Ditch FaceTime for Face-to-Face Time

08/06/2015

Capital Markets Team

Despite our increasingly digital world, or maybe because of it, the power of personal interactions is greater than ever.

Ditch FaceTime for Face-to-Face Time

And yet, many of us still depend on electronic forms of communication in business. Everyone has experienced the horror of the morning rush of emails, countless missed calls, and endless notifications that are inevitably ignored. Nonetheless, many of us continue to rely on these forms of communication, forgetting that the greatest communication tool at our disposal is not our phone, email account or iPad, but ourselves.

Although the exact figures are a point of contention, Albert Mehrabian’s theory - that 7% of communication is spoken word, 38% is voice tone and the remaining 55% is body language – is still generally accepted.[1] Thus it follows that in a recent survey Redleaf Investor Access found that over 70% of investment managers counted face-to-face time with company management as a key reason for finding an equity or fund to be an attractive investment.

The main reason for meeting with an investor is so management can provide detailed updates on current company news and strategy. It is not always appreciated that a face-to-face meeting can give the management an important chance to build a lasting relationship with current and potential investors. An established personal relationship can provide trust and transparency.

If an investor has confidence and trust in management it will increase their confidence in the wider operations and will encourage a personal interest in the progress of the management team.

A key asset of any business is its people. Management teams must appreciate that they are the face and foundation of the company. As such, they must project a confidence and positivity to investors. Investors must have faith in the ability of the foundations to support the structure of the company. A personal relationship between investor and management allows investors greater insight into the structure of a company. If an investor has faith in the foundations of a company they are more likely to stand by the company in tough market conditions.

Similarly, the most successful presentations tend to be those delivered in person.

The interpretation of a presentation can vary depending on medium, tone of voice and body language: a presentation delivered over the phone cannot be interpreted as well as one delivered in person. Furthermore, investors will want to know how management handle tough questions and whether they appear trustworthy and genuine. If a management team comes across as honest and engaging in person, investors will gain confidence. Conversely, if management have very little personal interaction with their stakeholders, faith in the company can easily dwindle.

Moreover, it is important to note that a telephone call is less conducive to conversation than a face-to-face meeting.

On the telephone, both management and investors are more able to veil their true meaning; conversations have a tendency to be awkward or stilted. As a result, investors may be less likely to take a follow up meeting or, importantly, invest in the company.

In addition, the value of small talk should not be dismissed. A personal connection can be founded on something as simple as a mutual interest in a sports team or a favourite restaurant. These interactions are far more likely to occur when meeting in person as the atmosphere tends to be more relaxed.

Busy schedules often mean it is easier to convince an investor to take a call with a company rather than meet face-to-face. But however difficult they may be to arrange, face-to-face meetings carry more significance after the event.

These meetings allow investor and management to develop personal relationships built on trust, which in turn, lead to long-term partnerships. Not only this, but such relationships make meetings more engaging and dynamic and (dare we say it?) fun. Social media, e-mail and Skype are great platforms for communicating across distances and maintaining connections, but should only be seen as stop-gaps between – not alternatives to - face-to-face communication.

In a world where it is too easy to hide behind a screen, do not underestimate the power of good, old fashioned face time.


 

*Survey conducted by Redleaf interviewing 57 wealth managers across the UK

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