A Closer Look at Analyst Relations

6 August 2002—Many services organisations underestimate the impact that the analyst community can have upon their fortunes. Yet a consistent, integrated programme used to build strong relationships with analysts can yield great results in terms of both brand awareness or favourability and real sales opportunities.

Gerry Davies, co-founder of European analyst relations specialists Tiger Lily (www.tigerlily.uk.com), stresses that "It's the industry analysts such as Gartner, Forrester, and IDC who have the highest impact on sales today. This is because of their independent, objective interpretation and evaluation of information, rather than the factual knowledge they dispense."

ITSMA's own research on how clients choose has shown that analysts are regularly rated as an influential source of information, and some of our members are now investing more in Web-based techniques to complement their analyst programmes, creating special portals on their Web sites specifically for analysts, and adding special newsletters and alerts.

Davies adds, "Just one analyst recommendation during the customer's buying cycle can translate into millions in revenue for a vendor. Likewise, analysts' advice and counsel can assist service providers in creating competitive advantage and compelling offerings."

The key to success with this stakeholder group, as with any other, lies in having a long-term, positive relationship with the right analysts. This involves proactive and constant contact with key analysts, aiming to influence how they think about your company and your market position.

Davies suggests that this process begins with an open, honest, and realistic assessment of the current status of the relationships you have with analysts and where you want to get to. This assessment allows you to develop a credible programme integrated with your marketing strategy. She provides the following top tips for companies interested in improving their analyst relations:

1. Practice the 80 / 20 rule.
The starting point to influencing analysts lies in understanding the analyst world. What are their respective strengths, weaknesses, and coverage areas? What types of influence do they possess? The answers to these questions will help you judge the value of your current relationships and set realistic goals for an effective analyst relations strategy.

Don't forget, you can achieve 80% of the results you seek in terms of market influence by focusing your time and resources on the top 20% of influencers. EDS has recognised this statistic and is creating formal tiers for analysts, offering what are essentially service-level guarantees for different tiers (for example, top-tier firms will receive calls back within 24 hours, second-tier firms within 48 hours.)

2. Don't assume analyst relations (AR) is like public relations (PR).
Building long-term relationships with analysts requires specific AR resources plus the commitment of senior executives to spend time with key analysts. Focus on the quality of interaction with these influencers rather than the quantity of mentions, which is the typical PR evaluation style and is not appropriate here.

3. Involve the analysts.
Focus on developing a relationship with the more strategically oriented analysts that enables them to become advocates and advisers. For example, industry analysts can play a vital role in validating your value proposition before you take it public. This one-to-one dialogue can also provide an opportunity to uncover competitive and market insights to aid your go-to-market strategy, highlighting how your offer solves an organisation's business problem better, cheaper, or faster than the organisation itself or your competitors.

4. Take a European perspective.
Companies seeking to influence sales of services and solutions in Europe will need to establish relationships with industry analysts in Europe. A common mistake firms make is to assume that as most analyst firms are headquartered in the United States, they need only worry about the U.S. analysts. Dialogue between local analysts and your senior executives is absolutely essential for credibility in Europe, so be prepared to communicate with analysts in languages other than English.

5. Don't assume a subscription buys you coverage.
Purchasing a subscription will not guarantee exposure, and many companies that do not subscribe receive more than adequate coverage by the analysts. You can't buy analyst coverage, but research subscriptions do provide an opportunity to engage with the analysts, to help establish or develop your relationship.

Successful cultivation of the analyst community will lead to your company being put on shortlists and mentioned as a leading example during conversations, teleconferences, speeches, and published research—all of which can lead to greater awareness and consideration among buyers.

—Bev Burgess, info@itsma.com

Please note: In the ITSMA Europe Update released in July, entitled Amplifying Service Reputation to Build Brand Loyalty, we drew attention to the importance of industry analysts in helping to grow your reputation and create brand equity.

About ITSMA
ITSMA specializes in helping companies market and sell services and solutions more effectively. As a membership organization, we provide research, consulting, and training to the world's leading technology, communications, and professional services providers to generate increased demand, strengthen customer relationships, and improve brand differentiation. ITSMA is based near Boston, and has offices in London and Tokyo. Learn more at www.itsma.com.