Doing more with retail investors, with less

Doing more with retail investors, with less

Two questions come up more than any others in our conversations with UK listed companies. How do we do more with retail investors? And how do we do more with less?
The two are connected. Retail investors are becoming an important part of every IR programme, and budgets are tighter. The companies doing this well have three things in common: they own their investor data, they focus on existing shareholders, and they communicate directly.

Retail investors have changed

For smaller listed companies, retail investors are the marginal buyers and sellers. They are the liquidity. They are also for the most part self-directed now. They are not picking up the phone to a broker. They are logging onto a platform and figuring it out themselves.
They are not short-term either. In our research with ShareSoc, 84% of private shareholders hold their positions for three years or more, and 42% invest between £10,000 and £50,000 per position.

Most companies don't know who they are

Because retail investors are self-directed, almost everything they do is digital and leaves a footprint. The data exists. It usually sits with an intermediary, not with the company. It is not a given that a company knows who all of its investors are, or that it is able to contact them.

Owning your investor audience

First-party investor data is what a company would expect to know about a customer, applied to its investors: who they are, how to reach them and what they engage with. When that data sits with the company, a direct relationship becomes possible.

Existing shareholders first, and direct

In markets like these, retail investors generally put new money into companies they already own. Existing shareholders are also asking to hear more. In our research, roughly four in five want to hear from their companies at least quarterly, and nearly two thirds say an annual webinar is not sufficient.
Direct communication means the right message for the right audience. Existing shareholders want to know how the company is going and what is coming next. New investors need to learn about the business and the market it operates in.

Engagement you can measure

Once a company owns its data, it can see who received an update, who engaged with it and how its register is changing. Engagement has always mattered. Now it can be measured.