Sunday, 16 April 2006

AR is a sales job with no quota

Karen Rohack Mclaughlin, Queen Buckaroo at QB Comm, Inc., wrote these notes of a Silicon Vlley PRSA meeting two or three years ago. Re-reading them, I think think deserve a wider audience. To find out more about the SV-PRSA, visit

(AR) has evolved into a critical function due to the industry analyst’s ability to impact a firm’s shareholder price, strategic position and overall mindshare buzz.

The panel explained that AR is a sales job with no quota and no typical day. As with PR, AR influences the mindshare of a key audience by educating them about the company’s business and marketing strategy, key messages and by freely exchanging information. The panel felt AR provides a good return on investment because of its ability to understand the competitive landscape, its positive impact on a company’s strategy and message development, and its ability to give management an honest viewpoint about what’s happening in the marketplace.

A panelist commented that PR tends to take a short-term view, while AR has a more long-term perspective and relationship-building function. This comment made me wonder if AR’s exposure to PR is not to its strategic planning and execution functions, but rather only to the tactical, short-term PR projects such as product intros, new programs and initiatives and crisis response.

What Makes An AR Program Successful? The panel emphasized that support from senior management—their provision of time, financial resources and staff --- are all crucial for the long-term success of an AR program. The panelist’s AR departments averaged between two and 20 people, and all utilized some type of “home grown” contact database solution to keep track of analyst contacts.

While it was mentioned that Cisco offers an annual two-day analyst conference that is a combo of AR and Investor Relations (IR), the panel cautioned that it’s not a good idea to do a large mixed-analyst briefing for a new product or company initiative, especially with tier one analysts. One-on-one briefings are best. However, a large briefing of analysts from one firm can be a cost-effective way to communicate.

Similar to the way many of us set up our press relations, HP tiers their analysts. Level one analysts receive one-on-one briefings and more direct contact, while levels two and three are updated mainly through teleconferences. The panel also noted that because analysts know the market and the players, they can be used to bulletproof presentations, messages and to fine-tune company or product positioning. The AR department can help PR select the appropriate analysts for these types of briefings.

AR’s Biggest Challenge: The analyst landscape is constantly changing. With so many mergers and acquisitions, customer solutions are expanding, so there is a real need to balance corporate vs. technology messages to the analysts. One panelist mentioned, “...many don’t know where the industry is going, so we’re all hedging our bets with strategy/product solutions.”

Key Points to Remember: In AR, you can never rest on your laurels. AR is only one data point for the analysts to secure information about a company’s strategy, technologies or products. It takes hard work to continue to be viewed as an important and knowledgeable resource to the analysts and to reinforce your company’s mindshare and analyst relationships. Also, there must be a strong synergy between the AR/PR/IR functions, as all are important partners in the communications effort. It’s critical to keep everyone updated on goals, strategies, programs, and the competitive and internal issues that might impact the audience.


Vinnie Mirchandani said...

I spoke to an AR exec just after Gartner acquired Meta and this person was delighted - "fewer analysts to brief".
As I wrote in blog below

in the last few years, with sourcing advisory firms and bloggers AR (if it defines its charter broadly) has become much more difficult - so agree with you

But I get the sense most AR still clings to the "less is better" viewpoint - we are only responsible for Gartner/Forrester/AMR type viewpoint...

Phil Payne said...

> Also, there must be a strong synergy between the AR/PR/IR functions, as all are important partners in the communications effort.

I'd add the lawyers to that. One deranged lawyer can send the entire relationship down the toilet.

Silicon Valley Guy said...

Smart AR concentrates on those analysts (individuals, not firms) that are the most relevant to the vendor's objectives. Obviously, which firm the analyst works for contributes to the analysis of analyst relevance. Is very important that speciality or boutique firms (e.g., TPI and Everest for sourcing or Burton for networking or Ventana for BI) be taken into consideration.

Another part of the analysis is which analyst firms are impacting active sales deals. This is how the larger firms get disproportionate mindshare with AR and the vendor as a whole. If nobody in my sales force is calling me to comment about something that Vinnie at Deal Architect said that is impacting a deal, then it is hard to justify prioritizing on that firm, when we get multiple screams from Sales that those so-and-sos over at Gartner just screwed something up. Not that I'm encouraging Vinnie to negatively impact vendors just to get noticed. ;->

A bit of advice, for what it is worth -- boutiques, speciality firms and individual practitioners need to encourage their clients to mention their roles in decision making to vendors sales reps. That will then give AR the ammo needed to broaden the number of firms to be briefed. Otherwise, the larger firms with the higher visiblity will always hog the available resources.

Vinnie Mirchandani said...

2 aspects here. I am not making a case for Deal Architect, my consulting firm, to be briefed. We go to market with a couple of partners, so clients may not even mention our name (they would mention the other firms name). So even if your firm knew to watch for DA, it would not help. Also, bacause negotiations tend to get emotional often it is better for us to advise clients in background. At least a third of the deals we are in, vendors do not know we are involved. But it makes my point that there are way more influence points than just the analysts.

The other aspect is my blog. (and the sourcing community I am inovlved with Techspend which just launched). Both are visible and there are plenty of buy side clients who read our views on software, outosurcing, telecoms. And it has been interesting to watch the benign neglect (with few execptions like SAP) vendors have shown towards that. the Google channel is far more virant and more visible than that of Gartner or Forrester. What I and other bloggers write are getting far wider, far more coverage than vendors
seem aware of. That they have not engaged bloggers more is to me is a bit more baffling

metromon said...

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