You’re either interesting or you’re not: Don’t pay analysts for briefings

In one scene of ‘What Women Want‘, a recovering chauvinist advises a colleague about her relationship: “I mean, you’re either interesting or you’re not. Ask him to decide.” The same dilemma, and same guidance, faces managers who invite analysts to briefing events and get invoices in return. AR professionals need to push back against firms that want to bill vendors for attending briefings. Paying analysts for briefings undermines analysts’ abilities to advise their clients, and produces clear ethical issues for vendors and analyst firms.

Unlike advisory days (in which insight flows mainly from the analyst to the vendor), the flow of information at a briefing is primarily from the vendor to the analyst. If the vendor’s information is relevant to the analyst’s research, and the vendor is significant to merit enough attention to justify attending the briefing, then an analyst should be there whether or not the vendor is a client, let alone whether or not the vendor pays extra. Analysts need to allocate their time in line with their clients’ interests. If a vendor isn’t interesting to the analyst (or to their clients), then it’s a waste of the analyst’s time and the vendor’s money to bring the analyst in.

Instead the vendor should be focussed on seeing if there’s other information that’s more relevant to the analyst that is not on offer at the briefing (perhaps the vendor is relevant, but the analysts doesn’t expect valuable information) or if the analyst should lower down on their ranking.

Analyst firms place themselves in difficult positions when they attempt to bill clients for meetings that they would not charge non-clients to attend.

  • They are penalizing clients for being clients and rewarding non-clients: that acts against their long-term interests.
  • Furthermore by not attending the events of vendor clients who cannot justify paying for briefings, they erode their relationships with vendor clients and make the value of the relationship less clear.
  • A deeper challenge is presented when the firm refuses to attend the briefing unless it is paid. It sets up a clear indication that vendors that are clients of analysts are written about more: that should make other clients skeptical that the research analysts produce is independent of their commercial relationships (In particular, end-user clients will become skeptical about the independence of an analyst firm that only needs vendors who pay).

PS I’ve expanded this post (with the text in brackets).

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9 Comments

  1. Alan Pelz-Sharpe May 7, 2009 Reply

    Wow, and I thought I had heard it all! Who sends out these invoices, which firms would do that?

    Goodness, when one of our vendors get’s us to turn up – and we insist on paying our own transport, food and accommodation they must think its Christmas 🙂

    Best
    Alan

  2. Duncan May 7, 2009 Reply

    Alan I am also struck by the cheek of it. But what’s amazing is that one or two of the firms that are best known for their independence are seen to be working in this way from time to time. Sometimes, of course, it’s the kind of punitive pricing we discussed here: http://www.analystequity.com/?p=1192 and the analyst really doesn’t want to, or need to, attend. In that case the vendor should accept the analyst’s judgment that they are not an appropriate person for the event. But can you seriously imagine an analyst firm saying to you that they really want to attend your event but, because you’re a client, they will have to bill you to attend the briefing?!? It’s really at the edge of reason.
    Duncan.

  3. I have personally received conflicting responses from two separate analysts who work for the same firm. The first analyst, much like Alan describes, does not ask for anything and covers his or her own T&E. While the second analyst (again same firm) asks for his or her T&E to be covered as well as they wanted to bill me for their time.

    Duncan makes an excellent point, you immediately re-evaluate how important that analyst is to your business (and conversely how important they perceive you to be).

  4. Editorial June 4, 2009 Reply

    It’s interesting to see how few analyst firms seem to have a explicit policy on this. In a discussion with a few Forrester executives attending the IT Forum in Berlin one said to me: “we don’t expect to be paid” for briefings. It’s good to hear one more firm making such a clear policy. However, Forrester and other firms are more likely to ask for travel and expenses, normally the hotel and transoceanic flights.

  5. Enrique Carrier June 5, 2009 Reply

    Duncan,

    As an analyst, I think your point is very interesting (and also revealing). An analyst shouldn’t bill for attending a briefing. It is supposed to be something of interest for us, and if it is not, then we shouldn’t attend. Period.

