Monday, 12 March 2007

AR Classics: Analyst Upheaval: What to Do About It

Four years ago, former Giga vice-president Gay Slesinger wrote this guidance about how to deal with analyst depatures. Since Gay wrote this she shuttered her business iMarket Strategies. We'd love to know what happened to her.


"Are you there? Please be there," Analyst Relations pros must think every time they contact the key industry analysts in their segment.

No wonder, given the upheaval in the IT industry over the past three years. The IT analysis firms suffered as well, with declining revenues and customer bases, leading to acquisitions, layoffs and closures.

Not helping the fear of here-today-gone-tomorrow was Gartner's December 5 announcement that it is laying off 200 workers, or 5 percent of its 3,800-person global work force.

Many analysts, including senior and "star" analysts, have left their firms proactively or due to layoffs, often forming small boutique firms that focus on a technology or a vertical industry, or going solo as analyst relations consultants or subject matter experts. This trend contributes to a significant rise in the number of ex-analysts and firms in the market.

According to Norma LaRosa, CEO of the Kensington Group, Inc., there are approximately 20,000 IT analysts worldwide. Kensington tracks 450 firms, more than double the number just two years ago.

The good news for vendors is that there is much more expertise available for a variety of prices, although the bad news lies in determining which analysts to focus on for Analyst Relations.

The key is influence. Some analysts who exit major firms continue to be influential with their long-standing IT customers. For this reason, although many vendors keep their subscriptions to the major analyst firms, they also contract with the individual or boutique analysts for feedback and the impact of their influence.

But for any analyst who leaves a firm, only time will tell if that person will continue to have influence with IT customers, or if their former colleagues or competitors will fill that role. The analysts who remain at firms when others depart may find that they now cover more vendors, answer to more clients and are responsible for a wider scope of technologies, covering additional topics beyond their core expertise.

So what is an AR pro to do in this environment? Some recommendations:

  1. •Don't just talk with the star analysts at a firm; include their lesser known colleagues within the same subject matter area. They may be "A" players soon.
  2. •Develop a program for bringing new or junior analysts up-to-speed on your company and products as soon as possible. Ask the analysts what information they want to receive and how they want to receive it. Ask what reports the analysts are working on and provide relevant information.
  3. •Remember that AR is a relationship business, not just a marketing program. The analysts' value goes beyond the data they analyze and the trends they spot - it's also the people they know and what they say to them. What analysts literally say to their customers one-on-one can be more important to an IT purchase than what they write in reports to their subscribers as a group. Similarly, the quality of the relationship you build with analysts can be more important than the data you share.
  4. •Prepare your AR staff and briefing team, especially senior executives, for the fact that they may be dealing with someone less experienced and less knowledgeable about your company than in the past.
  5. •Consider using the services of independent analysts or boutique firms, especially if your company or budget is small. If an analyst had a stellar reputation among customers while at a larger firm, the individual may continue to have sway. Regardless, these analysts can still provide vendors with valuable analysis and feedback.
  6. •If you use independent or boutique analyst firms, monitor their influence with your IT customers and prospects. Ask buyers which analysts influence their purchase decisions - their answers may change over time. Notice which analysts continue to have influence or impact when they are no longer part of their former firms' brand. Are the analysts still in touch with vendors? With IT customers? Can they add value to your AR program? To your product development, market research and marketing?
  7. •If you are a customer of analyst firms, monitor the quality and frequency of the reports that cover the technology segments and vendors you are interested in reviewing, as an end-user consumer of research and as a marketer of products. As a customer, you have a right to make requests for better, broader or deeper research.
  8. •Negotiate for better rates as a customer, especially if you are dissatisfied with the quality of the reports or the exit of key analysts. Analyst firms need the revenue. It's cheaper for them to keep you as a customer than to replace you.
  9. •Remember that although the firms and the people change, your AR purpose remains the same: positive influence.

1 comment:

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