Talking to IROs about audio conferencing can be a bit like pulling teeth. They don’t care – or know – much about the process behind it and even less about the technological features available to them. What they do know, however, is that they want their conference calls to be free of glitches and the sort of embarrassing mistakes that are commonly associated with live events of this kind.
Companies might be competing for the opinions of analysts who are listening to 20 other audio conferences in the same week, so it is essential they present an image of competency to their investors and all other stakeholders within a short period of time.
For the vast majority, technological features and price-competitiveness are not decisive factors when it comes to choosing a preferred conferencing provider, and many are willing to pay a premium to ensure a better quality service.
Handholding
Good service providers will simplify the process behind a major conference call, mostly on the planning side, which isn’t something IROs can always do by themselves. For example, some providers may offer to ‘market’ your event by sending out invitations and reminders to your target audience via e-mail or text messaging (SMS) some days before and again on the day itself. However, not all companies feel comfortable with this arrangement, and may prefer either to contact investors and analysts themselves or ask their brokers or financial PR consultants to do it for them.
Either way, the conferencing company should be involved in as many planning stages as possible, and even offer helpful checklists explaining what companies must do one week, one day or just 30 minutes before the event. Rehearsals are also necessary to check sound quality and the smooth flow of any presentational material. Most providers can offer a pre-recording facility for key parts of the event – so if your CEO is not an especially good live speaker, for example, an earnings announcement can be recorded beforehand.
Although it’s meant to minimize the potential for problems, pre-recording does not suit everybody, often because of concerns that price-sensitive information could leak out. ‘If we did pre-record, the service provider would be involved with the script before it’s announced – and that’s something we wouldn’t want,’ explains Elizabeth Corse, who heads the IR function at Missouri-based IT business solutions provider Savvis.
For Peregrine Riviere, IRO at UK mobile communications retailer Carphone Warehouse, it’s less a question of safety and more one of style. ‘Pre-recorded announcements would take away from our company’s communications style,’ he says. ‘Spontaneity is what we’re about. In fact, our CEO Charles Dunstone is at his best when he’s being spontaneous.’
Event control
Conferencing providers say IROs are usually very keen to have as much information as possible on those signing up for an event. Controversially, this information makes it possible for companies to manipulate the Q&A session. When Deutsche Börse’s management barred activist hedge funds from asking hard-hitting questions about the exchange’s attempted takeover of the London Stock Exchange on a conference call in April, the incident was portrayed by the media as yet another example of corporate arrogance and lack of sensitivity to investor concerns. Press reports also suggested it would ultimately lead to the ousting of then Deutsche Börse CEO Werner Seifert.
Even so, in most cases this registration information is used to prioritize, not dodge, questions during the call. Thomas Richlovsky, senior vice president and treasurer at National City Corporation in Cleveland, Ohio, says it’s common sense for companies to be critical about how they allow senior management’s time to be used by listeners during a conference call. ‘It would be completely understandable if preference were given to a well-known Wall Street analyst who has been covering us for some time over someone from a hedge fund whose name we’ve never heard before,’ he points out.
Riviere, though, says it’s a waste of time to keep too close an eye on listener lists as most analysts are more than capable of slipping by unnoticed if they want to. ‘A company only knows who you are if you tell it,’ he states. ‘It’s very easy to register for one of these events as [email protected] – in fact, I might have done that a few times myself in my analyst days. I don’t think it’s possible to stop a rogue caller from joining in if he or she is determined.’
That said, better information about your audience does help improve the quality of your company’s response. ‘It’s worth monitoring if there’s an analyst or investor you know who is riding a particular hobbyhorse,’ says Corse. ‘That way you can warn management. Or, if time simply runs out and someone hasn’t had a chance to participate, you can follow up with him or her afterwards, one on one.’
Quality support
Because conference calls are a form of corporate branding, companies value intelligent and attentive event operators. Operators typically welcome conference callers, introduce the main speakers and often act as moderators during the dreaded Q&A sessions. For a global company with shareholders and employees of different nationalities, operators also need the necessary language skills to support a good service, and a basic understanding of IR needs.
‘The worst possible start to a conference call is the operator not knowing how to pronounce the chairman’s name,’ says Keith Irons, founder of UK financial communications agency Bankside Consultants. ‘Even when that doesn’t happen, you can always tell when operating staff haven’t been properly trained.’
Eugene Truett, vice president of IR at Harsco Corporation, the engineering products and services company based in Philadelphia, says he never forgets a good operator when he finds one. ‘We typically have from 50 to 60 people on a single call for our quarterly announcement so it’s important to make a good impression,’ he explains. ‘Occasionally we get an exceptional operator and in those cases we will ask for that person to be kept on as the moderator or operator for future conference calls if possible. The conferencing company is usually happy to oblige.’
Similarly, James Kerr, IRO at Unisys, the US information technology services and solutions company, values a good operator service as much as he does the price. ‘We’ve used a number of different firms in the past and we check them out thoroughly beforehand,’ he says. ‘Of course they have to be competitive in terms of price, but we want good operators, too. They should have a good voice and very polished manners – listeners must feel comfortable with them.’
Conferencing providers have realized they can maintain a competitive advantage through better-trained operators, especially when it comes to their IR clients. As a result, some have begun building a more formal structure around this by training dedicated teams of operators to become proficient at handling the most typical IR conferencing needs.
Bells and whistles
There are very few conference calls these days that don’t involve some form of multimedia. Calls are typically linked to the internet to allow them to be accompanied by slides or other visuals that can help executives reinforce their message. However, there has been a much slower uptake of the full suite of multimedia and interactive features on offer than some providers had predicted.
Some of the reasons for this are entirely practical. When it comes to using live video, for example, issues of bandwidth and firewalls are often beyond a company’s control. ‘We have looked at the possibility of using video, having a PowerPoint presentation running alongside the audio conference, but this only works if everyone has broadband, and the people receiving the conference call don’t always have it,’ says Keith Irons, founder of UK financial communications agency Bankside Consultants. ‘The system will always be limited by the lowest common denominator, and listeners often don’t want things to be too complicated.’
As it stands, media-rich presentations linked to audio conferencing are seen by many as a new opportunity for something to go wrong. However, service providers say conferencing will become more of a collaborated experience between the audio and the visuals as companies begin to feel more comfortable with technology that is already available. This means more web-based visual elements such as slide shows and videos will feature alongside audio presentations.
Tips for choosing a good conferencing provider
- Find a conferencing company that allows you to work with the same people at each event. They are more likely to be familiar with your needs and preferences and this will provide peace of mind.
- Choose a provider with a proven track record, instead of a newly operational firm. Ideally, your prospective service provider should be able to offer references from other companies.
- If your company is reaching out to a global audience, make sure your conferencing operators are able to support different languages.
- Be wary of low-price offers as the quality and training of operators is likely to be reflected in the cost. Fortunately for companies, many service providers say the conferencing market has become so competitive that prices are constantly falling.
- Find out what works best for your technological needs. Try not to be sold on every feature you are offered but might end up never using.
