Engaging the analysts: strategy before tactics

Back in the 1990s, when people spoke about effective analyst relations they typically focused on organization, process and technique. Lots of companies had very disorganized analyst relations: today AR is better administered but one weakness has principally survived: many vendors are so focused on their messages that they are failing to anticipate or answer analysts real questions.

Of course, professional administration is key to strong analyst relations: central contact management systems are needed to that each interaction can be noted. These systems can help people prioritize their communications to analysts, pool expertise and ensure that influential analysts are not overlooked. In particular, contact management systems can help ensure that AR outreach is kept in balance: that effort is expended in accordance with each analysts’ importance to customers.

However, too many AR professionals are treated, and behave, as if they are responsible only for administration: not all are encouraged to think like spokespeople or to coach their firm’s representatives to meet analysts needs. In particular, we find that some AR people even welcome this unfavourable treatment, thinking that if they are relieved of responsibility for what spokespeople say, then they cannot be blamed for the failure of analyst relations to deliver.

Of course, AR manager get blamed for failure whether or not they take responsibility for it. Effective engagement is fundamentally about the information and not the logistics. Analysts reward firms that are candid and open — firms with great logistics but weak candor will not work effectively.

This means that effective engagement with analysts poses four key tasks to those interacting with analysts:

  1. Allocate your effort in line with the differing importance of each analyst to your customers.
  2. Prepare spokespeople to answer analysts questions [on strategy, go to market tactics, segmentation, financial and sales performance; the roadmap for future solutions; and execution of the roadmap].
  3. Develop the AR team as spokespeople, not just administrators, who can tailor messages and corporate information to best influence analysts.
  4. Ensure that both AR staff and spokespeople understand the individual specificities of each analyst — from cross-cultural issues through to research priorities.

Too many AR professionals are focused on logistics — and those are the managers whose jobs are first to be outsourced when the cuts come because such managers are adding little value to corporate performance. To succeed, engagement with analysts has to be seen broadly as the strategy by which analysts become progressively more comfortable about discussing, and eventually recommending, your firm in conversations with prospective buyers.

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.