I recently
had cause to pause and reflect on the intersection of Investor Relations and
Customer Relations. More than anything else that helped me interrogate these
sets is the customer relations practices of the world’s largest coffee company
Starbucks.
Looking at
Starbucks gave me a sense that, at the primal level, IR has got a lot to learn
from Customer Relations., ‘Relations’, the common suffix to our subjects,
suggests that they are only branches of the same tree. Their DNAs are
essentially, the same.
Over the
years, the Seattle, Washington based global company has grown from a humble six
store chain in the 1980s to “ the largest coffeehouse company in the world,
with 21,160 stores in 63 countries and territories, including 12,067 in the
United States, 1,570 in China, 1,451 in Canada, 1,070 in Japan and 793 in the
United Kingdom.
In 2014, Starbucks' revenue amounted to
approximately 16.45 billion U.S. dollars, up from 14.9 billion dollars the
previous year.
Author
Charles Duhigg hints at one reason for the Coffee behemoth’s success-LATTE.
No! He was
not talking about that delicious blend of coffee made of espresso and steamed
milk of similar reference. You would be forgiven for broaching that thought,
though.
LATTE is
acronym for a customer relations strategy developed by Starbucks which stands
for:
- Listen to the customer,
- Acknowledge their complain,
- Take action,
- Thank them and
- Explain why.
If your
investors really matter, LISTEN to them! After all, one explanation of the
reason for the existence of the corporation is to maximise the value of
shareholders. And who are the shareholders? Investors!
IR people
have AGMs as unique opportunities to listen to the shareholder especially the
minority shareholder. There are cases in Nigeria where AGMs are held in
hard-to-reach places just to get the pesky shareholders off their back.
The next
logical step would be to acknowledge their suggestions towards the improvement
of the company. It doesn’t necessarily mean that you are going to implement
what they say. The job of crafting and executing strategy belongs to the board
and management.
I have seen
cases where the board decides in advance who gets to talk and on what to talk
about. The various shareholders associations have sold out on this one. While
the compromised Association members sing the praise of management, those with
genuine concern seethe in the background.
If the
suggestion of the shareholder is worth using, by all means use it!
Thank them
for their time, effort and money both for attending the shareholder meeting and
for considering putting their money in your company instead of the competition.
Many
investors get curious why your company pursues a certain strategy instead of
the available alternatives. Please explain why you have to do that.
While I
have specifically mentioned the AGM as a platform for engaging the investor, it
is by no means the Holy Grail. Indeed to wait for the AGM which comes but once
in a year is a recipe for disaster in an Omni channel world.
Investors
like customers take-on companies via social media, throwing jabs, and
sometimes, below the belt, at every opportunity.
IR pros
should be ready to engage investors online by practically responding to their
queries and in real time. GT Bank is attempting something in that line but
there seems to be a dysfunction between IR and the social media guys. That is a discussion for another day.
In the
meantime, please sit back and enjoy your latte.
References:
Duhigg, C (2012).
The Power of Habit: Why we do what we do in life and business. New York: Random
House.
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