Arbitrage for Tech Analyst Relations

Arbitrage tactics can help your analyst relations team to profit from other people’s mistaken valuations. My research at the University of Edinburgh Business School shows vendors generally over-allocate their time in three ways.

  • First, they overestimate both impact and scale of the major analyst firms (which employ half the analysts) and underestimate the others.
  • Secondly, the resulting contestation for the attention of analysts at major firms means that, with a fixed amount of effort, you can lose net influence and impact by ignoring the other analyst firms.
  • Third, in their interactions, they lose value and relevance because they don’t sufficiently focus on the information that competitors struggle to share, and instead give information that’s self-important to the vendor but not highly valuable to the analysts’ success.

I shared my thoughts about this, in conversation with my CCgroup AR colleagues Nadya and Pedro, in a webinar for our clients.

The result of these misallocations produces some interesting effects, as I show using data from the Analyst Advocacy Study. These data show the communication volume and frequency of 50 of the largest analyst relations programs with a balanced, representative sample of analysts internationally.

  • Some analyst firms are relatively neglected, despite their influence. I was surprised to see that niche leaders like ARC, Aite, and CCS Insight were not getting the attention I would have expected.
  • Analysts in some countries are relatively neglected, such as Brazil, Canada, and China.

To punch above their weight, analyst relations programs should consider this neglect. Given the choice between two equally impactful analysts, it makes sense to pick the ones your competitors spend less time with, so that your communication has longer latency and more value.

Duncan Chapple

Duncan Chapple is the preeminent consultant on optimising international analyst relations and the value created by analyst firms. As the head of CCgroup's analyst relations team, Chapple directs programs that increase the value of relationships with industry analysts and sourcing advisors.