Investomer - The Loyal Customer
In the business world, you might have heard the term "Investomer". What exactly is an investomer? An "Investomer" is a customer who is also an investor in the business. Investomers are generally more loyal and more profitable than those without a financial interest in the product.
Cultivating a community of followers that want a piece of the brand for themselves is essentially the idea behind the investomer strategy. This approach not only increases brand loyalty but also helps companies build strong product relationships thus reducing customer attrition. Companies that cater to their investomers by providing low investment minimums, exclusive product discounts, and stock-based loyalty programs, have found that it has had a tremendous positive impact on their profitability.
Investomers not only help increase sales, but they also provide some of the most useful feedback. They bring specific insights about the products which are extremely helpful in fulfilling the businesses needs. When they provide feedback, they play a part in the running of the company which in turn makes the investomer feel more involved, giving them a sense of pride.
The Power of the Investomer
According to research conducted by Bain & Company and StockPower Research, the average investomer spends 54% more, visits a store (or Website) 68% more frequently, and spends 33% more in their spending category with a company they own stock in. Overall, shareholder loyalty programs can help a company boost revenues by 84% and profitability by 114%.
Customer Reach Out
Cultivating a community of followers that are loyal to your brand is one of the key aspects of the investomer strategy. They become your shareholders, your friends, your community and the heart and soul of your business. Utilizing social media and other platforms to connect with fans both with the brand and with each other can help build that community. A portion of that community becomes engaged enough to consider becoming shareholders.
Secondary Benefits
Raising capital is the primary goal of any capital raise, but some businesses are seeing a secondary benefit. Having a capital raise not only attracts people who already know about your company but with good marketing and press, it can attract strangers as well. Having a large, engaged customer base that is passionate about your brand helps to serve as a way to spread the word about your company turning friends, families, and customers into investors.
Raise Capital
With the passing of the JOBS ACT in 2012, the SEC changed how capital is raised by allowing companies to use the internet and social media to sell securities via general solicitation, fitting nicely with the investomer approach. Equity crowdfunding under these new regulations is used to facilitate financing online that has changed how capital is raised forever. Crowdfunding essentially eliminates the middleman increasing returns for both the investor and the issuer of the deals. Through the power of the internet, companies have access to investors worldwide, and investors have access to investments previously only available to a select few. There are now several different new capital raising structures that companies raising capital can choose from, Reg D, Reg A+, Reg CF, and Intrastate to name a few.
Crowdfunding Technology and Compliance Services
One of the most challenging parts of conducting a raise is figuring out how to process a high volume of investors and investments efficiently. This is why issuers looking to conduct a raise have enlisted the help of crowdfunding portals. Crowdfunding portals have the technology to help with the processing of investors and investments, and the compliance solutions to help ensure that your offering is compliant with state and federal securities regulations.
White label technology now allows users to showcase their deal, solidify their compliance to the applicable laws and guidelines they are using, streamline and automate the investor process, and manage the investor’s post raise, all via an online experience. Investors can even use their mobile device to access, make, and track his/her investments.
For issuers looking to raise capital up to $1.07M from non-accredited investors with Regulation CF, FundMe™, an SEC-registered Regulation Crowdfunding (“Reg CF”) funding portal is a great option. FundMe™ specializes in blockchain projects and can allow investments made in Bitcoin or Ethereum during the investing process upon approval, and ensures that your business is compliant with Reg CF while seamlessly reaching a national network of investors.
Disclaimer: This information is provided to our clients and other friends for educational purposes only. It should not be construed or relied upon as legal advice. Please contact your lawyer with respect to any of the matters discussed here.
This post was written by Lanli Pham on February 26, 2019