Analyst Relationship (AR) Management is an effective way to advance the go-to market of an organization. It is often a part of the corporate marketing functions whose goal is to professionally communicate to the right Market Analysts in order to attract large companies as clients. Especially when Fortune 1000 companies are potential clients of a firm; these companies generally rely on and respect the opinions of Industry Analysts (sometimes called Technology Analysts) before purchasing services or products. Organizations who want to win Fortune companies as clients have to found (or optimize) a strong AR Program.
Hereby, firms face several challenges on how to do the right things in the right way, e.g., what needs to be considered when establishing AR functions, how to find the “right” Industry Analysts to approach, what are the Best Practices to get the newest market understanding from them, and of course how to “sell” the company in the right manner to them to secure a good standing in comparison to other competitors in the market. This article answers such questions and will give you deeper insights into AR Management.
1. Who needs AR Management?
Once an organization’s target clients are in the Fortune 1000, potential deals with them are usually more complex and costly, and it is very difficult to approach them from scratch. And even if there is already a business relation with the target, the firm’s competitors do not sleep either. In this situation, Analysts can help. They have a lot of influence on such prospects as they have one of the best market understandings of the targeted products and services landscapes. Also, they are usually connected to the prospect’s end-user buyers and thereby have the power to make deals – or break them. Therefore, organizations targeting those clients should establish (and continuously optimize) AR functions to influence the market also via Analysts in regard to their own respective merits — simply put, to “influence the influencers”. It is apparent recently that many companies have already established such AR functions within their organizations. This usually happened within technology sectors, but related AR functions can also be identified in Telecommunications and Discrete Industries like Automotive and Aerospace.
2. The Analyst Market
Before going into detail on an organization’s AR Program, it is first necessary to have a detailed understanding of what Analysts do, and how the Analyst landscape looks like.
2.1 A day in the life of … an Analyst
The IIAR (Institute of Industry Analyst Relations) defines an Analyst’s job as “working individually or within a firm, whose business model incorporates creating and publishing research about, and advising on how, why and where ICT-related products and services can be procured, deployed and used“. When taking a deeper look into their activities (following an analysis of Duncan Chapple), their job is mainly about data gathering and analysis (26% of their work day), followed by Report writing, editing and reviewing (20%), engagement with vendor clients (18%), conference and seminars presentations (14%), engagement with end-user clients (12%), and finally working with the media (10%). Analysts sell their expertise and research to corporate end-users and to vendor companies who use the Reports and one-on-one consultations on market trends to assess the competitive landscape.
2.2 Analyst Firms
In the market, different types of Analyst firms exist — for example: Industry (or Technology) Analysts, Financial Analysts, and more. The focus of those Analysts can be extremely narrow, and they can influence each other’s market opinions, too. As stated at the beginning of this post, this article focuses mainly on Industry Analysts. These kind of Analyst firms started acting in the market a long time ago and make money by being technology experts. The three most famous Analyst companies in the world are: IDC (International Data Corp., founded 1964), Gartner (founded 1979), and Forrester (founded 1983). They not only dominant the U.S. markets but also have a very strong global presence.
In addition to these top 3 players, there are many more worth mentioning, like: GfK (Society for Consumer Research, founded 1934 in Germany), Pierre Audoin Consultants (founded 1976 in France), Ovum (founded 1985 in United Kingdom), and TechConsult (founded 1992 in Germany). These were mentioned mainly to show the reader the wide span of Analysts by foundation year and geography. Those Analysts are also usually smaller and quite often focus on niches. But there are also new global players rising like HfS Research (founded 2010) which even competes now with the aforementioned top 3 players. Such changes in the Analyst landscape have made it more difficult (compared to a decade ago) for organizations to handle the AR communications. As of today, the following table gives you a ranking overview of the current top Analyst firms by market:
Organizations who plan on approaching such Analyst firms should first understand this ranking; then they have to decide carefully which Analysts to target by respecting criteria like internal budget constraints, for example. Some stakeholders even recommend letting Analyst firms’ Account Executives know that they have competition for an organization’s budget dollars. In fact, there are a lot of strategies on how to choose the best Analyst firms for your company. Depending on the available resources, organizations often follow more complex strategies like for example a 3-tier-Level strategy to make sure they are giving the right attention to the right Analyst.
