How to gain from four major changes in analyst relations

Lighthouse’s analyst attitude surveys give us a deeply insight into the mood in the analyst community. Looking over our recent interviews, we have seen four trends developing in the first half of the year, which produce major challenges for AR managers. In this post we’ll discuss these four major changes – and how to change your analyst relations tactics to take advantage of them.

Analysts are getting more skilled
Analysts are getting more experienced. There is less turnover in the industry, and thus the average length of time as an analyst is growing fast. That is changing the terrain of conversations towards the strategic implications of change. Analysts are still collecting data, but the more strategic level of analysts interests means they need to relate to vendors at a more senior level.

Relationships are eroding
The core to effective analyst relations is a strong one to one relationship between an analyst and a single point of contact in the vendor organisation that has primary responsibility for meeting that analyst’s information needs.
Analysts appreciate that over the years the resources and availability of AR managers and of spokespeople has become more limited and more targeted on fewer analysts. However, that means that the number of analysts with whom each vendor is really building close, 1:1, relationships with, is falling. Some analysts says a few vendors are like a “firewall” or a “black hole”.
Many analysts describe a trend towards the one-way broadcast of corporate news, in which the items of interest to the individual analyst are not flagged up or set into the context of the analyst’s research. Much of the remainder is not useful to the analyst.
Of particular important to analysts is the need to respond quickly to their information requests. In particular, analyst-driven interactions, in which the analyst is asking for information that the vendors have not already made public in some easily reusable form, are generally being responded to less well.
Of course, this is only a general picture. Some firms are improving.

AR is less able to function as a gatekeeper

At the same time, analysts have expanded their network inside vendors and end user organisations. That allows analysts to get the information more directly through informal means, or to get substitute data from other (such as channel partners, customers or competitors).
Because direct relationships are eroding, many analysts find that group or corporate level analyst relations teams are too controlling of the dialogue, but do not compensate for their control by providing enough extra information to encourage analysts to really stop circumventing central teams.

Increasing cross-cultural tensions
Many vendors have globalised their AR outreach, so that one AR manager leads communications for each division or product line globally rather than by multiple regional leads. This is effective for the vendor, since it allows role enrichment and a more effective division of labour. Analysts are not all comfortable with this.
Some analysts see the globalisation of their topic as a sign of less commitment to that topic in their own region. That view is not without reason.
Furthermore, the notion of building relationships across distance with people who you will rarely meet is not always effective. Some firms do give their AR managers the travel budgets and other support needed for them to build face-to-face relationships. However, more firms fail to understand that they there are additional difficulties in building relationships across cultures, and especially across the divide between more relationship-based cultures of the Latin, Arab and Asian societies and the more transactional culture in the Anglo-Saxon countries.
These are major challenges for AR managers, whose limited resources place them under great pressure. To find out how to respond to them and turn them to your advantage,  email [email protected]

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