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An investomer is a customer of the same organizations in which he or she hold shares. Investomers tend to be more loyal than their non-equity holding counterparts.[1][2][3]

Marketing studies[edit]

Although the concept of a marketing goods and services to shareholders has been around for some time, the strategic importance of shareholder marketing was first articulated, defined and discussed by Butera (1996).[4] who found in his research into shareholder value that a potential outcome of share ownership is brand loyalty.

This idea was taken further by Bain & Co in 2000 who found that on average, Investomers frequent businesses 1.7 times more often than the typical shopper and spend 1.5 times as much money. Moreover, they remain customers 1.1 times longer and generate 2.1 times the number of business referrals (Mowrey, 2000)[1] These figures came from a study by Bain & Co with 1212 respondents across 9 industry sectors.

In 2004, a survey of 500 investors found that share ownership improves share of wallet performance (Schoenbachler, 2004)[2] as another indicator of brand loyalty.

In 2008, two Australian researchers Dr. Michael Valos and Stephen Prendergast found that amongst four of the five sectors they studies, Investomers were more attitudinally loyal, less likely to churn, more likely to be advocates, and more amenable to cross-selling communications (Valos, 2008).[3] This research went on to find that three investomer characteristics were found to “strengthen the investomer effect”. Notably, share bonding, indicated by the number of shares held and for how long; perceived share performance, the better, the more loyal; and investor knowledge, indicated by the amount of time an investor devotes to researching stocks and the number of trades they carry out each month. The sector where the investomer effect could not be proven was in General Insurance (Car, home, contents). The study found the reason being that respondents who were shareholders in the holding companies that owned the insurance brands lacked awareness of the brands owned by the listed entity.

Of interest was that none of the studies highlighted above concluded that being an investomer made shareholders more loyal as shareholders. In the Valos study, it was found that while investomers are systematically more loyal as customers, they are not necessarily more loyal as shareholders, which was indicated by them having a similar level of retaining shares in 12 months’ time, and having comparable levels of trust, admiration, and willingness to recommend the company as a share investment.

Strategic Implications[edit]

The following conditions are necessary then to unlock the value of investomers:

  1. Investomers must understand which brands are held by the organisations they invest in. A lack of awareness of a company’s brands prevents investomers from purposefully supporting them in the form of spend or advocacy.
  2. Investomers need to be targeted directly to take full advantage of their loyalty.
  3. Investomers are more likely to be more responsive when the share price is doing relatively well. Those customers who rate the investment performance of a company’s shares as ‘above average’ are more loyal than those with a poor performance perception.
  4. Investomers like to be acknowledged as shareholders but don’t necessarily have to have special benefits
  5. Targeting investomers with shareholdings of over three years is more likely to generate favourable returns
  6. Organisations are likely to see a greater invetsomer effect among shareholders with higher levels of investment. Investomers become more attitudiannly loyal and open to communications about products or services as their level of investment increases
  7. The investomer effect is enhanced by greater knowledge and understanding of the company, so keeping them informed of share performance is key
  8. Direct forms of communication are the most preferred by investomers. For existing products they don’t own, personally addressed mail is the preferred option, followed by email. Personally addressed mail was found to be the most preferred media for new product announcements and for information on products and services they already buy.


  1. ^ a b Mowrey (March 2, 2000). "The Investomer is always right" (PDF). The Industry Standard. 
  2. ^ a b Schoenbachler, D.D., Gordon, G.L., and Aurand T.W (2004) "Building brand loyalty through individual stock ownership"' Journal of Product and Brand Management. 13(7) P488-497
  3. ^ a b
  4. ^ Butera, M.A. (1996) "Hidden values for shareholder communications", Corporate Board, September–October P9.