good way) by the approaching pandemic have done a good job of communicating with at least some of their website visitors.

roche flu centre

Roche, perhaps the company most associated with combating flu pandemics, have a dedicated flu centre, where they’ve pulled together images, video, factsheets and press-releases about the flu, their products, and the actions they’ve been asked to take.

This is clearly linked from the home page, where they have a large banner header about influenza – and the term ‘influenza’ also appears in the tag cloud below.

In addition, one of their recent Investor Updates refers to their donation to WHO back in 2006 of 5 million treatment courses of Tamiflu, and confirms that they’ve been in discussion with WHO about the recent outbreak.

gsk flu centre

GSK have also collated some information about flu, which they’ve made available via a couple of links from their home page – one to a GSK Update and one to a collection of press releases. They also have a link to a pre-pandemic flu press kit from their press kits page in their media centre, which didn’t seem to be available on the day of our visit.

These companies – despite presumably potentially having improved sales this year as a result of flu – don’t seem to be addressing investors directly on this topic. Roche’s page providing key figures for 2008 does mention Tamiflu sales, but only to exclude them from the count – and it isn’t easy to learn anything more detailed. For example, how much of their business is based on Tamiflu sales? Prospective investors may want to know how the company expects to be affected by the impending pandemic. Not specifics – obviously Roche can’t and wouldn’t want to predict the need for Tamiflu – but if they provided figures for last year, we could do our own predictions, perhaps using a scenario analysis system like Adidas’.

On the other hand, perhaps stock prices will be minimally affected by a pandemic, and so this wouldn’t be interesting to investors.

But wouldn’t the company view on this be interesting to a corporate visitor in itself? What do you think? (I think that there will be some economic impact, though perhaps less than you’d think given the media discussion over the last couple of weeks).

As for corporate responsibility, there is a very interesting article on the limits of corporate responsibility using Roche as an example on the Insead site – definitely worth a read.

Image of flu virus courtesy of Roche