A question not often raised in discussions of shareholder value is: who exactly are the shareholders? And what is it exactly that they value? A perspective paper from the Boston Consulting Group, Treating Investors Like Customers, proposes that the answers to these questions are the keys to optimizing shareholder value. They start by looking at a company’s investor base in much the same way they look at a customer base:

Seen from the perspective of the financial markets, a company’s ultimate product is its equity. So companies need to start applying to their shareholders the same kind of strategic disciplines they typically apply to customers. Treating investors more like customers does not mean employing misguided, and increasingly discredited, techniques for “managing earnings.” Nor does it mean that corporate executives should let investors determine business strategy any more than they should let customers determine product strategy. What it does mean: developing a detailed process for ensuring that a company’s strategy is informed by the perspectives and requirements of its investor base, and then working over time to create alignment between strategy and shareholders.

In marketing practice, customer segmentation is perhaps the cornerstone to creating any successful campaign. Segmentation is the process of surveying a pool of potential customers, segmenting them into manageable groups based on shared traits, analyzing those traits to understand what product attributes are important to each segment (e.g. style, convenience, price), and finally aligning your products and strategies with one or more of those segments. An extension of customer segmentation is that not all customers are equally valuable to a company. It is not uncommon for a minority of a company’s customers to generate the majority of their profits. What would it mean to apply the process of customer segmentation to one’s shareholders?

Just as some customers are more profitable than others, some investors are more attractive than others–whether because of their timeframe (long horizon, low churn), investment objectives (more in tune with future direction than past portfolio), or interdependence (insiders, employees, and alliance partners). Cultivating these aligned investors will help the company migrate toward an owner base that supports the long-term strategy and will reduce unnecessary volatility as short-term investors move into and out of the stock.

The presence of this type of misalignment between shareholders and corporate strategy raises some troubling questions related to market efficiency. How would such a misalignment arise? We could guess that investors have a poor understanding of a company’s strategic direction, but this is unlikely in the case of institutional investors. A more likely explanation is what I’ll call “strategy drift”, where investors and corporate executives had the same objectives at the time of purchase, but over time the positioning of the company has changed. Various factors, behavioral and otherwise, could cause institutional shareholders to maintain their holdings, at least in the short run, despite the misalignment.

In the end, BCG argues that shareholder value can be created directly by resolving these misalignments where they occur. Companies need to understand who their shareholders are, what attributes of the company’s stock they value, and if these values conflict with corporate strategy, either the strategy needs to shift, the shareholder base needs to be “migrated” towards a better fit, or a combination of both. This is an intriguing approach to value creation, which seems to run counter to orthodox financial theory.

Read more: BCG Perspectives: Treating Investors Like Customers