Benefits of a Perception Study

April 2016

Sometimes even the most carefully crafted messages may be misunderstood or lost in translation. A perception study can help bridge any communications gaps and possible misperceptions of your company. When you go directly to your key stakeholders and ask them what they think about your company’s investment story and the quality of your IR communications, you can confirm whether your IR program and messaging is effective or if a different strategy is needed.

Does Wall Street think we will be profitable in 2016?

Does management instill trust and exude confidence in the future?

What are the main metrics the Street is monitoring to gauge whether the company is executing?

Many companies execute yearly comprehensive perception audits as well as smaller audits to gauge investor sentiment or to obtain specific feedback on important events such as earnings, analyst days, and M&A.

There are a number of reasons why a company should consider conducting a perception study.

To pinpoint issues or misperceptions that may be impacting valuation or overall perception. A customized perception study can hone in on key issues that may impact your valuation and cause misperceptions of your company, while also providing tangible solutions to remedy the problem.

To demonstrate proactive IR. A study demonstrates to Wall Street that the company is open to hearing feedback, improving its communications and sharing unbiased investor sentiment with its board and management team.

To assess vulnerability to activism. If you feel like your company may be susceptible to activism, a perception audit is one action you can take to make sure you clearly understand the root of negative investor sentiment and the company deficiencies that drive it.

To create a framework for benchmarking your program so you can evaluate your progress. If a study is conducted on an ongoing basis and in the same framework, the company can clearly see the evolution of the investor relations department’s progress.

To foster ongoing communication between IROs and the board and C-suite. Many best-in-class companies execute a yearly study to improve communications with the board. A comprehensive and independent perception audit can ensure the board hears objective feedback from key influencers.  

We believe it is imperative to customize the questions when conducting a perception audit; that way, the report can specifically address issues that may be impacting the company’s valuation. Additionally, the best way to gather this information is through one-on-one conversations between senior IR practitioners and key Wall Street stakeholders. With senior expertise guiding the conversation, you can go beyond simple "yes" or "no" responses and dig deeply to find answers that lead to actionable remedies – remedies that can help unlock the company’s value.

Gathering independent, comprehensive, and insightful feedback is invaluable in determining how Wall Street absorbs your messaging.  Our perception studies help companies hone messaging and lead to actionable recommendations on what can be improved. For more information on how a perception study can help your company, please feel to contact us.