The Investor Journey

The customer journey is well understood by marketing experts today. It is understood as a journey of the customer to the product / service of the company. The journey leads along direct contact points such as advertisements, commercials and websites, but also indirect contact points such as third party opinions in rating portals, user forums, blogs, etc. An in-depth understanding of the entire customer journey is a basic requirement for a customer-oriented marketing and sales approach.

What does this have to do with investor relations? There is a trip comparable to the Customer Journey: The investor’s journey to the stock: The Investor Journey. Like the Customer Journey, the Investor Journey is a journey of discoveries and decisions. From direct and indirect contact points to the company and the share. Of emotions and facts.

The stages of a  Customer/Investor Journey

The Customer Journey is divided into 5 phases and can be transferred to the Investor Journey:

  1. Awareness: The awareness of the product is awakened. In the case of an investor journey, this can be achieved by means of a roadshow, conference participation or direct investor targeting.

  2. Favorability: The interest in the product is increased within the framework of the Customer Journey: For the Investor Journey this means: The detailed investment criteria of the investors should – if not already done – be analyzed and worked out. These criteria should be specifically pointed out in the communication with the investor in order to increase interest in the company. The investors’ investment criteria vary greatly and go far beyond the usual focus on company size / industry / region / growth / value. Possible criteria on which investors can place value are market power, pricing power, capital requirements, stable sales, stable profits, stable operating margins, low PEG, high ROE/ROA, transparent accounting, opportunities for sustainable growth, competitive position, growth and growth prospects of the market etc. From the IR point of view, it is therefore important to know the interests of the desired investors in detail. This requires first of all a determination of the target investors within the framework of investor targeting and then an analysis of the investment focus beyond company size / industry / region. Information providers such as Thomson Reuters or Bloomberg offer appropriate tools to perform such analyses.

  3. Consideration: The customer considers the purchase of the product within the Customer Journey: In connection with the Investor Journey this means: Early contact points, also known as “Early Stage Touchpoints”, are important to encourage the investor in his plan. In this context, the “early contact points” differ from “later contact points”. At the beginning of his Investor Journey it is all about building trust in the company and the industry, assessing the management and the company’s goals. If these assessments are positive, the investor will decide to invest more time in further analysis.

  4. Intent to Purchase: In the Customer Journey, the intention to buy is now becoming more and more concrete. Within the framework of the Investor Journey, his interests are now changing. It is now about the “later contact points”. As with the “early contact points”, these interests can vary greatly from investor to investor. For example, more information on financial aspects, share prices, charts, detailed analyses, but in the context of the boom in ESG issues, there may also be inquiries about sustainability issues, corporate governance issues, risk aspects, social issues, etc.

  5.  Conversion: While the Customer Journey usually ends with the purchase of the product, the Investor Journey is transformed into a relationship management: The aim is to convince the investor to increase or, in the best case, to hold his share position.

Now it is basically a challenge to meet all 5 phases of the investor journey on the IR side: Analyses of investor preferences must be prepared, roadshows must be held, conferences must be held. Documents must be prepared according to the preferences of the investors. Management must be positioned on the capital market. Both the “early contact points” and the “later contact points” must be kept up to date and adapted to the changing needs of investors.

All this is hardly manageable without an IR marketing strategy. Ideally, the requirements of the “Investor Journey” are a part of investor targeting and are taken into account in the development of the IR strategy.

Investor Journey – Investor Targeting – IR-Strategy

Components of a classic IR strategy are the analysis, the definition of objectives and target categories, the definition of IR instruments, the determination of KPIs and operational targets as well as measurement instruments.

Within the framework of the analysis, it makes sense not only to carry out a classic perception study with the target group of existing investors. Rather, the investment behaviour of “desired investors” should also be included in the analysis process. Based on these results, it is then possible to determine which goals and target categories should be set. If, for example, the analysis shows that many “target investors” attach importance to potential sustainable corporate growth, the aim may be to strengthen communication with regard to this aspect (shareholder value reporting, focus on growth drivers). IR instruments may then be defined as including growth drivers and their detailed explanation in reporting and company presentations. One possible KPI could be the number of “desired investors” meetings with investors who attach particular importance to growth prospects and an operational goal would be, for example, “at least 10 meetings with “desired investors” who attribute particular importance to growth”. 

In summary, the following can be stated: The Investor Journey concept helps the IRO to better understand the decision-making process of investors. This knowledge should be incorporated into the development of the IR strategy in order to carry out targeted investor targeting.