In the third of four blogs on investor relations challenges, we explore cost efficiency. How can you make sure your investor relations activity is cost-effective and delivers return on investment?
Cost-efficient solutions – more important than ever
The coronavirus pandemic sparked a global economic shock that has left every company reining in their costs. Investor relations budgets haven’t escaped this pressure, dropping by an average of 16% during 2020 – and while COVID-19 may have accelerated this, it’s a trend that has been evident for some time. IR Magazine reports that investor relations budgets have decreased by a third in the last five years.
Against this cost-conscious background, many firms are exploring ways to make their investor relations activity more cost-efficient. It’s not surprising that many have embraced virtual investor roadshows.
Virtual roadshows; a cost-effective alternative
A virtual data room offers a cost-effective alternative to in-person presentations – which demand not just significant direct costs, in terms of travel, accommodation and venues, but indirect costs in terms of the administrative resource needed to organise flights and itineraries, and the travelling time of your senior management teams.
Reduce your company’s carbon footprint
There’s also the sustainability issue. Many companies are trying to reduce their carbon footprints as part of a wider ESG strategy. Climate change is increasingly important to investors and investment managers, with nearly nine in 10 investors beginning to move their capital to ‘greener’ investments.
Cutting air travel and reducing printing are just two of the ways companies are trying to improve their environmental impact.
Virtual roadshows are another easy win to add to the list. Long trips to the world’s financial capitals are often not among executives’ or IR teams’ favourite parts of their role, so you’ll earn plaudits for removing them from their schedule.
Ensure COVID-19 doesn’t impact your investment plans
As COVID-19 restrictions rumble on, the uncertainty of international travel means trips can’t be booked with any confidence they will go ahead as planned. And with health experts warning we may need to live with the virus for years to come, the risk of sending senior executives around the world to meet investors needs to be carefully weighed against the benefits.
This is particularly true when you consider the way attitudes towards investment have changed since the pandemic and the ubiquity of remote working. Prior to the coronavirus pandemic, fund managers were often reluctant to put money into companies without first meeting their management teams.
Today, as virtual meetings have become the norm and Zoom meetings second nature, many have grown comfortable with making investment decisions based on virtual roadshows and online meetings.
Furthermore, virtual roadshows allow for far larger attendances and therefore generate more investment opportunities.
Embrace virtual investor roadshows for a more cost-efficient approach
Compared to their real-life alternative, virtual roadshows enable companies to get far more value from their IR spend – as well as offering benefits around efficiency and ESG. That cost/benefit analysis is likely to become more, not less, compelling in future.
Engage is Perivan’s market-leading data room, offering a secure, insight-rich solution to cost-efficient investor relations and enabling your company to win investment in a virtual world.
Find out more about how Engage can provide the solution to your 21st century investor relations challenges.
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