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Earnings Press Release: 10 Best Ways To Really Ruin It - Part 5

Earnings Press Release: 10 Best Ways To Really Ruin It – Part 5

As a continuation of the previous consideration, we often see CEOs, CFOs and IR teams put all their efforts in drafting their announcement with only analysts and investors in mind: “We don’t need to explain more, we’ve said that before, they’ll understand, they know us” usually serves as the excuse not to write in layman’s terms or think beyond the investment community.

We are not only referring to the reduction in the legalese that the 1998 US Securities and Exchange Commission’s “Plain English Handbook” aimed to achieve, but also to the plethora of technical, industry-specific jargon, acronyms and expressions that most corporates overuse. In the end, they only have themselves to blame if “the media did not get it right”, a recurring complaint.

Furthermore, some companies are tempted to provide more content, more color or granularity in the script for the earnings call (the “prepared remarks”), than in the press release. This is particularly the case in the US. Yet, readers of the announcement, whoever and wherever they are, will by far outnumber those who will attend the earnings call or read its transcript.

In so doing, companies miss many opportunities to reach out to audiences that are as important as analysts and investors… and that can add value too.

Indeed, in today’s digital age, companies lose control over their target audience as soon as they hit the “Send” button. This means that not only employees, but also potential customers, distributors, suppliers, recruits, or friends, or relatives may unintentionally come across your information because they have been attracted by the headline, for instance. Your announcement has triggered an interest in them that can lead to higher product sales, new partnerships, more job applications, or that can sustain your reputation. Isn’t that worth thinking about? But, for them to trust your message and want to find out more about your company, they need to understand what you are saying without having to use a dictionary or an online acronym finder.

As you progress towards the completion of your earnings announcement, we recommend that you test its content: ask your corporate communications, media, HR teams and find out how your messages will resonate with their respective external and internal target audience. Make sure your test strictly complies with the rules governing the dissemination of price-sensitive information, even among colleagues. Look for Legal input too, if, for instance, you are providing an update on certain litigation in your announcement.

Find out how your messages can feature on social media and other news distribution channels.

Your Investor Relations and media advisors can also supply useful insights into how similar messages have been perceived at other companies.

And then, imagine what an individual shareholder would make of your press release, or your social media post, or the way his or her favorite newspaper tells your story… While he or she may be light-years away from your target audience, he or she, too, deserves clear, well-written, engaging and informative communications.

We therefore suggest you use everyone’s feedback to tweak and fine-tune your announcement one last time, before submitting to the Board’s approval.

More tips on how to ace your next earnings press release in the next few days. Stay tuned!