When selling products, most public companies have sophisticated marketing programs to stay connected to their customers. But how do those same companies connect to their retail shareholders, arguably one of their most important constituents?
Many companies are discovering the importance of offering shareholder rewards or stock perks as a way of connecting to individual shareholders. They offer these perks — small gifts, discounts on company products and even one-of-a-kind memorabilia and events — as a way to connect with shareholders. These shareholder perks are meant to create meaningful connections to the companies offering them and reward investor loyalty.
Loyalty plays a significant role in the decisions of retail investors regarding stock purchases and their discretionary spending habits. Customers enrolled in paid loyalty programs, such as Amazon Prime (Tii:AMZN) and Costco (Tii:COST), tend to spend 60% more with these brands. Even free rewards programs, like those from Starbucks (Tii:SBUX) and Delta Airlines (Tii:DAL), can lead consumers to increase their spending by 30% with these companies.
So it follows that publicly traded companies that offer shareholder rewards experience similar loyalty. Research indicates that companies providing shareholder perks can anticipate a rise in their stock price upon the announcement of such perks, as well as increased retention among shareholders. These perks enhance firm value by improving share liquidity, lowering the equity cost of capital, and strengthening market signaling to investors.
Publicly traded companies are also beginning to understand the growing power of the retail shareholder. There are more than 130 million retail investors who hold $17 trillion in assets. Individual investors make up about 10% of daily trading value of the largest 3,000 stocks in the U.S., according to Morgan Stanley.
Individual investors tend to invest in what they like. And it is important to note: Investors are consumers too. So when they find a product or service they like, they are much more likely to invest in it as well.
This isn’t theoretical thinking either. Research shows that shareholder rewards work. An April 2024 national poll of over 2,000 consumers, commissioned by shareholder loyalty leader TiiCKER and conducted online by The Harris Poll, found that 78% of retail investors would be more likely to buy stock in a company that offers shareholder perks or discounts, yet only 35% of these investors are aware of any publicly traded companies offering perks. The survey also found that shareholder discounts encourage stock purchases and long holds. 40% of retail investors say qualifying for a shareholder perk would make them hold shares for a longer period, and the top motivators to buy and hold stock are discounts on products or services (57%), gift cards (45%), increased loyalty points or program status (41%), and VIP events or experiences (30%).
Stock perks have been around a long time in Japan, but are a more recent trend in the U.S.
Japanese investors in Sony Corporation receive discount coupons for its products if they have 100 or more shares, Yamaha Corporation offers shareholders a choice of a discount on a purchase or a gift item every year, and Suzuki Motor Corporation annually sends shareholders with 100 or more shares an assortment of premium honey and rock salt.
More and more companies are working with TiiCKER to offer perks of their own and more investors are connecting to TiiCKER as well. Individual shareholders can find valuable perks on the platform simply by starting a safe and free account and connecting a brokerage account. TiiCKER does the rest by connecting investors to valuable perks.
Public companies looking to create their own effective stock perks can reach out to TiiCKER’s team of experts who can create shareholder rewards programs that get results.
