Analyst relations professionals will be discussing the rise of the boutique, with a panel of small analyst firms, at June’s IIAR forum. Since boutique is a French word, it’s worth reflecting on CXP (perhaps the best-known ’boutique’ firm in France) and the notion of a boutique (just a euphemism for SME, or must it reflect real specialism?).With thirty-five years under its belt, CXP is best known for its Ovum-style software evaluations. It has a highly structured and detailed approach towards the comparison of software solutions which reflects the extensive data sufficiency needs to French managers (a functionality-based approach). CXP makes little effort to simplify its research, in the style of the Anglo-Saxon firms which have developed easily digestible summary tools, like the METAspectrum, Decision Matrix, Magic Quadrant and Ovum Navigator… but a “major” inside project is on its way to reach this objective.
Because of its roots in Europe’s second-largest economy and its trustworthy methods, CXP has been a natural partner for international partners. Most famously it started a partnership with META Group in the mid-1990s. After META’s closure by Gartner in 2005, and Gartner’s faltering in France since then, CXP and other firms adapted to French sensibilities have had good years. The strong growth opportunities in France mean that CXP has not been under pressure to find international partners, thus avoiding the time-consuming management discussions which result from firms discussing translations, shared methods and pooled data. After tough times following the slow-down in the first half of the decade, it is solidly in the black. As a result, CXP is today open to any international growth strategy.
CXP has been successful in many of the ways that larger firms has failed. It has a highly successful events business. It’s able to provide end-users with highly detailed information coupled to long-term consulting partnerships, but also give vendors highly efficient service. Freed from the burden of the stock-market, the firm offers customers excellent pricing. While other firms, event Gartner, have struggled to grow their advisory, inquiry, conference and community services, CXP has developed all of these though Consulting CXP, Service Expert CXP, Evénements CXP and its Salon IT.
What does all of this tell us about the notion of a boutique? What’s the difference between a niche leader, to take Porter‘s term, and a firm that simply happens to be small but cannot build the differentiation and price premium needed for real brand equity? Certainly, there are general observations which we made in our post about how to build your own boutique.
- A boutique is built on a unique approach or deep domain expertise
- Deep insight is the basis on which advisory and consulting services are offered
- They obtain their revenues mainly from buyers, not suppliers
- They often start from a buyer demographic, such as a national market or a industry focus
- They have an obsessive focus on execution.
CXP certainly has those traits, and so do other successful businesses such as Arab Advisors , CMS Watch, Penteo and Orbys. Other analyst firms, which are small but don’t share those traits, face a much more challenging struggle to build their brand equity.
P.S. Some additions to the original post are shown in italics.