October 17, 2022
Shareholder rewards are benefits that individual investors can receive simply for owning stock and as a way for those companies to reward shareholder loyalty. It is an increasingly important tool for companies who are trying to connect with their shareholders and show them that they care about their loyalty.
A survey, conducted by TiiCKER in partnership with The Harris Poll, highlighted the value of connecting individual investors with the brands they know and love. The national survey found that 80% of retail investors are more likely to purchase products of the brands they own as investors. That percentage increases for those aged 34-64, as well as for individuals with an annual household income of at least $75,000.
The data underscores an indisputable fact – individual investors are also customers and want to be rewarded for their loyalty by the companies they own and the brands they buy. Simply put, the vast majority of investors ‘buy what they know.’
Rewarding retail investors can be difficult for public companies who might not be able to easily identify individual investors or verify stock ownership levels or how long shares have been held. With TiiCKER, it’s a snap. TiiCKER’s experts can help companies design the perfect shareholder rewards program that can: reward shareholders, connect companies to their shareholder fans, better communicate to customers, create a reputation for caring and collaborate with customers to make them feel valued.
A growing number of publicly traded companies are working with TiiCKER to create stockholder reward programs. TiiCKER helps these companies offer retail shareholders with existing or bespoke perks based on shares owned and the length of time they have been held.
After connecting their brokerage accounts, individual investors can immediately see which perks they might be eligible for and search other benefits offered by other top companies. Retail investors don’t need to be Warren Buffett to be eligible for stockholder perks either. For example, a retail shareholder with a single share of Whirlpool (Tii:WHR) with no holding requirement receive up to 30% off the Whirlpool family of brands including KitchenAid, Amana, Maytag, Whirlpool, JennAir, Hotpoint, Gladiator and more. The more shares owned, the more individual investors benefit.
Many companies on TiiCKER offer different rewards depending on the shares held. Real Good Foods (Tii:RGF) offers four levels of rewards. For 100 shares of RGF, individual investors qualify for a $50 digital gift card for Realgoodfoods.com and $25 Visa gift card; for shareholders who hold at least 400 shares of RGF stock qualify for a $50 digital gift card for Realgoodfoods.com and $100 Visa gift card; for 1,000 shares of RGF stock retail shareholders qualify for a $100 digital gift card for Realgoodfoods.com, $100 swag credit in the RGF Shareholder Store and $250 Visa gift card; and those holding 3,750 shares are first to sample its new products and will have a fresh delivery of RGF products at their doorstep every month, company swag and a $500 Visa gift card.
Shareholder perks are in-kind gifts or purchase discounts that disproportionately reward small shareholders. An article in The Review of Financial Studies shows data from Japanese firms, which have a long history of shareholder rewards, indicate that firms initiating perk programs attract individual retail shareholders and experience increases in share values.
The research by professors Jonathan M. Karpoff of the University of Washington, Rob Schonlau of Colorado State University and Katsushi Suzuki of Hitotsubashi University indicates that companies that provide shareholders gifts may not be doing it solely out of generosity, but also as a means to boost stock prices and facilitate trading in the stock. The researchers found that following the announcement of new perks firms’ stock prices increased.
“When these perks are announced, there is a detectable change in the stock price, and, on average, in our sample it’s on the order of 2%, which is significant,” Schonlau said. “It’s like the equity in your firm is suddenly 2% more valuable.”
Although more than 20 percent of Japanese firms offer some form of shareholder perk, the ones that saw the greatest benefit were those with fewer individual retail investors engaged before the announcement of the perk.
Whether large or small, perks build goodwill between companies and the individual investors who hold stock.
Want to know more about getting your public company on the TiiCKER platform? Drop us a note at email@example.com.
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