Fishing expedition, or a genuine call?
I expect you’ve seen the boiler room scam warnings up on the investor relations pages of most corporate websites. Here’s one, for example, on Rio Tinto‘s site.
The more people are warned about these scammers, the better their chances of avoiding losing their money, so I like to see these warnings. But then, I also go to Hoax-Slayer to check up on those sad stories that arrive in my inbox via forwarded emails, so perhaps I’m just super-cynical.
But what if you receive a call yourself?
Am I being scammed?
This morning I had an unusual cold-call, and I was very dubious. A complete stranger, calling out of the blue to offer me a special deal: a tax-break if I invested in a company I’d never heard of? You’ve got to admit, that does sound distinctly dodgy. And he pushed hard:
- some name-dropping – trying to wow me with glamour?
- mention of cutting edge development – trying to wow me with technology?
- and about having a link from their site to the FSA – does he think I don’t know that putting a link on your site requires no authorisation from the people at the other end?
(Just to be clear: he was calling me as a private individual, nothing to do with Corporate Eye – I asked).
His clear goal was my email address, to send me some information that wasn’t available on the website. And here’s another warning flag in my mind: why wasn’t this information on the site if it was so important?
My thought was: why is he calling me? What has this to do with me and my life? Does he think, like all those stairlift and cruise companies that call, that because of my postcode I’m likely to be a naive, technologically illiterate, little-old-lady?
So I took a name, number and website address, and gave out nothing more than he had already.
But now I think I was wrong.
How can you prove you are genuine?
My caller is listed as a sales manager for the company, which is in turn listed with Companies House. The website looks genuine enough, though there’s no indication of the company number on site (surely a legal requirement these days). And they have a clear internet history discussing their product and company; and I can track the individuals on the internet too. All of which makes them look more convincing.
So perhaps (perhaps!) I was wrong to be so doubtful. Not that I’m going to change my mind about investing. But I think there are a couple of interesting things that came out of my morning’s conversation:
- Is it effective — or even acceptable — to cold-call potential investors?
Based on my reaction, probably not. I have no idea how I qualified to be on their call-list, and so was inclined to be negative from the outset. Moving a cold contact from that position to being willing to hand over thousands of pounds was always going to be an uphill struggle, and may not be the most effective way of raising funds.
Perhaps it would work better if there was some connection between us already. Facebook? LinkedIn?
Or if I had some experience of the industry, or a track record of investing in this kind of venture.
Although we here at Corporate Eye like to see contact between the investor relations department and the retail investor, I don’t think that cold-calling is the way to go.
- Provide all necessary information on the website
My proposal to my caller was that instead of him sending me information, I should get it from the website. But, he said, I’d need the special pack … So here’s the thing: why not put that on the site as well? Then they might, just might, get drive-by investors. Not to mention greater credibility with people like me. Which brings me to…
- Not all potential investors are the same
I don’t really blame my caller. I’m just a name on his list – he has no idea that I regularly review investor relations sites, or am active on the internet. Though he could have found that out with a quick Google search – after all, he had my name and address already. And given the size of the suggested investment, a few minutes to Google search could easily be recouped with a more targeted script. (And, for a shot at big money, making the background noise less of a call-centre would help too).
Yet cold-call scripts as a rule don’t take account of the variable expertise and interests of the cold-called. Am I going to be impressed by big names and new technology? Not that much, though others might be.
How about making it more of a conversation, and less of a script? That way I’d be more engaged, and more likely to listen.
What do you think? Should I have been more flexible? Would you contact potential investors by cold-call? Do you engage them in guided conversation or run a script? Can people find out everything they’d need to know about you online?
Lucy is Editor at Corporate Eye
Nice writing. You are on my RSS reader now so I can read more from you down the road.
Allen Taylor