The following blog post is intended for the vendor and consultant community (though practitioners might find it informative as well, as it dispels some of the myths and secretive inner workings of the analyst world). In a separate post today, I'll tackle advice for how best practitioners can work with the analyst community. This blog is virtually reprinted from an article I wrote last year for my firm's online newsletter, Spark.
Analyst relations (AR) is a high stakes game of influence and relationship building. Companies that play it well can reap significant rewards. Those who don't can be punished. In mapping out their plays, many vendors and services providers operate on assumptions which are both false and potentially damaging to their company and marketing goals. To avoid the slings and arrows that cause so many causalities on the analyst battlefield, consider the following myths:
1) It's OK to take a short-term tactical approach to working with analysts
All too often, companies call firms that specialize in analyst relations seeking advice and help on a tour that needs to happen within four-to-eight weeks. While most understand that analyst briefings are a requisite piece of any marketing program, few seem to realize that they are only one component of the overall plan that is necessary to build relationships with key analysts who can influence market direction. Analyst relations is an ongoing, integrated set of activities that must be carefully planned and executed well in advance to avoid unproductive fire drills.
2) Throwing money at the analysts can help win them over
One of the greatest misconceptions about analyst relations is that tossing a few bucks to the major firms will ensure positive coverage and help build relationships. While it’s true that some firms operate on a pay-to-play model, most will willingly accept briefings and entrees from non-clients -- if the pitch and timing is right. But over time, organizations need to establish a dedicated budget to make analyst relations work. How much do you need to allocate to gain admission to the ballpark? It varies from firm-to-firm. Licensing a few research seats is a necessary first step. But it's just the ante to get into the stadium. In some cases, though, bleacher seats are good enough.
3) Our PR department or agency can run our analyst relations program
Giving analyst relations to an internal PR group or an external communications firm is probably the most common mistake made in playing the analyst game. The second most common is hiring an analyst relations manager with a PR background. PR is transactional in nature and focused on educating journalists who typically stay as far away from the trenches as possible. AR is about building relationships with intellectuals who often pride themselves on their depth of knowledge and ability to debate and build long-term relationships with like minded folks in the vendor community. A completely different skill set is required to perform these functions. As you budget and write job descriptions for analyst relations hires, bear in mind that the ideal AR professional should be able to get a job covering your company as an analyst at a major firm. And they should be paid accordingly. If you choose to seek external analyst relations help to supplement their own resources look for a partner with extensive experience and a track record of working with and influencing the analyst community.
4) Frequent briefings are enough to secure coverage and to build relationships
Don't discount the value of getting on a regular briefing schedule with the analysts. But it’s also important to realize that briefings are only one part of building relationships—and probably the least crucial part at that. It’s critical to get to know the analysts who cover you outside of the office. Invite them to drinks, dinner, and events and get to know them—not just their research. Sometimes a few beers can go further toward building relationships than a $20K investment.
5) Buying research and seats is the best way to spend money with the analysts
Savvy marketing organizations that play the AR game well develop an in-depth understanding of the analyst compensation structure at all of the major firms. In virtually all cases, the $50K spent to access a firm’s research never reaches the analysts who cover you. There are far more creative, cheaper, and effective ways to compensate the analysts you want to reach than buying research or licensing seats.
6) When in doubt, let the executive team lead the briefings
While they may light up the board room, founders, chairmen, CEOs and other top executives can be carpet bombers when it comes to dealing with the analyst community because they are too close to the subject and ill-equipped to deal with any potential criticism. The collateral damage that founders and untrained CEOs can create around analysts often outweighs any benefit they may create. Of course there are those select few founders and CEOs who can be magic in front of the analysts. If you're fortunate enough to have them, use them liberally. Just don't parade out execs for the sake of doing it. Regardless of who conducts the briefings, be sure to invest in analyst training and practice this training before giving these briefings (note: This training is not the same as press and media training).
7) We should outsource content and thought leadership to the analysts
On occasion, licensing analyst reports to post on your web site or use in a lead generation program can be effective. In other cases, hiring a firm to conduct a third party analysis quantifying the benefits of your solution is useful. But the secret is out about engaging analyst firms to write whitepapers that rubber stamp your company and solution. Such pay-for-play efforts should only be a small part of your overall marketing content and thought leadership, as they are viewed as largely suspect. It's much more effective to publish and develop your own thought campaigns that can influence prospects, customers, and analysts alike.
8) Briefings are a one-way street to inform the analysts about us
In most cases, the best use of briefing time is to create a two-way conversation that encourages interaction rather than just education and preaching through a rigid slide deck. In fact, if your relationships are solid with the analysts prior to the briefing, they should already be somewhat familiar with much of the subject matter that you are presenting, so that you can elevate the discussion and focus on gaining insights and feedback.
9) Analysts can help us with our positioning and market messaging
Analyst firms are always looking for new sources of revenue, and a few have branched out into dishing marketing advice. Smart vendors will politely decline any additional, fee-based services analysts may offer to review and recommend messaging and positioning (unless, of course, there is a really exceptional analyst who comes from a marketing background or who really gets the sector from a market-driven perspective). Why? Most analysts have never been marketing executives (or if they were, they were the academic and esoteric kind) and while they're often in touch with market needs from an end-user perspective, they're rarely good at distilling this knowledge into effective messaging. It's fine -- and a great practice -- to test your positioning and messaging with analysts before launching a company or produce. Hence, work to bring them on board in the pre-launch, rather than having them lead the effort from the start. But as noted above, this is one rule which does not always quite hold. However, it's a good general rule.
10) When a research firm calls to discuss our capabilities as part of a study, we should answer all of their questions
It's a little known fact that you can hire analyst firms to do your competitive intelligence dirty work. Yes, even the most "objective" firms will carry out competitive intelligence projects to benchmark your capabilities against the market, speaking with competitors and gathering critical intelligence to share directly with you. In some cases, vendors have hired analyst firms to confirm detailed feature / function check lists for use in patent suits, and have submitted the findings as evidence of infringement. So next time a firm proactively calls up and mentions a study that they're conducting and requests information from you, think carefully about how the information they're gathering will be used—and ask them directly if the research is being sponsored by a third-party before responding.