AR Classics: Influencing the Influencers (2001)

Analyst relations programs: Influencing the influencers

[Brodeur News, the information service of what was then the world’s largest high-tech PR agency, published this article in November 2001.]

Who are the analysts?

With worldwide technology spending on the wane, companies are becoming increasingly cautious when buying from high tech vendors – or investing in high tech companies – and are turning to market analysts for advice.

According to analyst watchers at The Kensington Group, market analysts now influence 40 to 60 percent of commercial high technology sales. In fact, analysts generate over US $3 billion in worldwide sales each year and can play a key role in the success or failure of technologies and vendors. A favorable placing on one of The Gartner Group’s mystical “Magic Quadrants” gives vendors real credibility and often serves as an entry ticket to dozens of other analyst “shortlists.”

Journalists, too, are growing increasingly reliant on analysts, turning to them for neutral comment when writing news stories and features. And even the vendors themselves are tapping into the analyst pool, using analyst insight to plan product strategy. It’s easy to see, then, how an analyst who “gets the story wrong” can have a devastating impact on a particular vendor.

If you lead a technology company, you simply must work to develop strong relationships with analysts and ensure they understand your business, your products and your industry. Knowing “who’s who” among analysts is the place to start.

Who are the major analysts?
Gartner towers above the rest of the analyst houses in terms of size and influence: it is a billion-dollar business in itself. Gartner is a generalist company, with expertise spanning a number of areas. Its presence is ubiquitous globally and extends through a number of acquired companies including Datapro, Dataquest and Inteco.

Below Gartner are dozen or so large international analyst houses, each employing 300 hundred or more people and with bases on most of the continents. Most are headquartered in the US but expanding rapidly into EMEA.

For example, AMR, Datamonitor, Giga, Forrester, Frost and Sullivan, IDC, Jupiter, Meta and Yankee Group all have substantial research and consulting centres in Europe. Another major US analyst, Aberdeen, has just started to build up a presence in Europe. In the last few years, two European analyst houses have also joined this super-league. Ovum and Analysys have both built global companies from their UK bases. Ovum, for example, now has offices in five continents.

There are also dozens of influential nationally-focused analyst groups. These are typically companies based in one country – like RHK or Seybold in the US, Butler and Bloor in the UK or Yphise and CXP in France – or with narrow technical specialities such as Business Intelligence or EuroLAN Research.

It’s not enough to have strong relationships with local analysts; in a global economy, tech vendors must also forge relationships with analysts in other countries. Never assume that because Gartner “knows you” in the US that its UK-based analysts, for example, will too.

What do analysts sell?
The potential for reaching existing and potential customers through analyst relations is enormous.

Most analyst groups offer a wide choice of options for clients. Typically, their services are built around a subscription-based service, costing anywhere from tens of thousands to millions of dollars annually. Additional payments depend on analyst access and a variety of program subscriptions.

Usually clients receive a selection of market reports, news-based services with analyst comment, and access to analysts over the telephone or via the Internet. Further, but more costly, advisory services are available from some companies for awkward tasks such as negotiating contracts with suppliers, making technology investments, pitching IT system budget requests to superiors and so on.

All analysts seek the same thing – the loyalty and trust of corporate users who subscribe year after year. So the information analysts supply must be accurate and comprehensive. The analysis must be seen to be fair and independent.

Why analysts relations programs are important
Many companies understand the elements of a successful public relations program – and the benefits. The key to developing strong analysts relationships is remembering that technology analysts are a very different audience than journalists, equity analysts and customers. Smart high tech vendors understand that analysts require additional in-depth and primary information in order to be able to write detailed industry analysis and reports. It is vital that they are treated differently from the press. Analysts are interested in the bigger picture – not just the most recent product launch or acquisition. They want to know, for example, why the deal is happening, how it will affect the market and what your plans are for the future. However, analysts do not just need information with depth. Individual analysts– even in the same company – differ in their specializations and vertical market focus.

Analyst houses are simultaneously knowledge farms, rapid response centers, strategic guides and tactical consultants. Vendors and PR companies must be prepared to speak to analysts in these differing functions, moving from outside their knowledge to inside their confidence.

With a sound, strategic analyst relations campaign in place, vendors can quickly see the fruits of their labor. Helping an analyst “get it” can translate into increased awareness of your company and its offerings; belief that the functionality, strategy and core competencies of your company are as you express them; conviction that your solutions can add increasing value in the market as you and the analyst see it evolving; and adoption of your company by the analyst as a strong contender in your marketplace.

As your relationship with analysts improves, they will place increasing pressure on you for information and opinions. Their needs will become more specific and harder to meet.

But the return on your investment will be well worth the effort.

About the author
Based in our United Kingdom office, Duncan Chapple is Brodeur Worldwide’s Director of Analyst Relations. Prior to joining Brodeur in mid-2000, Duncan was a market analyst with Ovum, Europe’s largest analyst house. Over the last year at Brodeur, Duncan has managed pan-European analyst relations activities for more than 20 Brodeur clients.

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.