    But in the case of travel and expenses, I expect them to be covered. There are two reasons for this: I am attending to hear what the company has to say to me, so in a way they are giving me a pitch. Second there is the “opportunity cost”. Is this briefing more rewarding than any other activity I could be doing at the same time and with the same investment? An this time frame and costs start from the very moment I live home or office to attend this briefing, which in my case, being latinamerican, is not a neglectable cost (it usually involves an overnight flight plus at least a couple of days at my destination).

    If someone is going to change its opinion or analysis because they payed for travel and expenses, then he/she is REALLY cheap (not to mention really unprofessional), in which case I would be surprised if he/she has any clients at all.

    PD: Sorry for my english, it is not my native tongue, so I hope there are no misunderstandings.

  6. Dean Whitehair June 5, 2009 Reply

    I read this with interest since I’ve never paid for briefing. However, I do pay travel for analysts who are invited to attend our analyst events. To make it clear this is for travel and expenses, I require them to make arrangements through our travel office and no other invoices will be considered. Never had any problems with this.
    Recently, however, I DID have a top tier analyst ask for a briefing on some new technology, then ask us to “book it as an inquiry” (Against our inquiry credits). I quickly contacted our sales rep and ensured that this was scheduled as a briefing. Anybody else had that expereince?

  7. Rick Sturm June 5, 2009 Reply

    Duncan, I agree with you completely. I find it outrageous that an analyst would have the chutzpah to charge for attending a briefing! Of course, in an industry that seems to reward outrageous behavior, perhaps it shouldn’t be such a surprise.

    Regardless of whether it is with a client or non-client EMA never charges for participation in client briefings.

    Most of the briefings that EMA does are by phone. The real challenge with phone briefings is deciding how often to brief with a given company. In general, we will brief with any company if there is *significant* new information. (That determination is made by the analyst.) Beyond that, clients are able to schedule briefings at any time – that’s part of the relationship. Routine briefings with companies that are not clients are usually limited to once per year.

    We do attend vendor analyst briefing events. Because of the time commitment (typically 3-4 days, including travel), we are more careful to evaluate whether or not it will be a good use of the analyst’s time. An invitation is not guaranteed of acceptance. However, that said, it is rare for an EMA analyst to decline an invitation to a briefing event. Sometimes, many analysts are invited to the same event. When that happens, we carefully consider how many actually need to attend.

    Our practice is to never bill clients for our time when we attend analyst events. Because we are located in the middle of the US, travel to either coast can cost as much as a flight from Europe to Boston or New York. Therefore, we do allow vendors to cover our travel costs.

    Continuing in my agreement with Duncan, when the main purpose of the meeting is for the analyst to advise the client, charging for an analyst’s time is entirely appropriate and that is our practice.

  8. Merv Adrian June 15, 2009 Reply

    Analysts should not charge to listen. We are expected to stay current, and if you have something to tell us and you matter (by size, because you’re “interesting”, because our clients are asking about you) we should find time to do so.

    By the same token, if you;re looking for advice – more than a few quick reactions to a briefing we just heard – you should be willing to pay for that – it’s consulting, not a briefing.

    Will it cost me to listen? Yes, my time is worth something, but the investment in our relationship matters to me, so I will find time. Will I need to spend money to travel and stay in a hotel? Then you should cover that cost. And understand that I might not want to attend a 3 or 4 day event. That does begin to cost me in time terms.

  9. Michelle Warren June 17, 2009 Reply

    Wow…I’m simply shocked that anyone would consider billing analyst time for a briefing. Isn’t there a sense of professional decorum that would prevent that action?

    I echo the thoughts and good sense of my colleagues above. Transportation and expenses (if the briefings require traveling, of course…) are often covered by the vendor. But my time? Time well invested in learning about their business, in my professional opinion.

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