Unleashing the Power of First-Party Data: Trust-Building Strategies for Investors Relations Professionals
CEOs can’t allow for investor surprises like the emergence of activist investors or an unexpected selloff of the company’s stock by a major institutional investor. No company can predict every action an investor can take. But today, amid an uncertain economic climate, businesses have less margin for error. Amid economic uncertainty, companies are enacting widespread cost-cutting measures to protect their market valuations, and they can ill afford investor surprises to upend their carefully calibrated measures. So, CEOs are leaning on investor relations officers (IROs) to understand investors better – and build trust with them. This means, among other things, that the IRO must:
- Move away from being a mere observer of investor sentiment. The IRO must now embrace the role of an astute observer and analyzer, who can proactively identify the pressing issues that investors truly care about. The IRO must possess a comprehensive understanding of how investors gather data that influence a company’s strategic direction, capital allocation decisions, incentive systems, and other matters that hold significance for investors and contribute to the effective functioning of the board.
- Build relationships. IROs must possess an adept understanding of the dynamics of competition and proactively anticipate the decision-making patterns of analysts. IROs must possess the skill to identify suitable investors for their company, cultivate relationships with them, and actively engage them in the company’s endeavors. As CEOs are increasingly burdened with dedicating their time to external stakeholders, the IRO can alleviate some of the pressure by identifying and nurturing the right investors, thus facilitating a smoother relationship between the CEO and the investor community.
IROs are challenged to understand their audiences
These demands are putting an incredible amount of pressure on the IRO -- especially now. That’s because the advent of a more privacy-centric world has stripped IROs of some of the tools they need to follow user behavior on the internet. For instance:
- In 2021, Apple introduced Application Tracking Transparency, an iOS update that resulted in 80 percent of Apple iOS users opting out of having their behavior tracked on Apple devices. As a result, businesses lost an important way to track user behavior across the web and understand it via third-party cookies, or the digital footprint that people leave when they browse the web.
- In 2023, Apple’s iOS 17 update is expected to make it harder for companies to track user behavior via email. iOS17 is expected to block senders from tracking whether or not a user opens their emails. This will make it more difficult for senders to build a profile of email activity. This could make it more difficult for businesses to track users who use email privacy protection.
- In 2024, Google will block the tracking of third-party cookie tracking on Chrome, the world’s most popular browser. This action will, in effect, kill third-party cookies.
So, as a result, IROs have access to less data about their audiences, which makes it harder to understand them efficiently. The solution: embrace first-party data.
The solution: better use of first-party data
First-party data refers to data that a company collects directly from its customers or website visitors. This type of data is considered to be the most valuable and reliable source of information because it comes directly from the source. It includes a wide range of information, such as a user’s browsing behavior, purchase history, and other personal or behavioral data types. This data can be collected through various means, such as website cookies, customer surveys, purchase histories, or account registration forms.
Companies often utilize first-party data to better understand their customers, personalize their marketing campaigns, and improve their overall business strategy. One of the best uses for first-party data is its potential to be used to support investor relations. After all, investors leave plenty of breadcrumbs when they visit your site and dwell on one page or another. The time they spend researching specific sections of your site can leave clues as to their intent. Examples:
Who is interested in your company?
When investors willingly share their names and company affiliations by filling out lead forms to obtain more details about a company, they create an opportunity for the IRO to get more granular information about who is interested in the company. This is especially true when first-party data reveals a pattern, say, a high volume of requests coming from the same investor. This data can identify an opportunity (perhaps an institutional investor wanting to take a position in a company) or a threat (an institutional investor with a reputation for being an activist). This data gives the IRO an important advantage: the ability to be proactive.
What content is relevant to your audience?
Where investors spend their time on your site is a clear barometer of their interests. Consider environmental, social, and governance (ESG) content. To assess how well businesses manage the risk of ESG, investors are demanding consistent ESG data and narrative to support their investment decision-making. We recently studied traffic on our client’s sites to identify the most popular type of ESG content, ranging from a company’s sustainability strategy to board remuneration approaches. When we break down the results for each client, we can help them understand how to tailor their ESG messaging accordingly across all their IR content.
What first-party data cannot do for an IRO is take action. The IRO still needs to act decisively with information. At Investis Digital, we help IROs do this all the time through our combination of strategic counsel and IR data analytics tools.
To learn more
At Investis Digital (iDX), we help IROs craft compelling narratives through our own corporate comms/IR expertise that apply the power of your first-party data. We also publish some of our ideas with thought leadership. Applying first-party data is one of the topics we discuss in a recently published white paper, How to Crush Every Investor Relations Challenge in Your Path. The white paper draws on 20+ years of experience helping IROs create compelling narratives that build trust with investors, as well as the data and insight we have collected over this time. Our strategic counsel, bespoke IR websites, data analytics, secure webcasting capabilities, and a 15-minute response time are all part of our IR offerings.
Learn more about them on our website, and read our white paper, How to Crush Every Investor Relations Challenge in Your Path, for more insight.