Although Twitter and Facebook and their ilk have been influencing consumers and voters for years, investors have proven to be slower adopters of social media.
But that’s changing.
According to the Brunswick Group’s survey: Trends in the use of Digital & Social Media by the Investment Community, the use of social media platforms to investigate companies and make investment decisions is way up. The research group queried 500 investment professionals from Europe, Asia and North America in a wide variety of sectors and found the following:
30% of investors use Twitter to help investigate companies.
86% of investors say online sources like blogs and social media have become more important this year with investors.
56% of investors report the influence of digital and social media is increasing in their investment decision process.
24% of investors report making an investment decision after sourcing information from blogs.
61% of US investors have been prompted to investigate an issue further after reading about it in a blog post.
Investor reliance on digital media to gather information has doubled since 2010.
Investors are actively contributing investment information via social media.
While investors aren’t making actual stock purchasing decisions based on Twitter, they are using information they find there as a starting point to build their own personal portraits of companies they are looking to invest in, according to Jason Golz, Director of Brunswick Group’s San Francisco office.
It’s not just the information that is shared via platforms like Twitter and LinkedIn that attracts investors to them, but also the interactivity. If potential investors have a question about a company, they can just ask it on Twitter or in a blog’s comments section rather than having to go through the usual rigmarole of trying to contact a company.
So, how do you leverage these to your advantage?
1. Start with the basics
Remember that it is quality and not quantity that you are after.
Before you can tell the world about how wonderful your company is, you have to have the best possible corporate narrative and product narratives in place and be able to answer the question; How do we do what we do better than anyone else in the world?
Every new social media tool that comes out is merely a new communication channel that your organization can use to get its message out. But those messages have to be the best they can be first.
If a company’s traditional messages are not well prepared, putting that info out onto the web is just going to amplify how poorly prepared they are.
2. Have a digital and social media policy and strategy in place.
If your company doesn’t have a social media policy and strategy in place, you’re at the very least five years behind where you should be and it’s probably more like eight years.
This policy should address:
what platforms you choose to use
what message you want to send
who is authorized to use these platforms on behalf of the company
how you should engage people on platforms like Twitter or on their own personal blogs (for example, should you send a tweet back or write something in their comments section or just ignore it)
whether you should be proactive or reactive in engaging people.
And start small. Any discernible effort on your part is going to be appreciated by potential and current investors. Try sending out just a tweet per day and grow from there.
There is no template to follow.
3. Invest in your own website.
Although investors visit a wide variety of sources to get information on a company, the number one place they visit is a company’s own website.
So invest in your company’s online storefront. Replace your dusty old FAQ section that nobody reads with a Hot Topics section where people can visit to see what is really shaking in your company. What are hot topics? Whatever people are talking about in your company. If your CEO or CFO does a conference call and a key phrase keeps popping up over and over again, that’s obviously a hot topic.
And don’t forget your company’s blog. You can easily turn those hot topics into blog posts or whittle down the content of the aforementioned conference call into something legible to post to your blog. (Just don’t let your blog die. The internet is littered with defunct blogs and there is no sadder site than a blog that hasn’t been updated in years. Defunct blogs are the neglected pooches of the internet and should be euthanized accordingly.)
According to the Brunswick Group’s survey, face time with a company CEO is the top way investors like to get information from a company. Obviously your CEO cannot talk to all investors one on one, but he can sit in front of a webcam and make a statement once or twice per month.
4. Ensure your messages have substance
Many press releases and other messages that are spewed forth nowadays are pretty frivolous. Your company might be thrilled that it saw record revenue for a given quarter, but investors are more interested in how that happened (and if it will continue to happen).
If you don’t give investors robust messages, they’ll go find their information elsewhere, from places that you have little to no control over (other people’s blogs, etc). So give them something they can chew on and skip the frivolous stuff.
5. Monitor what is being said about your company and know how to react to it when necessary
Set up alerts for your company name so you can monitor what is being said about it. And react to it in a way that is consistent with your social media policy. (That’s why you had the policy written.)
While it is fairly safe to sit back and just monitor the positive stuff that is being said, handling the negative comments will depend on whether or not it is being said by a key influencer in your sector. Key influencers are easy to identify because they’ll be the ones with thousands of Twitter followers and tons of engagement on their blogs. (One of those Twitter followers is probably you.)
If you find that a blog author or journalist etc. has printed some misinformation about your company or said something negative that you believe wasn’t warranted or deserves a reply, you’ll have to tread carefully. The internet can go from pleasant hang out spot to gladiatorial pit in the blink of an eye. And bloggers aren’t above taking things out of personal correspondence and using it on their blogs, either, so keep in mind that anything you send, even a private email, might end up on public display. So choose your words accordingly.
However, even the most negative of comments can simply be ignored if the blogger making them has almost zero traffic and his or her Twitter followers list is close to empty. If that’s the case, you might inadvertently draw attention to the negative comments where there wouldn’t have been any before.
With some careful preparation and a solid policy in place, your company will be a social media star in no time, and your investors and potential investors will thank you for it.
A former journalist, Rob has been writing professionally since 2006 and now focuses on copy writing, website content, articles, blogging, ghost writing, editing, proofreading and public relations.
Currently an Athabasca University student studying for a BA in Communications, Rob holds a Journalism Diploma from Langara College in Vancouver.