LET’S just assume that the Alexa trends I reported earlier this week are reasonably accurate and investors are deserting cookie-cutter IR websites in droves.
That might not be such a stretch given that no one has stepped forward to dispute Alexa’s numbers with their own figures.
If it is true, and I personally can’t imagine why investors would bother with many IR websites I’ve seen, what do companies have to do to reverse the trend?
Here are two ideas:
1.) Acknowledge the problem.
For me, the only surprising thing about the slump in traffic to U.S. IR websites is that some people are surprised. Perhaps our work researching IR website practices has made us take too much for granted, but we honestly thought people knew there was a problem.
There are many reasons investors might not want to bother with typical U.S. IR websites. One is that investors in American companies can get most of what they need elsewhere. They don’t need a corporate IR website most of the time, and they never will. They have Bloomberg or Yahoo! Finance or their broker for most of what they need.
But when they do need your site, that’s when you have to be sure you are delivering what they’re looking for. And that’s where companies are failing. In fact, most U.S. companies do a great job delivering what investors don’t really want, and a really poor job delivering what they would use if it was offered.
Why would anyone visit your site for a stock quote when they can get quotes for their entire portfolio on a single screen? Why would they use your webcast (registration required) when they can pick up the transcript free from Seeking Alpha? Why would they use fundamental financial data on just your company from Thomson when they can get the same data on hundreds of companies from a single source?
And why would they bother using your site when the average disclosure document is as dense as a PhD dissertation and presented in a PDF blob or image-based document that spies on them without their consent?
So IR websites aren’t delivering what investors are looking for. But that’s not all.
What investors are looking for has changed too. People, especially a younger generation of investors and analysts, are looking for something different than they’re getting from companies. Yet companies are still droning on in that dull and insincere corporate monotone that looks and smells and sounds like an over-lawyered Form 10-K.
Disclosures are longer, less pointed, and often filled with superfluous detail. There’s too much compliance and not enough communication. Blame the regulators if you want to, but there’s nothing in securities laws that outlaws good, transparent, sincere communication.
2.) Take control.
If there is one common denominator among the people who are our clients it’s that they are in control of their sites. They call the shots on their sites and they want lots of different ideas and insights. Many of them use Thomson and Shareholder.com, but they don’t let their vendors make decisions for them. What those vendors provide is mostly a content management system and support, but our clients do the thinking and the management. They’re engaged.
The unfortunate reality is that most companies have not only outsourced the content management systems for their sites, but they have also offloaded the strategic thinking to firms that aren’t up to the task. It’s impossible for the the big IR website vendors to understand your company’s story as well as you do. The best they can do is give you tools to do it yourself. So it’s unreasonable to expect Thomson or Shareholder with their 3,000 combined clients to tell each company’s story in a unique way. They can’t do it. That’s the IRO’s job.
Yet many IR departments don’t even look at their sites. That’s honestly no exaggeration. Right now, I’m thinking of a big financial services company that still includes as one of its benchmark peers a company that has not existed for three years. Actually, on Sunday it will be precisely three years since the peer company ceased to exist as a separate entity. Yet, there it is, in the financial services company’s stock chart, which obviously doesn’t work anymore. What’s worse is that some bright sparks recently recognized the company for an award — for its IR website! (Awards, that’s another story that we don’t have time for right now, but perhaps another day.)
So how do you take control? It’s not going to be easy because a lot of companies have let things slide for so long that it’s going to be a struggle to win investors back. There’s also likely to be some push-back from management when IR departments ask for additional resources they’ve so far managed to do without (and are now paying the price for). But remember that using the Web properly saves money because it cuts printing and mailing costs, while at the same time reducing waste and environmental harm.
Now here’s the really unpopular message I have to deliver. Online IR needs to be reinvented. You’re going to have to be more responsive and creative. You’re going to have to cede some control to your investors and other website users. I’ve touched on this in 10 steps to a better IR website and in Why blog network’s “open CEO interviews” are a hit.
Anyway, this post is already too long so let me end it here for now. If you have anything to say on the topic, commenting is open.