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May 13, 2024

Perception studies are the foundation of effective targeting

Professional surveys offer valuable insights into stakeholder thinking
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Between investor shyness and their own busy schedules, executives can find it hard to understand shareholder concerns. But by leveraging third-party expertise and embracing the power of perception studies, public company executives can garner data to inform and improve investor targeting.

Meetings. Emails. Newsletters. Executives have plenty of ways to communicate with shareholders. But what happens when they need to understand what stakeholders are themselves thinking, in order to improve their prospective investor targeting? 

An increasing number of companies are opting for perception studies. Professional surveys, typically conducted by third-party experts, they offer leaders valuable insights into bolstering their corporate image – especially if they act quickly on the findings.

Shareholder engagement 

The popularity of perception studies is rising and boards themselves are under rising pressure to understand what shareholders want. When it comes to shareholder perception specifically, meanwhile, this popularity isn’t hard to understand. For one thing, soaring investor activism is forcing executives to take investor concerns more seriously, with large US companies facing a 68 percent surge in public campaigns between 2022 and 2023. 

Naturally, executives could theoretically contact their shareholders directly, gauging their concerns from communications to corporate governance. In practice, however, direct engagement can be counterproductive, not least when the C-suite is already busy with day-to-day business functions, and when investors may be reluctant to answer the phone. 

Another challenge to direct engagement involves the honesty of respondents – or rather the lack thereof. Think about it like this: are worried investors likely to tell executives their concerns, given the need to hone long-term relationships? That’s doubly true around potentially controversial topics, such as share repurchase programs or granular data analytics, which risks frustrating CEOs or CFOs. 

That leaves the question of when, exactly, firms should contact external partners and commission shareholder surveys. The concerns perception studies ultimately highlight partly depend on the specific challenges executives are facing. Certainly, being armed with this data prior to extensive – and potentially expensive – investor outreach campaigns is very helpful.

Unfavorable media stories are another catalyst here, as are inaccurate short reports. Share buybacks and disposal of underperforming assets are two common issues. Bolstering corporate management is a third, notably via robust board oversight. 

Whatever the results of a survey, at any rate, companies should be ready to enact changes promptly. It helps that the best external studies, typically presented to boards with data-rich graphs, can explain results clearly and concisely – simplifying implementation even for busy executives. Naturally, the right audience needs to be educated about the changes, making perception studies a key component of effective investor targeting and outreach.

Following investor advice can bring impressive results. A concrete example of this comes from LHA Investor Relations, which was approached by a $500 mn Nasdaq-listed consumer brand company asking for assistance after a run of negative publicity. 

Talking to a range of stakeholders – prospective investors, shareholders and sell-side analysts, among others – we quickly got to grips with the issues via in-depth interviews. From there, we made recommendations spanning strategy (investing in core brands) and governance (hiring more experienced directors) to capital structure (addressing worries around debt).

Just as importantly, the company soon took these ideas to heart and improved its investor messaging and targeting, which contributed to an eventual share-price boost of 22 percent. That, in turn, speaks to another lesson of perception studies: following through and actually proving to investors – existing and potential – that their voices matter is important. 


Of course, companies must be careful. Disclosing a metric and then removing it from the marketplace later can be damaging. Yet with 86 percent of Americans now demanding transparency from businesses, executives should probably expect to commission more perception studies prior to proactively engaging the Street – though, given how valuable they can be, that isn’t a bad thing.

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John Heilshorn

Heilshorn is one of the founding partners of LHA investor relations, a division of alliance advisors