Listen up! Analysts say analyst relations is getting worse

Over the last week I’ve been discussing the initial results from our Analyst Attitude Survey with clients. The general picture is pretty depressing. AR is in reverse and analysts are less likely to recommend firms than they were. Because analysts are getting more experienced and more cautious, firms must improve their ability to put strategic spokespeople into discussion with analysts.

Some of the findings are:

  • Generally, firms are putting more effort into analyst relations. It looks like a 5% or 6% increase. That probably reflects the more intensive working of existing AR teams, rather than more budget overall. In particular, the firms that were worst at AR have improved notably – especially Asian firms.
  • Spokespeople, and companies generally, are seen as being less candid. One firm, a manufacturing powerhouse, obtained the lowest score for candor we’ve ever seen in seven years of running these studies.
  • Most firms are slipping a little on their understanding of analysts’ research coverage.
  • Firms are substantially more proactive but this seems to be a trade off: AR teams in large firms are slipping in their responsiveness to analysts’ information requests (while the smaller teams are improving).
  • Analysts are getting more experienced. Almost two-thirds have been analysts for nine years or more – and that’s another way of saying that analyst firms are not firing ‘fresh blood’ and that staff turnover has declined.
  • There has been a huge decline in the availability of spokespeople, especially with firms headquartered in the USA.
  • Analysts have a huge thirst for information about firms’ strategy. Out of six key forms of information asked for by analysts, strategy was asked for more than all the others added together. Interest in some forms of information has almost disappeared.
  • Generally, analysts are getting less comfortable at recommending top vendors – after a long period in which confidence was increasing.

These are astonishing and important results: firms should be using the to sound the alarm to colleagues, and to spokespeople in particular. Contact us to discuss the survey results in more detail.

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