THERE were a few surprises in a recent study we conducted of how top companies invite and deal with email questions sent to the investor relations department.
Our objective was to test how responsive these blue-chip companies are to email inquiries directed via their IR websites. We also wanted to measure the quality of the replies we received to our study question.
The 100 companies we chose were drawn from the S&P Global 100. As such, our study group included some of the world’s biggest enterprises and so we expected the results to exemplify best practice.
And maybe they would have had we been able to send our email message to every company in the sample. We couldn’t test the responsiveness of 27 IR departments because their websites provide no IR email address or form with which to submit our test inquiry.
While the fact that more than one-quarter of sites offered no email contact was by far the worst finding in our study, it wasn’t the only failing. This article includes examples of actual responses we received from companies and provides guidelines for handling investor relations email enquiries, including:
- Setting investor expectations for when they can expect a response;
- Acceptable response times based on majority practice;
- How to treat delayed responses; and,
- How to write replies that make a good impression.
Don’t expect web users to use the phone
The Internet is arguably the most efficient communications network investors have. It crosses time zones and never sleeps. It’s the best way to serve and attract an international investment audience. An investor in Japan can be researching your company and asking questions while you’re sound asleep in New York.
By comparison, the phone, fax, courier company or postal service are far less convenient. They most often require you to actually speak with someone to be successful, but there’s no guarantee you’ll reach someone. With email, you can be pretty sure that someone will eventually get your email.
It’s also a little rude to expect website users to pick up the phone or post a letter when they’ve taken the time to visit your company on the Web. What could be quicker for them than dropping you a line via email when they’re already there? Refusing to accept email is like inviting somebody to your office for a meeting and then having them wait outside in the lobby while you speak to them on the phone. It shouldn’t be done.
Tell people how long they’ll have to wait
As the first study of IR departments’ responsiveness to email, we had no idea what to expect. And there were no hints on the IR websites of the 73 participants in the study whose email addresses or forms we could find. None provided an indication of how long we would have to wait to receive a reply. Our message (below) was going into the proverbial unknown.
Our test message:
To whom it may concern:
What was the total compensation received by your chairman of the board in fiscal 2000? I cannot find the information on your website.
Please email your response to me as soon as possible.
Thank you
The “Black Hole” feeling was particularly true of companies where the only online contact for the IR department was through a generic email address or an email form. These amplify investors concerns about getting a reply from your company because no one is specifically accountable to answer them. They are also impersonal and tend to make companies appear arrogant and disconnected from their shareholders.
Auto-responders are useful, but every legitimate email request deserves a proper reply.
We recommend that you include a note in your contacts area to tell people how long they typically will have to wait to receive a reply. While it’s best to tell people before they send their message, you can also do it afterwards with an automated email reply.
An auto-responder replies to each incoming message by automatically sending a response to the sender. Four companies in the study group used auto-responders These told us when the company would get back to us, given us confidence that our message had in fact been received and probably being worked on.
And in most cases, we did get a follow-up response from companies using auto-responders. One company, however, did not follow up. Its auto-reply message seemed to be used by the company as a way to fob people off. It made no mention of when to expect a reply, except to say that if it warranted a reply, one would be forthcoming “in due course.”
The rest of the message contained a long list of instructions for what information the company provided online, along with links to a variety of documents on the site. At first, the company’s detailed auto-reply made a good impression. But when we didn’t receive a follow-up, the company came across as unfriendly and rude. When we looked at the message again, it was clear we’d been given a virtual snub.
So, if you’re going to use one, never rely on your auto-responder alone. It cannot replace a message prepared by a human who can interpret the precise nature of the question. Auto responders are easy to set up and cost very little. Many Internet service providers include the feature in their email services. They add speed, technical savvy and an impressive responsiveness to email enquiries.
Respond in 24 hours
So what’s a reasonable response time? Our test question was straightforward enough that we believe that 24 hours is reasonable. And 56% of the recipients replied within that time. Only 8% of companies took longer than two days to get back to us, the worst taking 22 days to respond.
