One of the most common concerns relates to the authenticity of the feedback that is being received by IR. Feedback that has been summarised by a third party will always be at some risk of misinterpretation or embellishment. Heads of IR usually have good instincts for this and much prefer feedback that is unadulterated and reliably authentic.
A desire to provide substance is perhaps the main reason that authenticity is at risk when a third party is compiling investor feedback (or perception research), but this is the wrong approach. If an investor’s feedback is only that they ‘want to see deleveraging’ then in our view, this is as much as should be reported and no more. The answer to better substance lies in obtaining more responses.
Getting feedback from investors has become more difficult in recent years. Regulation and systemic market changes have both played a part in this, but feedback from investor communities is too important to give up on. By using technology and optimised processes, we see average response rates of 40%, often higher. A response rate that is <25% of investor engagements indicates a problem.
Some investors prefer to give feedback anonymously and must be free to do so, but others are very happy to give attributed feedback and should also be free to do so! We find just over half of investors are willing to be attributed, which is very valuable to IR and not only because it adds context to the feedback that has been given; it also enables more meaningful follow-up and subsequent interactions.
One of the challenges of having feedback being provided via multiple sources is the inevitable variations in how it is reported. Questions are asked and answers are reported, differently. This makes it very hard to compare like-with-like, and virtually impossible to monitor changes and progress over time in critical areas of sentiment or among key investor constituencies.
“If you can’t measure it, you can’t improve it.” Peter Druckers famous quote is very relevant when it comes to investor feedback, after all, if you don’t have some measurements around areas of market confidence and investor satisfaction, how can you prioritise which areas to address? Qualitative feedback is essential for understanding what investors are thinking, but quantitative feedback is vital context and often a much better way to understand what ‘the market’ is thinking.