A crucial element in the IDEAL process model for analyst relations is driving performance. This requires goals, operational resources and technique and insight into the context. In a nutshell: More insight is needed to develop focussed, self-confident AR practitioners; resources and tools to manage AR performance are needed to share knowledge and drive activity, including intranets and CRM systems; Finally, insight is needed into the rationale for AR, the realities of the analyst work, and techniques for influencing analysts worldwide
1.] Goals are certainly the most complex of these, and there are two strongly differing approaches: one focussed on metrics and the other on schedule and plan effectiveness.
- The metrics approach is certainly simplest. This approach asks: “are we contacting all the analysts we want to?” and “are analysts doing what we want them to do?” These are not bad questions, but they are hard to answer with a single linear numerical score. Typically, firms taking the metrics approach are focussing on one or two simple measures: such as counting either how many analysts they are breifing per year, or how many analyst quotations or reports they are mentioned in. The goal is to maximise the number.
- The plan effectiveness approach is based on the approach of allocating analysts to different service levels, and is harder because it requires numerical estimates of the importance of each analyst. This approach involves planning out the non-discressionary AR activity (events, time allocated to working with sales or communcations colleagues) and then calculating the discressionary effort available for outreach. This effort is then allocated between the analysts in line with their relative importance, using service levels as a guide. Interactions with analysts are them measured according to the effort involved. The ‘actual’ number is then compared to the ‘allocated’ number and the difference (the average residual) is measured. The goal is to minimise the difference between where effort should, and is, being allocated.
2.] Resources and tools span a wide range. There are five key elements: intelligence about the analysts; a contact management system; a calendar, materials and spokespeople. Much of this can be managed through a PIM suite like Outlook or Mozilla – or though more powerful tools.
- Analyst intelligence can range very widely, from the sort of tracking systems that firms like CARMA, Lighthouse and Investor Dynamics have developed, through to databases of analyst profiles of the type offered by the AR Intranet, Analyst Profiles and ARchitect.
- Contact management tools are essential. The best databases like the ARchitect (which is aimed at larger AR team, and is focussed on US analysts) and the AR Intranet have contact management tools built in. CRM solutions like salesforce.com, ACT! and SAP (which once advertised an optional AR module) can also work well. I’ve seen build-it-yourself appoaches works very badly.
- Calendars of analyst events are also available in most AR databases, and there are some additional services, like our AnalystAgenda product, which tracks upcoming research.
- Materials for analysts should useful be held separately: either as a series of bookmarks, shortcuts as as an actual document repository. This accellerates effective re-use and allow you to offer a self-service extranet more easily.
- Spokespeople need to be selected and prepared. That is a challenging business, especially outside the US, where analysts expect (and vendors deliver) greater candor.
3.] However, all of this requires AR professionals who understand the context and work of AR enough to be able to work independently and confidently. In particular, we have seen AR tasks delegated to spokespeople, marketers or PR professionals who fail because the time is not taken to give them that insight. They have four principal information needs, which we cover in our foundation course in AR which we will hold this March in San José, CA, New York, NY, and London, in the UK.
- How do analysts work? What is their daily life like? Understanding the different types of analysts and their different client bases is essential.
- What is the impact of analysts? Understanding how analysts influence buyers, suppliers, stakeholders and the media helps establish the seriousness with which analysts should be taken.
- What is the analyst landscape? This is a fast-moving industry with large regional and sectoral differences. Many vendors dangerously underestimate the extent to which the influence of analyst firms differs across countries and markets.
- What influences analysts? Many analysts will tell you that either nothing influences them, or its the supply of data. It’s more accurate to say that intangibles (relationship, candor and reputation) are more influential than tangibles like financial stability or functionality.