Why you should benchmark engagement, and how to do it.

I first wrote about benchmarking engagement back in 2023, focusing heavily on liquidity. Specifically, I was interested in how you can leverage liquidity to boost your market cap, attract institutional investors, or simply make your company more appealing.

Over the last 18 months, we’ve dug deeper into the leading indicators of shareholder engagement, and today I will share what "great" looks like for those indicators.

First, let’s establish a central premise: good investor engagement is a leading indicator of high shareholder conviction.

How do I know this?

For starters, it’s logical. Most investors are time poor. A typical investor can have 20-30 holdings and only spend 2-3 hours a week on their investments - that is 6 minutes a week on average. 

Good engagement increases the share of time.

Larger share of time increases conviction.

Higher conviction means higher share of wallet.

The team also analysed more than 1,000 online interactions with investors. 47% of all interactions were positive, with only 3% being negative - the balance neutral.

47 v 3 are great odds to have!

So, to reiterate: investor engagement is a leading indicator of conviction. The more investors you engage, the more you build conviction.

In addition, we know that communities operate on a 90-9-1 rule. 90% of people are passive, 9% contribute a little, and 1% contribute a lot.

Which means that if you operate an open community, the actual impact is 10x what you can see, as only 10% of the members are actively contributing.

So, what are the targets for investor engagement?

Broadly, there are three categories of investor engagement that I know are reliable indicators: reach, signups, and active engagement. Let’s break them down and look at benchmarks for best practice.

1) Reach.

Let’s assume that 10% of all people who look at investing in you end up investing. If this conversion rate stays constant, then increasing the number of people looking will increase the number of people buying - increasing your reach.

We track reach as the sum of your investor centre views, email engagement, and announcement views.

An increase in unique views means more, different, people are viewing.

An increase in total views, but a constant in unique views, means your audience is engaging more often and raising their conviction.

Reach benchmarks: Top 5% of market reach

• Total views per month: 10,550
• Unique views per month: 6,500

2) Signups/emails.

Emails are future buyers. Investors with an email address are 3x more likely to buy again than those without. Growing this list is key - as is engaging it. It adds up over time even if it is slower to start.

Signup benchmark: Top 5% of email acquisition

• Emails per month: 57

3) Active engagement.

“Active engagement” is broad, encompassing everything from email clicks to webinar attendance or announcement downloads. Most companies have a basic digital shareholder engagement structure, so email clicks are the most universal measure.

Our data, however, is based on more advanced metrics like questions asked via interactive hubs. As a proxy for engagement, there’s no better leading indicator than investors asking questions online. Since most companies don't have this metric, I have also included email clicks per month as an indicator of engagement.

Active engagement benchmark: Top 5%

• Questions per month: 11
• Emails clicked per month: 1,520

Note: These are averages across our whole portfolio. If you want specific benchmark metrics hit reply and I can send them to you for your company.

Strategies to enhance engagement.

Frequent communication: Regular updates keep your company top of mind, just as constant advertising does for consumer brands.

Direct access: Providing direct access to your team via webinars or Q&A sessions not only differentiates you from third-party information providers but also positions you as the primary source of credible information.

Remember, you have you: Third parties regurgitate your results, but only you have total access to management. Leverage that access - put your team front and centre - and drive engagement.

Let’s set some goals.

Well actually, first let’s work out what your starting numbers are. 

And let’s start with email - because it is so important. How fast is your email list growing? Do you have that somewhere? Who can you ask? Where is it?