56% of firms responded within 24 hours, but 35% never replied.
However, over 35% of companies failed to reply to our message. In one case, the email address on the company’s IR website was incorrect and our message was returned undelivered.
Obviously, turnaround times on enquiries depend on the nature of the request itself. If the request is going to take longer than 24 hours to research, let the individual know and tell them when you plan to get back to them.
If for some reason a message is overlooked and you’re late in getting back to the sender, apologize for the delay. Don’t just answer the message without acknowledging that you were slow in replying.
If you're late in responding, apologize. Although in this case the company has still made little effort to provide the information we asked for.
Provide the information people ask for
Of course, speed is not everything in handling investor email. It is more important that people get the answers they are looking for.
Only a quarter of the companies that responded told us what we wanted to know – their chairman’s compensation in fiscal 2000. Many told us, sometimes rather abruptly, to check the proxy statement or annual report with no additional pointers.
Others were much more helpful, providing the figure we ask for, a link to the proxy statement or annual report and, in several cases, including the proxy as a PDF attachment. We don’t need to tell you which replies made the best impression.
This email provided the figures we requested, saving us the hassle of going back to the site to look up the information ourselves.
Unhelpful replies like this one do nothing for a company's image. At minimum, a page reference or link should have been provided.
Remember you’re representing your company
People tend to be sloppy and informal in email with friends and even business colleagues. But there’s something to be said for observing some decorum in official company email like investor enquiries, especially if you’re unfamiliar with the sender.
One particularly good reply we got came from Allianz, the German insurance giant (see below). We were impressed not only by its completeness but also by its style and tone.
It started by thanking us for our interest in the company, told us where we could find the information on the website, provided a link to the document plus a page reference, and then provided the figures we requested. It ended with “kindest regards” and the name of the investor relations staffer.
Allianz had one of the best responses to our question, even though the company does not disclose individual directors' compensation.
By contrast, some of the replies we received gave the impression that we were being told to get lost. They were abrupt and unhelpful. The worst of these scolded us to go back to the site and take a second look — without providing a link back to the site!
Perhaps this was because the question itself suggested our motives were not completely financial and potentially related to governance concerns. Or perhaps they figured the question must be from a retail investor.
However, it could just as easily have come from an institutional investor. And anyway, it shouldn’t matter. Both have an equal right to the same information if it is available.
Needless to say, companies that provided weak responses to our question made a poor impression. They made us wonder about their commitment to their shareholders, and also how successful they could be in business if they treated their customers in the same way.
Provide direct hyperlinks
People will often ask you for information that is available in documents on your website. While this may be a sign that your site is difficult to use, it also means that you will want to tell people where they can find the information they’re looking for.
Most companies that responded to our question referred us back to their websites. However, these referrals varied in their usefulness because only a handful of firms provided a hyperlink to the relevant page or document on their sites.
Don’t dump people on your homepage with instructions to a page somewhere on your site.
Direct hyperlinks are a big benefit on the Internet. Instead of having to navigate through three or four levels of your site, one click can take investors straight to the information they need.
When you don’t provide direct hyperlinks, you often have to provide clumsy navigational instructions to explain the sequence of clicks people must take to get to the document they need. This is an unnecessary waste of time for both you and the investor you’re writing to.
Ultimately, it’s not the speed or decorum of your replies that really count, it’s the quality of the response itself. Of course, the best situation of all is to avoid getting email enquiries in the first place. A good IR website should be able to answer the most common questions on investors’ minds and help them to help themselves.
In Investor relations contacts pages, we look at ways to reduce the amount of email you get by anticipating and answering questions before your website visitors feel the need to click “SEND.”
Dominic (bio & disclosures) is IR Web Report‘s founder and an online investor relations consultant. He advises leading public companies and investor relations service providers worldwide on using the web for disclosure, engagement and profile building. You can contact him via the contacts page.
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