Worried Shareholders? Here’s How to Assure Them
By Peggy Tierney, chief strategy officer, Force4 Technology Communications
During a period of crisis, such as an economic downturn, investors and shareholders face a number of challenges. The overarching one is uncertainty – be it about the length of a recession, or inflation, or a bear market, or which assets will do better than others.
Uncertainty is a problem because markets need stability. You can see this in the stock market during election season or any time the Fed changes interest rates. Predictability helps investors make decisions about the future because they can assume that what will come will look similar to what came before. When they can’t make that assumption, they become reluctant to invest.
Everything old…
What’s happening right now is nothing new. We look at 2008 and 2001 for similar market corrections. In both instances, investor funding for vaporware and gimmicks dried up and migrated to surer bets: B2B infrastructure and enterprise technology. The same trend is happening today. For companies in this space, a public relations program can help you stay on top.
Investing in PR/marketing during market change
Marketing is one of the first areas that executives cut to show investors that they are being budget conscious. While slashing marketing is tempting, this isn’t the best approach.
Marketing supports annual recurring revenue (ARR) and closing deals, which is more high-priority than ever when navigating a challenging market. Marketing shows confidence and stability to customers, prospects and partners, and investors by reminding them why they backed you in the first place.
Slashing budgets can backfire. A study by HBR in the wake of the 2008 recession found that companies that cut budget faster and more significantly than their competitors didn’t always do better. In fact, they had the lowest probability (21%) of pulling ahead when the market swung back into the black.
Three ways PR/marketing strategies can help shareholders rest easier
So, what can you do instead? Here are three strategies to show shareholders that you have a plan in place.
- Joint media opportunities: Joint media opportunities with technology integration and channel partners are a great way to get your story out. They include interviews, speaking sessions and panels, case studies, success stories, announcements and joint blogs. These opportunities show market traction, a healthy go-to-market strategy, a mature offering and happy customers. The words of peers often carry far more weight when it comes to prospective customers – and to investors, this shows that you have real-world deployments and successes.
- Analyst relations program: Another important activity that helps reassure investors and shareholders is a robust analyst relations program. Analyst briefings position your company positively against competitors and help provide insight into potential customers or acquirers in a climate when investors are ditching the IPO or SPAC as the liquidity event of choice in favor of acquisition. Peer reviews with customers also help bolster the business and technology case for analysts, in turn reinforcing the value prop of your offering for investors.
- Media relations: Media relations deliver a steady stream of corporate, product, customer and partner news to trusted publications that investors consult for information about their portfolio companies’ momentum, traction and general health. A lack of recent news about a company, especially an abrupt end after a sustained cadence of announcements and earned coverage, can set off investors’ warning bells. Abandoning media relations is not a wise move when investors are already uncertain.
Keep calm and market on
The market doesn’t like uncertainty, and that’s understandable. People would much rather place their money on a sure bet. So, don’t give investors any reason to doubt you. Suddenly dropping the activities that make you visible and broadcast your message can raise suspicions. And it creates a situation that’s harder to bounce back from after the uncertainty has passed.
Instead, use the three strategies discussed above to create market impact and forward momentum, even when the economic outlook is less than rosy. This will not only alleviate shareholder concerns but even inspire confidence in the investing choice they’ve made.
