ZOOM INTO THE FUTURE: REVOLUTIONIZE YOUR INVESTOR RELATIONS STRATEGY WITH VIDEO EARNINGS CALLS
COVID-19 has dramatically impacted every aspect of the way we work and communicate. So, why haven’t our investor relations efforts evolved with the changing corporate landscape? Companies are still relying on the old dry, habitual earnings conference call. A quarterly routine that is prescribed with a rigid structure consisting of opening remarks, regurgitation of the MD&A, and a question-and-answer session.
Zoom revolutionized the "meeting", but why have quarterly earnings conference calls failed to evolve?
The Script
It's hard to let go of the script. CEOs and CFOs have been reading from scripts for decades, and old habits die hard. However, after COVID-19 forced us to rethink the way we communicate, dialing in to a traditional conference call just doesn’t cut it anymore.
However, Zoom (or any alternative virtual offering) is only effective when you look directly into the camera. Head down focused on a piece of paper or eyes darting across the screen as a subtle attempt to make eye contact while reading from a script does not amass the same impact.
The Solution
Lose the script. Time is precious for management, the board, investors, and everyone else involved in the production. Instead of reciting the same information that’s already been released, you should be thinking about how you can transform your earnings calls to drive real engagement with investors and instill confidence in your company’s direction.
By the time draft 19 is finalized, just 15 minutes before the earnings call goes live, dozens of hours have been poured into drafting the script for the CEO and CFO in an attempt not to repeat verbatim the MD&A and press release. Trying to hold an engaging conversation while avoiding any statements or facts that are not already stated in public disclosures is a fine art (and a nightmare) for every investor relations professional.
The Formula
There is good news for CEOs and CFOs who have gotten used to the safety of the traditional conference call. If we have learned anything from the past year, it’s that just because you are on camera doesn’t mean you need to wear pants.
All kidding aside, you should be treating your earnings call as a chance to increase investor engagement in a meaningful way. Showing the CEO and CFO on camera builds trust with investors, communicates confidence, and allows them to enhance their message with non-verbal cues.
The ideal flow of a rejuvenated earnings call is brief opening remarks from the CEO followed by a question & answer session. There is no shame in indicating to the market "We are not going to repeat what is covered off in our disclosures. We are here to respect your time and answer any questions you may have." Like the traditional conference call, analysts can enter the queue and articulate their questions out loud once admitted into the webcast.
Ditching the script can be especially important for small companies or startups where a crucial component of investor relations is taking time to communicate the company’s story. Instilling confidence and exciting the market by communicating where you are headed and how you will get there is vital. Larger companies in stable industries typically see less flux in market conditions from quarter to quarter.
Results
Our clients who are shifting their investor relations strategy to include on-camera earnings calls are seeing great results in the form of happy analysts and investors. For analysts, who might be attending several earnings calls a day, skipping the regurgitation of the information that is already publicly available is a huge time saver. Investors also enjoy the time savings as well as more direct communication and better access to the leadership team.
