Which analyst firms really drive sales?

Most providers of technology services and solutions will find that a very small number of analysts will most of of the influence on their sales. Very often, we see that ten or fewer analysts at firms like Gartner, Forrester and the Datamonitor/Ovum group will hold 70% or 80% of the influence on sales.

However, there’s ‘long tail’ of hundreds of analysts who might be influencing your sales, especially where you sell through the channel. It’s important not to forget people in that long tail. Of course, the superstar analyst might be 50 times more important than the niche analyst for widgets, or the ‘go to’ analyst in China or Germany who you have not met. However, the superstar analyst gets 200 times more attention, and will harder to shift. Sometimes an hour spent with a second or third tier analysts will produce a greater total benefit because they are often deprived of high-quality information and discussion.

Generally speaking, we find that most AR effort is wasted because it’s not aligned to the relative importance of analysts to your customers. AR managers generally spend too much time speaking to firms that work primarily for other suppliers, like Current Analysis or Frost and Sullivan. In the remaining time, they often don’t give enough effort to the top tier. Quite possibly eight analysts have 80% of all the analyst influence on your business, but few AR managers are focussed enough to spend four days a week on those eight and spend the rest of the week on the other 100.

The need to focus on top analysts is general, and not absolute. The AR at one huge system manufacturer told they use the “80:0 principle”, by which they mean that they put all their effort into the top tier with 80% of the influence, and they just ignore the majority of analysts because they have much lower influence.

Everyone understand why that is probably a lesser evil than the alternative to treating everyone equally. However, it misses out on the fact that the long tail can be easier to influence than the  top tier. And it misses outout on a special challenge: influencing the channel.

Everyone knows that firms like IDC, Current Analysis, Pierre Audoin Consultants, Canalys get much more of their research revenues from vendors than they do from end users. That’s a good reason to pay them less attention. However, what if you sell through the channel? For example if you’re selling ERP or CRM software then the reality is that most of what the client pays for us services. That means the client chooses the services firm and the services firm recommends the software. If the services firm is getting its guidance from Pierre Audoin Consultants, then that’s a firm to focus on.

That’s why we think it’s important to think about both the direct influence that analysts have on end-user clients, and the indirect influence that the second and third tier have on the industry as a whole and on the media.

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 are 3 comments on this post
  1. September 03, 2010, 12:23 pm

    Interesting post-of course it depends what industry and geography you are targeting. Do you really consider Datamonitor/Ovum in the same tier as Gartner and Forrester with an influence on sales?

  2. September 08, 2010, 10:44 pm

    Hi Nancy, in our opinion it’s not effective to tier entire firms. We tier individual analysts. The most important analyst at Ovum is certainly more influential than the least influential analyst at Gartner.

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