Heath Weber’s primer on Industry Analyst Relations

Heath Weber wrote this primer to sum up more than three years work leading Worldcom’s internal and external industry analyst relations program from 1999 to 2002. It prompted one of the first articles on Analyst Equity and, because we were disappointed to see that it’s now offline, we thought we’d republish it here.

The strongest principle of growth lies in human choice.
— George Eliot

He who has a choice has trouble.
— Dutch Proverb

The dichotomy of choice is powerful. Without choosing, one cannot grow, and yet when one does choose, trouble looms. Nowhere could this be more applicable than in the field of industry analyst relations (AR), where the choice to participate or not participate in an industry analyst’s research could make a vast difference in how a vendor is perceived in a given market. A technology vendor’s growth, positioning, and promotion are inextricably tied to whether it has created significant mindshare among analysts who cover its products, services and strategy.

In theory, companies should regularly update their core analysts about new or enhanced service offerings, products or strategies to maintain analyst mindshare. Regardless, however, of a vendor’s proactive nature, those core analysts or other non-targeted analysts will approach that very same vendor requesting interviews with executives regarding specific research that the analyst is currently conducting.

Mistakenly, corporate executives are often far too elated to fulfill these requests simply because they think they should be speaking with industry analysts, irrespective of the analysts’ background or agenda. Don’t get me wrong; they definitely should be speaking with analysts, but only if and when it makes perfect sense.

Unfortunately, there is no easy way to determine whether a particular inquiry should be accepted or declined. Listed below, however, are the most important questions that analyst relations practitioners should ask of the inquiring analyst to gain a better understanding of the researcher’s study, and whether an executive’s time is worthy of a meeting. The questions are not meant to be mutually exclusive nor exhaustive by any means. The answers, however, should allow analyst relations practitioners to make a more informed judgment about the value of participating in various research requests.

1. What type of research is this fulfilling?
There are typically five types of major research projects that industry analysts undertake:

  • an aggregate report discussing a certain space
  • a market review report that profiles the major providers of a technology and describes the business
  • an analysis that outlines one vendor’s product, service or strategy
  • an examination of a market in preparation for a conference/forum presentation
  • a custom/sponsored project commissioned by a company(ies), which dictates the research goals of the study.

Without a doubt, most vendors are thrilled to be profiled within an analyst’s report. It provides great exposure to potential and current clients and oftentimes (at least with major analyst firms) is reported in the press, which paints a smile on the face of your media relations colleagues. The other types of research, although not as promotional in nature, are still valuable, as a vendor is still creating analyst mindshare. Remember, analysts write about 20 percent of what they know, yet they speak to their clients, the media, investors, and the government about the other 80 percent of their knowledge. Just because a vendor does not receive a “hit” in a report does not mean that it failed to educate or impress an analyst.

2. Can you send me a list of questions you plan to ask in the interview?
Would you buy a car if you could not look inside of it before laying down your cash? The same point holds true here. The analyst should provide you with a list of detailed questions or topics he or she would like to ask during the interview. This can only ensure you have the correct spokespeople on the phone armed with the correct information. Could you imagine the disappointment and frustration if you establish an interview between an analyst who wants to discuss the technicalities of product and a marketing executive who can only talk strategy? Don’t waste people’s time; always play Sherlock Holmes – investigate first. You might even expose an analyst hired by your competitor to gather intelligence about your company. Watson would be impressed!

3. What other vendors are you interviewing?
USAirways, United, Delta, Northwest. If an airline research firm produced a study highlighting the positive attributes of those carriers, do you think American Airlines would enjoy the fact that it was omitted? (That’s rhetorical, by the way.) Technology analysts routinely write reports or draft “quadrants” that discuss or position the major players in a particular space. Knowing which vendors the analyst plans to interview cannot only help you determine whether you want your company compared with other companies (does Mercedes want to be mentioned in the same breath as Yugo or BMW?), but this knowledge can also allow your team to formulate key messages that stress your competitive advantages. You do have a Competitive Intelligence staff, don’t you? Don’t you?!

4. When will the report be published?
Most technology vendors must continue to innovate and enhance their products or services to adequately contend with their competitors and give customers what they desire. Often, analysts ask for interviews only weeks before a vendor is preparing to publicly announce a breakthrough product or service. If the analyst has not been involved in the product’s or service’s attributes, positioning or marketing strategy – oftentimes via consulting sessions (another topic for another column) – then obviously he or she is most likely unaware of the upcoming public announcement.

The analyst, however, is requesting an interview within the week for upcoming research that will be published in two months – just a few weeks after your new product or service is debuted. Do you risk an inaccurate profile of your company within the upcoming analyst report for the sake of keeping your announcement guarded (often to the delight of your competitors), or do you arrange to share confidential information with the analyst to ensure your company’s profile is accurate when published? Every vendor handles these situations differently, and it often depends on the vendor’s relationship or lack thereof with the requesting analyst, but remember that research reports often stay “current” for upwards of one year. Like Hesiod said, “Observe due measure, for right timing is in all things the most important factor.”

5. Can you send me your bio and a description of your firm and its client base?
Would you feel comfortable handing over your life savings to a financial planner without speaking to him or her? Not a chance, yet company executives often speak about highly sensitive topics with analysts without knowing relevant information concerning the analysts’ background or their firm’s history and clients. When you are confronted with this situation, it is perfectly acceptable and almost necessary to ask the inquiring analyst for his or her bio, the firm’s mission and the type of clients to which the firm caters. Knowing these details can provide you with better information to advise your spokespeople.

How? If an analyst’s background is in marketing and finance, perhaps you may want to counsel your jack-of-all-trades spokesperson to steer the conversation to those principles and away from technical jargon. If a firm focuses its research on educating end-users, perhaps you should advise your spokesperson to speak to how your company’s products or services could increase a client’s productivity, but reduce their costs, rather than hyping the marvelous wholesale offerings your company provides. If a bulk of a firm’s clients are small, yet rapidly growing companies, you may want to recommend to your spokesperson that he or she stress the ease and quickness of the product’s or service’s implementation, rather than building up the product’s or service’s 8,000 attributes, which are only used by large enterprises anyway.

Again, these are just some of the questions you should ask inquiring analysts before confirming an interview regarding a product, service or strategy. Hopefully, the combination of answers you receive will help you make a more informed judgment on whether to participate in a particular analyst interview, and how you and your spokespeople should approach it. These interactions with industry pundits will only help you cultivate and maintain key analyst relationships, which is the cornerstone to a successful AR program.

Heath Weber is now Director, Marketing & Communications at WellPoint NextRx. He received his BS in communications from Ohio University and completed his MA in Journalism at Ohio State University. He is coauthor of The Use of Equivocal Messages in Responding to Corporate Challenges.

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.

There is 1 comment on this post
  1. April 17, 2010, 5:10 pm

    Thanks for this summary. Great questions to ask either to determine whether you want to brief the particular analyst and to be totally prepared if you do. We always prepare our clients with an up to date Bio of the analyst including personal info for small talk–since one of the most important points of working with analysts is to create a relationship with the analyst as a person.