Tough Market Offers Sound Opportunities

Savvy companies will take advantage of the tough times by taking communications and marketing to the financial community as seriously as marketing their products or services.

A strategically designed and implemented investor relations and financial communications program can help your company survive -- and possibly thrive -- in tough times.

What public firms can do

While it's undoubtedly depressing to look at recent stock charts, public technology companies should not hide in the sand and go quiet during tough times.

Communication is more critical than ever, and how a company handles a revenue shortfall or earnings miss may be as important as the results themselves.

It's imperative that senior management implement a solid long-term plan and identify for Wall Street the "proof points" that will offer evidence that the company is making progress.

A difficult market with a slow IPO climate also presents opportunities for companies that wish to maintain their credibility and are willing to market themselves to the financial community.

Companies should undertake a variety of initiatives including meeting with sell-side analysts covering the peer group, hitting the road and seeing the buy-side (both current holders and new targets), and designing creative opportunities to sell the company to Wall Street.

In a down market, for example, analysts have time to meet with new companies and do better research by also meeting with peers and customers, and by doing channel checks.

Be creative and find new opportunities to sell the company story to Wall Street.

From inviting an analyst to spend the day at the company to mid-quarter webcast updates -- any opportunity to explain the story to a new audience can be beneficial.

These efforts may not be immediately rewarded in terms of stock price, but will help investors understand how the company is positioned and why it will be not just a survivor, but a long-term winner.

Thoughts for private firms

Not so long ago every private company in Silicon Valley was gearing up for an IPO. While that outlook has certainly changed, the things that a company should be doing to achieve its goals -- whether the exit strategy is an IPO or M&A -- have not.

Historically, there has been little need for investor relations expertise before a public offering. But things have changed. Early attention from analysts, bankers and the business press has never been more important.

Sell-side analysts often include private companies in their sector reports and bankers invite private companies to speak at investment conferences.

A key story in a leading business publication can jump the company to prominence.

Private companies also can take advantage of a slow IPO environment.

Bankers and financial analysts have more time to meet and cultivate relationships with early stage companies. Business reporters also have slightly more time to learn about private companies these days, although given the skeptical nature of the business press, companies must make sure they have hard news and a rock-solid story before approaching a reporter.

Think about the company's objectives in the next 12 months. If you anticipate financial situations that will require a communications effort then think about working with a team to hone the corporate presentation that targets your respective audience, be they bankers, analysts or reporters.