Actionaria - what do retail shareholders want from communications?

I’ll be heading to Actionaria tomorrow, the annual show for retail investors in France. It’s mainly out of nosiness – having produced a brochure for one of my clients, I’m quite keen to see what the competition has come up with.

Retail investors are a small but important group – typically they are “sticky” shareholders. In it for the long term, goes the conventional wisdom, they are loyal to existing management and can help counteract price volatility resulting from trading by high turnover institutional investors, or market stress.

But what retail investors want – and therefore how companies should communicate with them – tends to be a relatively neglected area of research. Three facts stand out:

The first is that retail investors invest overwhelmingly in household names. In recent research by Investec Wealth & Investment, over half the 2,000 interviewees declared they were more likely to buy shares in well-known companies. Moreover, the same proportion would continue to hold such shares even if they performed poorly.

The second is that they want a simple story. They want to know what the company does, how it makes money and its vision for the future.

The third is that retail investors overwhelmingly use the internet to make decisons: research by the SEC shows that 4 out of 10 private investors will visit a company’s website to gain information.

What does this mean for communications?

First of all, if you’re not a household name, time to demonstrate how you fit into people’s lives. IMI proudly announces on its homepage, for example, that it “converts industry knowledge and market insight into design-engineered solutions”. This doesn’t mean much to most people. Dig deeper in the website and you discover they play a crucial role in areas of concern to the general public, such as clean energy, energy efficiency and healthcare. There’s material for a compelling retail shareholder story here – but it isn’t being told.

Second, make the most of the "third party" channels these investors rely on: press, and retail brokers (particularly in the UK and US). Not only do they reach a wider audience, but their independent view makes them valued by small shareholders. Tell your story simply to journalists and brokers. Then keep telling it.

Finally, invest in your website. Navigation is key – your audience is internet-friendly but not necessarily internet savvy. Ensure your IR site and annual report are no more than one click away from the homepage. Both the homepage and the IR landing page should provide an overview of what the company does, with information logically arranged so investors can quickly and easily locate what they need. Shareholders should have the option to subscribe to regular email alerts, or dedicated shareholder newsletters to keep them up-to-date with the company and generate further loyalty.

The limits of fluent

I was once checking in at a remote airport in the middle of China when I saw a sign behind the airline representative that made me erupt in a fit of giggles. “We take your bags and we send them all over the world!” it proclaimed proudly.

Trying to convey to the well-meaning Air China representative why this was so funny proved to be a non-starter. “It is not correct?” she enquired, sadly. “Yes and no. It’s hard to explain. But it doesn’t matter”.

It didn’t matter, of course. My bags arrived in Beijing, and subsequently at Heathrow. But this mistake – the result of someone who thought they could speak perfect English being allowed to print a sign - is repeated ad infinitum around the world in contexts where it does matter. Where the worst that can happen isn’t that a foreign tourist might have a good laugh on the last day of their holiday – it’s that you will look unprofessional to potential customers.

There’s a very odd phenomenon – let’s call it monolingual hubris – where people who are really, really careful about their own language, and would be horrified to send out anything with a misplaced comma or wrong adjectival ending, think it’s absolutely fine to publish something they’ve written in another language without getting it thoroughly checked first.

I know, because I’ve suffered from monolingual hubris myself: I once tried writing a website in French. It took me days. Weeks, even. I felt terribly clever when I’d finished. Gramatically it was virtually flawless. There was one small problem. It just didn’t read like French. It was the website equivalent of taking your bags and sending them all over the world.

There are a few exceptions to this rule, Samuel Beckett being the obvious one. But most of us are not Beckett. I’m fine with that, and now announce cheerfully to clients that I don’t write in French, but can introduce them to a great French copywriter if they need one.