Lighthouse’s free IDEAL analyst relations audits are leading us into some fascinating conversations. The audits help you to review the principal features of effective analyst relations programs. At the end of the audit, we benchmark your scores against the best practice in the industry, to help you see where the biggest gaps are between what you are going and what you could we doing.
We’ve made a conscious choice to benchmark firms against best practice, rather than against the average scores. One reader has pushed back at us about that. He suggests that smaller firms can’t hope to even approach best practice, and instead they should aim to be better than average. The question is also posed of whether or not our approach will be demoralising: most firms will equal or exceed the average, but no-one will exceed best practice.
We remain convinced by our original approach, for five reasons.
- Quality not quantity. Best practice is about conscious control, not resources. We benchmark using our IDEAL methodology. We show how far you are optimising your AR through identifying analysts, driving performance using effective goals, engaging analysts, aligning effort and leveraging the benefits of AR. These show you the ‘inputs’ you are feeding into your analyst relations systems. Benchmarking against best practice does not mean holding 1,000 briefings a year just because a competitor does.
- Anyone can win. It is not only large firms that can be recommended by analysts. Analysts want to find solutions to clients’ problems. Vendor scale is only one variable. Small firms can be leaders. One client of ours was top-ranked by Gartner in its niche market despite having revenues under 50 million. If you can win, then aim to.
- The ‘close second’ still loses. Normally, only one supplier wins the deal. Even if a consortium wins a large deal, one firm really wins and the others make less profit. Most analysts follow seven firms closely. To be on the tip of the tounge every time, you need to stand out. Being slightly above average it not enough to win your way onto shortlists, especially if you are a mid-sized or smaller firm.
- Average stinks. Most firms don’t do their AR well. In particular, most are misallocating resources. Aspiring to average patterns also means emulating their mistakes. For example, should your firm be sending out average numbers of faxes and mailing out average numbers of press releases? No. You should be part of the minority that rejects ineffective tactics like these. Should your firm be sending our average volumes of pricing information and market analysis? No. Most firms fail to meet most analysts’ needs for this sort of information. You will build better relationships by aiming to meet analysts needs rather than emulating your competition.
- If you want love, buy a dog. The real objection to our approach is this: many people don’t like to be told the gap between where they are and where they need to be. Culturally, this is more specific to some countries than others. However, showing the gap honestly is key to giving AR directors the information they need to reallocate resources and to put the case for more resources. We have also read Love is the Killer App. On this particular terrain, however, we need to look our customers in the face, state things as they are, and not take the line of least resistance.
Clearly, it would be far easier for us all if we benchmarked against averages. Most people would walk away feeling they did well on some things and had a few areas for improvement. However, the reality is that the level of AR effectiveness is rising fast — and so are analysts’ expectations. AR directors certainly need to know where they have the biggest opportunity for improvement. However, they also need to understand the gap between them and the current winners. Benchmarking against also-rans turns you into an also-ran. Benchmarking against the best allows you to be the best you can be.