The Cost of Not Replying

19 February 2008

In leafing through the November 2007 edition of IR Magazine (I’m trying to catch up on some reading) IReply noticed a small piece on how IR is neglecting investor emails.

In the study, a staged investor email inquiry was sent out to all companies on the FTSE 100.  Only 53 companies replied within three weeks!

Shocking, isn’t it?

Rightly or wrongly, many Investor Relations Officers (IROs) look at emails from retail shareholders as a pain in the neck.  Regardless, response times to email inquiries (retail or otherwise) should be measured in hours, not days, and certainly not weeks.

Don’t look at the email as a waste of your time.  Look at the response to the email as protecting your company’s (and your IR department’s) reputation.  Before ignoring that email inquiry ask yourself a few of the following questions:

1) What if this emailer happens to own 100,000 shares of my company?
2) If I don’t respond, how many people will the emailer tell about their negative experience?
3) If I do respond, how many people will the gracious emailer tell about their positive experience?
4) What if this emailer is a personal friend of the CEO of my company and was referred to me by that CEO?

You just never know, do you?

It should go without saying, but I will say it anyway.  Every email inquiry to your IR department requires a response.  If you don’t do it as a means of providing good service to your shareholders, do it as a means of protecting your reputation.

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