Importance of PR to the success of Small Cap companies

Importance of PR to the success of Small Cap companies

Conveying compelling content about a company to key segments of the broader public, who can potentially become stockholders, customers or brand advocates, can contribute to enhancing value for the existing shareholder.

And the best way to reach these groups with this type of messaging is via public relations.

Many small cap company execs look upon public relations as an unnecessary and maybe even frivolous luxury. They may not see the cost-benefit of it nor appreciate that their companies’ often have interesting stories to tell beyond earnings per share.

Or they conflate it with advertising and marketing and thus consider it a checked box.

But an effective public relations program can have a significant impact on the public perception of a company. In turn, those positive vibes (or conversely, negative ones) can influence the decisions of individuals to buy, sell or hold a company’s stock or purchase its widget, as well as have a profound effect on its overall reputation.

Then there is the outsized sway of social media. It’s always lurking in the shadows and capable of spreading a damaging story, or a complimentary one, virally in the blink of an eye. Thus, any company that ignores reputation management does so at its own peril.

Layering in a public relations plan can help mitigate those risks and amplify the rewards.

Despite the perception, augmenting an investor relations program with a PR strategy can be done relatively seamlessly and need not be cost-prohibitive if a few simple guidelines are followed:

  • As a small cap, there is no need to hire a large public relations shop. There are many well qualified small boutique agencies and sole practitioners that can provide the level of service needed.  They provide personalised service and, importantly, clients are not palmed off to juniors as happens in mid to large firms.
  • Keep it simple. Too many concepts at once dilute the impact of any strategy. In addition to being more effective, identifying one or two key messages that will resonate with the target audiences,

Whatever the ultimate strategy and messaging that’s decided upon, it will almost certainly involve a mixture of traditional, social and digital media tactics.

PR can drive shareholder value without many of the constraints of regulatory compliance and with much more freedom of expression in terms of the various formats and topics that can be weaved together to tell a company’s story.

Done right, the ROI of a properly executed public relations strategy can be tangible and needle-moving for the small cap company.

By providing access to a largely untapped pool of potential shareholders and customers, an effective PR campaign achieves the same goals as a successful IR program, enhancing shareholder value and attracting new investors.