3. Building the AR function
When setting up (or optimizing) the AR function in an organization, it is important to understand and accept the demarcation between AR, Investor Relations (IR), and Public Relations (PR). IR is usually managed as separate function which handles investors like Shareholders and also Financial Analysts. Another function is the PR department which targets external communications like working with the press. Whereas, as stated at the beginning, the AR Team can be a sub-team of the marketing department, but not always: they sometimes also report to other corporate communications functions or even occasionally directly to the CEO. Besides founding AR functions in-house, it is also possible to outsource them to external agencies — like Knowledge Capital Group or Kea company, among others — who offer specialized AR support.
3.1 The own AR Team
Analysts have enormous market influence power, therefore successful AR Managers and teams should have excellent marketing and communication skills to enable their organization to match that influence. Typical specific tasks of an AR Team can be summarized as follows:
- Run the AR department and connect it to the stakeholders in the organization
- Evaluate the “right” Analyst firms to approach, depending on constraints like budget and Executive directions
- Establish AR processes for (ongoing) communication with the selected Analysts
- Collaboration with Marketing to secure commitment to AR activities
- Collaboration with selected Analyst firms, especially to support whitepapers and Research Reports (e.g., to do vendor briefings)
- Facilitating Analyst meetings also during events like Analyst conferences
- Manage internal budget, which includes purchasing Analyst research services (e.g., “flat” access to Analyst data)
- Management of Analyst Report calendar (covering key milestones like invitation deadlines, vendor briefings, events, etc.)
These responsibilities are an extract. All in all, the established AR program needs to get periodically reviewed based on traceable economic criteria to make sure that the return on investment in the program validates its existence and leads to beneficial results like additional business with large enterprise clients.
3.2 Communication with Analysts
In my experience, people in an organization likes to communicate directly with Analyst representatives for different reasons. However, it is better to have a central AR Manager in place who is in charge of deciding when to involve people from the organization outside the AR Team. The reason is that there are clear defined Best Practices on how to communicate with Analysts, e.g., when should the AR Team act reactive or proactive. When it finally comes to direct communication between the company and the Analyst representatives, it is simply a “give and take” situation: The Analyst representative (for example) needs details of an organization to better judge how to place it in the next Analyst Report, while the AR Team (including involved stakeholders) not only have to provide such data but also will try everything to position the organization as best as possible in comparison to the competitors. The team also has the chance to get deeper insights into their target markets by asking the right questions. A good sample set of questions to ask an Analyst include the following:
- Where do you see the market going?
- Who will emerge as the main players?
- Which competitor should I fear the most?
- What type of partnerships would benefit my product/company?
- What do you see as the primary strengths of my offering?
- What are the weaknesses in my approach, strategic direction, competitive strategy?
These example questions were defined by the “The York Group” (a technology consulting company also for AR), and should help increase the reader’s understanding of the many other potentials Analysts’ knowledge can bring to an organization, besides positioning the company high(er) in Reports and whitepapers.
Relations with Industry Analysts are a very important element in an organization’s corporate strategy when Fortune 1000 companies are targeted. Then, it is imperative to decide which Analyst firm to approach. Depending on constraints like budgeting, tier-3-level strategies can help organizations find the right balance for their Analyst landscape. It is also important to empower the AR Team to be the organization’s central hub that communicates with Analyst representatives, and connects any other relevant internal stakeholder through them.
All in all, a lot of market awareness can be achieved by positioning an organization in important external Analyst Reports and whitepapers, but this is not the only goal. Other valuable strategies include detailed knowledge of the markets — like competitor standings and new trends — which Analysts know better than other market players and therefore can help increase the time to market enormously. AR is not only a sounding board, it also brings true traction in expanding business within large enterprises like Fortune 1000 companies.