Best Practices for Communicating with Shareholders
You pride yourself on being easy to do business with your clients. You should do the same with your investors. Most investors are older than most entrepreneurs (it takes a while to build up that capital). Investors don't all use the same software (and won't start no matter how hard you try to make them.)
If they can't read your reports it will just upset them (not your desired response.)
To communicate effectively with all of your investors, you should:
1. Personalize your e-mails - we all receive too many e-mails. The first thing most of us look at, with our finger hovering over the 'delete key' is who sent the e-mail. Yours must come from you as CEO. It's you that your investors have the primary relationship with. Never send From: firstname.lastname@example.org or any other generic address or any other individuals' address. You should also address the e-mail To: the first name of your shareholder. Sending to "Dear shareholder" makes you look like technologically inadequate - or worse - slightly rude. /p>
2. Send your reports as a multipart e-mail - including both HTML and Text versions. (Yes, some people still have text based e-mail clients, but even more have old Blackberries which will display text, but not HTML.) The subject line should be exactly the same as the filename below (possibly without the underscores.) The text version must include a link to the web version.
3. Format for Readability on a Blackberry or PDA
Reg Nordman quotes Marketing Sherpa's 2007 report which stated that 80% of decision makers read email on a PDA. It's probably even higher for investors. Its absolutely essential that your shareholder communications are properly formatted for Blackberries, Pocket PCs and similar devices. If you don't have the HTML skills to do this in house, then outsource to companies like MeteorBytes who know how to send highly readable content to small devices.
4. Post your reports on a website with a link at the top of your e-mail. Some investors have really old e-mail clients that do not properly display HTML. You should also archive these on your website probably behind an investor-only password.
5. Attach your report to the e-mail. It is essential that you also attach your reports to the e-mail in PDF, or possibly Word, format. Many investors will want to save your reports on their hard drive for future reference. They may also try to read your report while they are offline, for example on a plane or in a meeting. Always ensure the links in the PDF and Word versions are clickable.
Please always use the standard file naming convention for these reports so they sort properly in the operating system, for example:
If the files contain financial, or other, data that is for a specific date, for example, a month end like December 31, 2005. The file name must end with the month end date, for example 20051231, not the date you sent the report.
The company name above should be one word in most cases. If that is not self explanatory, use two. The underscores are important because lots of webservers use Linux or Unix.
6. Include an Unsubscribe Link - some investors will prefer to pull the information from your website rather than have you push it to their inbox. To keep them happy, your e-mails should also include a convenient unsubscribe link.
7. Build in tracking - its a good practice to build tracking into your shareholder communications. One benefit is to give you comfort that your investors are actually receiving your communications. Increasingly today, people are changing their e-mail addresses and deploying more and more aggressive spam filtering - both at the desktop and corporate level. If an investor hasn't opened, or clicked-through, on any of your recent e-mails, its a good idea to give them a call to find out why you are not communicating. Being proactive is essential - investors might otherwise wait until they are upset before calling you or even worse, just give up on you.
8. Include with the board package. All of the monthly shareholder reports since your last board meeting should also be included in the every board package - regardless of whether you have already sent them to that director because they are also a shareholder.
Note: This information applies only to private companies. Everything described above applies to all companies, but public companies are also subject to very specific rules on disclosure.