Packaging matters. That is why all books (at least to some extent) are judged by their cover. How a company packages itself, from the quality of their visuals to the quality of their events, will determine how the market perceives them. So much so, that well designed and executed visuals and events can immediately turnaround the market’s perception of a company. They allow a company to leave investors with the perception that the company is more professional, relevant, competent, and mature than their competitors. Perception is reality. If you want your company to punch above its weight in valuation, you need to take the quality of your visual tools and events seriously.
Compelling Communication
The market tends to ignore companies that neglect to package their story in a compelling manner. As a result, these companies languish due to a lack of attention. That is why step 2 of the Premium Valuation Framework leverages compelling communication tools to focus investor attention. Compelling communication uses powerful visuals across all investor communications to drive increased share of mind, recall, and positive intent. Companies should also leverage prezi, video, animation, and infographics where appropriate. Finally, the most important element of compelling communication is the launch of a company’s five-year strategy.
Investor Presentations & Quarterly Webcasts
Companies that are delivering quarterly conference calls without visual aids are missing a key opportunity to engage the market. The investor presentation and quarterly webcast are the best place to start providing simple and powerful visual content. This will help augment investor understanding of the company’s business and performance. However, the use of these mediums can also backfire. Poorly designed visuals and presentations can also damage market understanding and credibility. PowerPoint slides with a bunch of bullets in 20 pt font are not going to drive shareholder value.
There are plenty of resources available on how to design presentations. The resources below can help authors to design compelling slides that deliver key messages efficiently through consistent informational landscapes:
Advanced Visual Tools
In the hierarchy of communication tools, writing is somewhere near the bottom. Our minds are not evolved to read and quickly fatigue. A poorly designed PowerPoint presentation isn’t much better. Why limit yourself to these tools? Never before have companies had such affordable access to media technologies such as Prezi, video, animations and infographics. These platforms give companies unprecedented abilities to rapidly communicate their message with high impact.
visuals in reporting
As mentioned above, the human mind is not evolved to efficiently absorb written information. Companies have long known that graphs incorporated into a company’s reporting are a powerful way to deliver performance information rapidly. Historically, performance graphs have primarily been incorporated into annual reports due to the time it takes for production and typesetting. Now, however, reporting technologies like Workiva can effortlessly incorporate graphs in the company’s regular quarterly reporting.
Avoid the Cliche
Investors, by their very nature, are cynical beasts. Using cliche visuals will only harm your company’s credibility. Your visuals must be meaningful and grounded in reality. So never use a cartoon illustration of a hockey stick stock chart pointing straight up in any presentation. Analysts will laugh at you. Investors will laugh at you. We will laugh at you. Everyone will laugh at you. And your credibility will take a hit.
The Five-Year Plan
The five-year strategy launch can be one of the most compelling communication tools available to companies. When properly executed, a clearly articulated five-year plan can have tremendous impact. It is also the best defence that management can deploy against a discounted share price, shareholder activism, and predators. Launch the strategy through a high quality investor event in one of North America’s investment centers. For those on the buy-side and sell-side that can’t be there, ensure that you webcast the launch with accompanying visuals. Commit to holding an investor/analyst day once a year to update the capital markets on your progress against the plan.
Conclusion
Companies that package their story using powerful visuals, engaging media and clear language enhance shareholder value by increasing investor attention, awareness and understanding. Conversely, companies that fail to package their story properly will almost always trade at a discount.