EQ’s Shareholder Voice research showed that over 25% of UK Gen Z investors ranked perks and discounts as a top three reason for buying shares in a particular company.
In the past, many companies considered customers and investors as separate,” says Mark Bullen, managing director, share registration services at EQ. “But the connections individuals make with companies via their retail activity are starting to permeate into how they think about what stocks to invest in.”
Offering membership benefits can make equity ownership more attractive because many people can’t resist perks and other offers that give them a feeling of exclusivity. One company offering such benefits to their retail investors is pub, bar and restaurant chain Mitchells & Butlers (M&B).
Every year, M&B gives each of its 53,000 shareholders a booklet of 12 discount vouchers.
These are so prized by stock owners there would be “outcry and uproar” if the scheme was abandoned, says Greg McMahon, company secretary.
Each voucher offers 20% off meals for up to 10 guests at M&B venues. The company encloses them in the annual report correspondence, along with a letter from the chairman, which encourages shareholders to learn more about the company.
But McMahon says the main motivation behind the voucher scheme is to encourage stock owners to visit and experience the pubs, bars and restaurants in which they have invested.
We find this works – it’s what people like, if somebody doesn’t get their vouchers, they quickly let us know. They also talk about it on social media, which helps others understand the value of the scheme.”
Greg McMahon, Company Secretary, Mitchells & Butlers
McMahon acknowledges it is harder for some companies, such as manufacturers, to provide such a benefit to their shareholders, in contrast to retailers and hospitality businesses.
M&B sees the scheme as a win-win as it keeps shareholders happy while also getting them to spend in the company’s venues and boosting brand awareness with their guests.
The booklet is only available in paper format. But the firm is considering using an app, especially as so many such benefits have gone online since the start of the Covid pandemic.
Read the full report
Through in-depth research and expert industry commentary, Shareholder Voice 2021 explores the behaviours, motivations and voices of 2,000 retail investors in the UK and US.
• How perks can turn investors into brand advocates
• Increasing demand for ESG transparency
• The accelerated AGM evolution