Why are market perception polls so useful?

At KRIS we’ve been conducting market perception polls – typically done before and after financial results presentations and/or large events (e.g. acquisitions) – for our clients for almost 20 years. Our polls are independent (i.e. we don’t gain any advantage from them), and are always conducted telephonically, meaning that we interact directly with major shareholders, sell and buy-side analysts, and fund managers. We also talk to high net worth individuals. This is a group of experienced, bright individuals who understand the market exceptionally well. The polls therefore give company management direct insight what these individuals think about their company and the industry they operate in. Very often, our polls also trigger ideas for implementation and, perhaps more importantly, pick up any potential issues that might be brewing. This not only gives management a “heads up”, but we also provide recommendations to them on how to deal with potentially negative issues. In our view, polls are thus one of the most critical tools a listed company should have access to.

The process

Respondents tell us about their concerns, what they like most about the company, what they like least about the company, how they perceive management and much more. The responses are summarised into easily understood feedback, and we also give recommendations on how to tackle positive issues as well as any possible negative feedback. Poll results are conveyed only to management and in some cases, the Board of Directors. Our polls provide a very good measure of how the business is stacking up against what it said it would deliver, as well as how the company is performing against its peers. To remain true to our independence, we don’t reveal the name of the respondents to the client.

What’s revealed?

 One of the most valuable aspects of conducting polls is that we often pick up very early on when a potential issue is brewing, and are thus able to equip management ahead of 1:1 meetings with shareholders and other key stakeholder ways in which they can address potential issues (good or bad) that might arise. They can also provide answers to these in the results commentary, the presentation and the press release, as well as the annual reports and 1:1 meetings which could appease the market, resulting in less direct questions, if adequately addressed.

In our opinion, polls are one of the most critical tools a listed company should engage in. On average we conduct four polls a year for clients, but even conducting two a year will provide valuable, independent feedback. Polls are a great way to check whether the company’s perception if itself aligns with the market’s perception of it – and theoretically this should arrive at fair value.

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