If investor relations remains a venue of the financial discipline, it now becomes, as well, the domain of the marketer. Or more accurately to the investor relations professional’s acumen must be added the skills—and certainly the viewpoint—of the marketer. A small but significant addition— most investor relations professionals’ communications skills are already part of their arsenals. Marketing, in investor relations, is more a frame of reference than an overwhelming configuration of marketing tools. But marketing methods are distinctly part of sound investor relations practice. Where once the relationship between the company and its investors or potential investors was maintained almost entirely with basic investor relations tools—the analyst meeting, the shareholders meeting, the annual report, the press release—today the concepts of contemporary marketing, driven by the needs and desires of the market and not by the wishes of the company—alter the techniques used. Investor research is more thorough, now, and more is known, and sought to be known, about the prospective investor, so that information can be more relevant to the investor’s needs. Today the identified potential investor is pursued with a variety of devices, from Web pages to E-mail.

The traditional investor relations techniques—the analyst meeting and luncheons, the press releases, the annual report—have all changed, as the needs of the investor and the techniques of communication have changed. There are now more intensive attempts to penetrate the consciousness of the investor. Electronics move communication from random and broadcast to targeted. We can know more about our target, and tailor our information to that target, and get the information out there—effectively and cost effectively.

And what has all this to do with the new investor? Simply this. Every investor is a customer. Every investor is a buyer—or seller—of stock, or an intermediary who advises others to buy stock. If you’re squeamish about marketing—OK, even about selling— remember that the role of investor relations is to persuade an investor (read customer) that a dollar invested in your company will appreciate faster than a dollar invested in somebody else’s company. Persuasion means using facts intelligently, and using marketing techniques to project those facts in a way that leads the investor to understand why that dollar invested in your company will appreciate faster than a dollar invested in another company. It does not, under any circumstance, mean distorting or perverting or exaggerating the facts. Good communications means clarity, transparency, and truth. Ask any corporate jailbird.

The elements and foundation of change in the business landscape are now well known. But what has changed most significantly is not just the structure of the markets, nor the regulatory environment generated by the events of the past few years, but the nature and practices of the investor. We live, now, in a world in which more than half of adult Americans own stock. And not all of them have MBAs, nor have many of them even seen Wall Street.

At the same time, it’s important to recognize that, as with most things in the dynamics of our world, not everything has changed—and that fact alone dictates a fresh view of the investor, both professional and nonprofessional. And it’s the investor, after all, who is the target audience for investor relations. Ultimately, more than half of corporate capital for American and international business comes from equities. The major portion of the remainder of the capital needed to run even a moderate-sized company must come from either debt or retained earnings (real, not inflated). It must be noted that the profits from which come retained earnings are also the source of dividends. This distribution of earnings becomes an investor relations problem, incidentally, because shareholders must then be made to understand the balance between profits to be distributed and the need for profits to be reinvested. Thus, the case for more aggressive marketing, as an investor relations discipline becomes even more compelling than ever before. One last word about the stock market.

The stock market is never finite. It’s constantly in motion, always changing, always subject to a vast variety of influences. It’s easy to think of it in terms of the current market, or yesterday’s market or the future market. There are a great many factors that affect the market, and we even know what some of them are, but there are too many factors to know all of them. And for all the science, for all the technology, for all the theories, it’s still a wild horse we have to ride, as both investors and as corporations trying to craft the texture of the corporation to match the needs of the market. It’s always the current market, and it will always change. Up or down, it will survive the next disaster, and thrive on the next windfall. But it’s always the current market.

Jeffrey Corbin, managing partner of KCSA Worldwide, makes the point in his book, Investor Relations: The Art of Communicating Value. He says, “For the publicly traded company, it is important to recognize that the stock market works—that it presents a true valuation of a company.” But, he notes, “if a company’s communications—in writing or in oral presentations —do not sufficiently explain the current valuation and potential opportunity, the highest possible valuation will not be attained and more damage than good may result.”

For the corporation seeking to improve the performance of its own stock, in even the worst of the markets, certain basic facts must be recognized . . .

• Regardless of the price of a stock at any given moment, or the low to which the Dow Jones average—or any other average—may sink at any moment, there is still a market. It opens every morning and it closes every night. Granted, volume may diminish or expand sharply, but liquidity —or at least the structure for liquidity—still exists.

• The number of firms in the securities industry fluctuates rapidly and wildly. But the industry doesn’t cease to exist, even in the worst of times. Despite some severe economic downturns, and profound securities industry shakeups, the number of firms doing business in the securities industry went from 4470 in 1970 to 9021 by the end of the 1980s. The number of security analysts, those people responsible for analyzing a public corporation’s potential for success in the stock market, went from as many as 15,000 in 1971 to 17,000 by the end of the 1980s. In 1997, with the increase in pension fund management and other institutional analysts, there are almost 23,000 analysts registered with the Financial Analysts Federation (now called the Chartered Financial Analysts Federation). By the end of the 1980s, there were 32,000 stock brokers. Today—reflecting the new economic environment—there are more than 74,000 brokers.

During the past four decades we’ve had several business cycles. We’ve had recessions and booms, profound inflation and remarkable stability. We’ve seen new European, Asian, and Middle East economic configurations, and perfidy on Wall Street. We’ve seen the market attacked by wars and recession.

We’ve seen, as well, new industries that have revolutionized society, such as technology, biotechnology, and communications. Once glamorous industries, such as steel, have declined, or emerged as mini-industries. Who could have predicted, a few years ago, the ubiquitous cell phone? And through it all, the need for capital has relentlessly grown, and the role of investor relations has grown—its value proven again and again. What has not changed—what is constant—is the competition for capital. And the way this competition is fought is to add the best skills of marketing to the best practices of investor relations.