AR classics: Developing an Ideal "Analyst Relations Process Model"

IDEAL AR audit
IDEAL AR audit

We continue to campaign about the need for an “Analyst Relations Process Model”. The basic idea is that there are five key activities in AR. Most firms are not addressing the complete set of tasks. Not all of them are reflecting common practice or best practice. Few have stable and repeatable workflow process. These three notions (compete; best; process) give us x, y, and y coordinates. They can be used to measure (and, by multiplying them together, quantify) the development of a firm’s analyst relations.

These are five elements which, from their opening letters, we describe collectively as IDEAL:

  1. Identifying analysts means knowing which analysts have an impact and being able to quantify that influence. With that, you can allocate additional resources to the analysts on whom your clients are counting. This involves tailored research: to understand which individuals are advising your clients at each of the key firms; more  understanding of the influence of those key firms; and a way to balance three different forms of impact: internally, directly on the market and indirectly on other stakeholders.
  2. Driving performance requires goals, operational technique and insight. More insight is needed to develop focussed, self-confident AR practitioners. Tools to manage AR performance are needed to share knowledge and drive activity, including intranet portals and CRM systems. Finally, insight is needed into the rationale for AR, the realities of the analyst work, and techniques for influencing analysts worldwide.
  3. Engaging the analysts is primarily about developing candour and exchanging information, not just operational technique. We believe that evaluation is crucial here: you need measurements to estimate how far analysts are paying attention to a vendor. Evaluation helps you to target resources into that engagement and generate greater analyst mindshare. Engagement also requires a deep understanding of the research and advisory work of the analysts. The only way to win them over is to develop a rich discussion that leads them to their own conclusions.
  4. Aligning effort is an active and dynamic process. We need to track and understand how analysts information needs are changing, and find out how to leverage other corporate resources better. Benchmarking changes in analysts opinions, deeply and competitively, is only useful if it’s done over time using repeatable and stable methods. Building AR momentum also involves reallocating resources in line with corporate priorities and opportunities.
  5. Leveraging insight from the analysts involves a number of tactics. Analysts’ research and comments can be tracked. Analysts can be engaged directly to obtain greater insight into our own companies’ directions. Mastering AR also involves increasing analysts’ value and profile inside the vendor organisation, and increasing internal, active support for the analyst relations programme.
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.