How to Grow Your Investor Database
Most listed companies are spending a lot of time and effort encouraging shareholders to provide email addresses.
Having digital access to shareholders can help companies save on compliance costs and reduce the need for expensive printing and costly mail-outs. Having a strong retail investor database can help you to create a loyal investor following that you can then educate and engage with your company communications building their investor interest.
But obtaining shareholder email addresses is not always easy, nor is gathering a database of interested potential investors.
In today’s digitally geared market, restricted email reach means higher expenditure on printing and mailing annual reports, notices of meetings and other material communication relating to the shareholder. Perhaps even more importantly, it creates a disconnect in a company’s ability to distribute IR and corporate messaging. A lack of active and engaged investor followers can also impact the company’s ability to influence its stakeholders at critical IR events such as the Annual General Meeting.
With the lure of affordable and immediate digital communication, companies have been trialling new and innovative ways to get the email details of existing and potential investors, citing responsible Environmental Social Governance measures and cost cutting activities as incentives.
There are a number of techniques that can be used to gather an investor database and there is good reason to look to implement this. Email has been shown to build the greatest return on investment and is still the number one communication preference for investors.
In the last few years many companies have moved to a more digital communication with stakeholders. For example, in 2012, AMP mailed about 700,000 copies of the printed notice of meeting, and emailed a link to the documents to another 200,000 shareholders. Only 322 people attended the meeting while almost 40,000 shareholders voted by proxy. The printed notices for the 2012 AGM used about 45 tonnes of paper to produce.
AMP actively encourages shareholders to register for online communications through its website, listing easy storage and retrieval of information, recent news and low wastage of paper as some of the advantages.
Suncorp is another example of an Australian company that has successfully used campaigning to obtain shareholder emails.
Using just ten $100 Coles Myer vouchers as an incentive, the company obtained 15,500 email addresses – direct contact to almost 20 per cent of its investor base.
Company websites are also proving to be a beneficial platform for converting shareholders into electronic consumers. Online investor centres can offer shareholders far greater benefits than print materials, including access to real time ASX data and overall performance of the investment, and more detailed information about the companies they’re investing in. For most shareholders, this level of data is worth handing over an email address.
And sometimes all it takes to obtain an email address is the offer of information.
Australian medicinal cannabis company MGC Pharma allows visitors to its website to request an investor presentation by providing an email address, in exchange for information detailing its core strategy, an introduction to its leadership team, talks about its business strategy in Australia, the types of pharmaceutical products and production facilities it offers, and an update on the Australian market scenario.
Some shareholders may understandably be avoiding handing over their email information for fear of being bombarded with messaging. To counter this, some companies declare up-front how often they will send email – for AMP that is about five emails a year on average including information on the annual general meeting, annual report, dividend statements, and significant company announcements.
The big four banks have taken digital communication to another level. ANZ, for instance, has a dedicated Shareholder Centre with a wide scope of services for investors. ANZ is also active on Twitter with financial information and progress with nearly 17,000 followers.
The bank reveals it collects most personal information directly from shareholders when they, for instance, “open an account, fill in an application form, deal with us over the telephone, send us a letter, use our website or visit a branch”. It also sources publicly available information from telephone directories, the electoral roll or other websites as well as third parties such as credit reporting bodies and marketing companies.
Another way companies can obtain email addresses is when new shareholders buy shares online and their details pass through CHESS – the Clearing House Electronic Subregister System – to the company’s share registrar. But this isn’t always the case.
The number of active internet users is nearing 4-billion people globally, so we can expect to see a shift in the way individuals, including shareholders, choose to receive communication from companies.
With a growing number of younger investors, i.e. millennials, becoming involved in the share market, there are many cases of shareholders opting to receive email communication. In its annual intelligence report for 2016, Australian stock transfer company Computershare delved deep into data garnered through 750 AGMs attended by more than 24,000 people.
Its research revealed email broadcasts are growing in popularity, and noted a 10% increase on 2015 with 3.7-million emails delivered. Its issuers had on average about 42% of shareholder email addresses, but less than 2% of mobile phone numbers.
Some companies offer an incentive for shareholders to handover their email address and receive timely and convenient company communications online. As investors are increasingly researching and reviewing online, a successful strategy is to develop more detailed and reader-friendly digital materials like, interactive eNewsletters with embedded video’s, interactive Sustainability Reports, interactive Annual Reports and interactive property compendium’s.
The most successful method of gathering both potential investors and shareholders is to create a strategic and consistent multi-channel communication plan targeting key stakeholders. This involves really understanding the communication needs and preferences for your target audiences.