Managing an analyst relations crisis

In a recent post I discussed the aftermath of one of the worst analyst relations crises: when negative coverage hurts your business. I’ve had some great feedback on the post, especially from my ex-Forrester colleague Tina Murphy, and clearly need to say more.

Negative coverage can be especially hard to respond to in the rare situations where vendor-side analyst relations managers don’t expect it. The shock can be deep, especially because it is a common courtesy to share research in advance to vendors mentioned in research (both clients and non-clients). Of course, by no means is it an obligation on the analyst community: analysts are not legally bound or may be prohibited from sharing advance drafts of their research findings with vendors due to integrity policies. Sometimes, analysts are unable or prohibited from giving vendors advance notice due to their firm’s integrity policies.

The key message is that AR professionals need to focus on correcting factual mistakes first, and only then move to points of disagreement. We also need to clarify internally, to explain to executives that analysts write various types of research, some of which is pure analytical-based commentary and opinion, based on other key resources the vendor can’t control such as customers, the media, and other industry insiders. When it comes to controlling the crisis, it is just like a vendor that gets a bad product review in the media: if there are errors of fact, it’s a lot easier to correct those than an educated opinion about a company or its products and strategies. There is a similarly big difference between an analyst remark in one sentence of a brief, a presentation, a press interview, and a data-driven research report like a Magic Quadrant that includes a vendors’ competitors. Furthermore, issues in such research may be tougher for the average AR person to substantiate, especially if an analyst has been favourable to the vendor in the past.

Whether or not a vendor is not an analyst firm client or a major industry player, chances are they will have a harder time getting an analyst’s ear if they take a defensive, accusatorial stance. Vendors also need to be thoughtful about who they should contact first. Depending on the relationship, it could be the analyst or the research head, their own analyst firm account manager (if a client), or even the CEO.

The ideal solution will be for the firm to revise its research, but other firms can be convinced to conduct their own research on the same topic. Of course, other firms will be more likely to write something if a vendor is able to sponsor the additional research. However, it’s not always needed. For example, some firms will feel curious, if not compelled, by the topic if the erroneous research findings can be proven, and are of significant interest to their clients. That is why Giga would often publish research critical of Forrester’s research.

Of course, there’s another common issue that needs some delicate treatment: when, if ever, is it right to play the “I’m a big powerful influential vendor” card. We’ve been called in to some angry meetings with AR folks and VPs of major vendors who thought because an analyst firm has published disputed research, it has an obligation to not promote or publicize its findings until conflicts were sorted out. But in many cases, analyst firms stand by their research. Of course, this is a testament to their integrity.

Some analyst firms would say they would rather lose a vendor client than compromise their clients’ expectations of independent research. However, AR professionals at vendor companies also have the expectations of their executives to deal with. On occasion, this pressure leads them sometimes to threaten dropping the analyst firm. Our experience is that vendors simply cannot bully their way out of negative research. Such threats normally open a cycle of lose-lose recriminations.

In some circumstances, a better idea is for the company to licence the research, post it on their website or blog and produce a parallel analysis about the major points that the analyst got wrong. We have been in meetings with vendors who discuss the merits of this approach with analysts: their options include a press release refuting the findings, briefing key reporters, and basically doing all they can to make the research look bad. Of course, the right strategy for your company in a situation like this has to be consistent with its brand and internal corporate preferences.

Lastly, and just like any serious issue where there are elements that you might want to keep ‘under wraps’, both vendors and analyst firms should be careful not to write or say anything that they wouldn’t want to get out into the public and may regret seeing published later.

Duncan Chapple

Duncan Chapple is the preeminent consultant on optimising international analyst relations and the value created by analyst firms. As SageCircle research director, Chapple directs programs that assess and increase the business value of relationships with industry analysts and sourcing advisors.