Credo 9: Seven reasons why committment drives AR success, but needs to increase

Credo

Our credo series seems topical this month. Analysts turn over in their research areas less frequently than analyst relations professionals, even if they change firms. They have long memories too. If you want to shift analysts’ opinions in your direction, then you need to be committed to a sustained and increasing effort to meet analysts’ needs. Lighthouse’s Analyst Attitude Surveys show a long-term experience curve, which shows that stable AR programmes improve their effectiveness year on year.

  1. The first element of this commitment is the transition from being self-interested in analysts to being analyst-centred, being committed to helping analysts meet their goals.  The vast majority of AR interactions focus on the one-way broadcast of individual announcements from vendors to analysts. Because analysts’ discussions with your clients are not focussed on news flow, but on the broad basis of your value proposition, this is mistaken. While announcements do play a valuable minor role in AR outreach, firms need a ongoing relationship with each analyst that is based on the analysts’ research interests rather than vendor news flow.
  2. Second, trusted relationships are needed with analysts if the business is to leverage analyst relations. Especially in the current slow-down, conversations with analysts are a vital method in identifying firms and segments that contain hot prospects, sales campaign issues, changes in clients’ perceptions of value, and information about what deal financing clients are taking up. That requires two-way conversation in which the vendor and analyst exchange and pool insight on the market. If you’re only pushing messaging, then you’ll not get to a free-flowing conversation.
  3. Third, relationships require the commitment to take time. Even though analysts and AR professionals work through projects, analysts use information and insight built up over a long period. That is even true of the largest research reports: if you wait until the report is being written, then you won’t really influence it. Around 25 analyst-days work goes into a Magic Quadrant, much of it reviewing data from vendors and end users. The context and the method are both developed in advance of the data collection.
  4. Fourth, because analysts’ views are deeply held, they take time to shift. The seriousness of commitment needed is even greater for firms that analysts see negatively, or have declining interest in. It takes months and years to bring an important analysts around. Indeed, in many cases the short time orientation of many vendors means it is better to simply ignore negative analysts and focus only on making neutral analysts more positive.
  5. Five, analyst identification trickles down internationally at a slow rate. It’s very easy to identify the most relevant analysts at large firms who lead the research in your area. However, it takes more time to identify, and build rapport, with the people below and behind them. Firms like Ovum and Datamonitor have offshore or nearshore research centres where the basic data used by many analysts are assembled. Especially in countries where English is not a dominant business language, local analysts who are not niche specialists in your technology will often take the call from your clients. Both these groups of people are hard to identify and harder to build relationships with.
  6. Sixth, the context for AR is one of increasing resources. Even in the last six months, in which some firms reduced their spending on AR, the overall impression of the analyst community is that firms are putting more effort into AR (that’s proven, for example, in our latest Analyst Attitude Survey). This increase is a combination of more effective AR teams, internal allies of AR being better at working with analysts, and better allocation of resources – and more spending worldwide.
  7. Seventh, while Forrester says IT spending worldwide will drop around 3% this year that’s a view based on the changing vallue of the US dollar. The deeper reality will be of a deeper deceleration in the US, Western Europe and Japan and a rise in most of the rest of the world. That means that vendors who want to influence markets where spending is growing have focus on Eastern Europe, Africa and Asia — and especially on the Middle East. AR teams need to refocus on those growth markets – with additional, local resources.

To discover how a more committed AR program can help your firm drive sales, ask for our free IDEAL AR Audit.

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