Is an Analyst Relations Program Worthwhile?
By Peggy Tierney Galvin, Chief Strategy Officer
Analyst relations (AR) is one aspect of a larger communications strategy. But is AR really worth the effort? What do these firms do? What does a technology analyst do?
Here’s the nitty-gritty: These analysts bring their experience and expertise to bear as they evaluate your product or service and can help validate its viability – or not. You can use them as references for the press, as journalists may be more willing to consider your news if your company has the backing of a reliable analyst. You can also meet with analysts to test your positioning and messaging. Their perspective is so important that, according to the Institute of Analyst Relations, they influence between 40-60% of technology purchases.
Because tech analysts’ opinions are so important, many tech leaders assume that the bigger the analyst firm is, the bigger the impact. For instance, dialoging with Forrester analysts may seem like the ultimate goal, but this isn’t necessarily so. Below are tips for creating a successful analyst relations function, as well as insight on why a big-name analyst firm may not be best for your company.
Relating to analysts
What do you need to have in place to execute an impactful analyst relations program? First, you need understand what you stand to gain and what the analyst stands to gain. For instance, you are probably eager to learn how your solution stacks up against the competition. You are hoping that it stacks up near the top and that it will be top of mind for the analyst when people ask for recommendations. You want to see mentions of your product or service in the analyst’s social media posts and blogs, and you want a good placement in their research reports.
One of the tech analysts’ jobs is to stay current on all of the vendors, technologies and solutions in their area of expertise. Staying on top of all the latest developments enables them to provide clients with sound advice and recommendations. A strong analyst relations program entails reaching out from time to time to share news about your solution, market, partner, customer and corporate developments. This goes for the blue-chip firms and the boutique ones alike. This periodic outreach keeps analysts abreast of your value proposition and where you fit into the market picture.
In other words, you can develop a symbiotic relationship with analysts if you keep these things in mind.
Paid or free? Large or small?
Some analyst firms require a paid relationship, so you’ll need to be strategic about your choice.
The big-name firms offer wider validity and a larger audience, but they also come with a much bigger price tag. Think the Forrester Research and Gartner types of the analyst world.
For startups and mid-sized companies, it makes sense to work with smaller analyst firms first and eventually expand your AR program to include the larger firms. When you find a real analyst champion who understands what you offer and what you’re trying to do, you can get references for the press from this champion and even commission research reports.
A company’s figurative (and perhaps even literal) stock goes up when it places highly in one of the better-known analyst reports, which means there’s a lot of competition to obtain a strong position. That’s one reason why the firms that create these reports are so expensive. Eager startups may stretch their financial resources for a paid retainer, but even that is not a guarantee of a good review. In addition, marquee firms set stringent limits on where and how their name may be used – even if you commissioned original research from them. That reduces the reach and brand recognition you are trying to achieve.
This is another way in which smaller analyst firms are valuable. They are usually more open to collaboration and more flexible. They’re also more willing to provide feedback via technology briefings, even if you don’t have a paid relationship with them.
Analyze your options
You need analysts, and they need you. An initial analyst briefing means the opportunity to show key analysts in your vertical what you’ve got and if you’re a good fit for each other. If so, you’ll get greater brand awareness and street cred. For their part, analysts will get the most recent information on technology in the sector they specialize in, adding to their expertise. So, you’ll need to think strategically about how both parties will benefit from the relationship. Though it’s true that the larger analyst firm can exert greater influence, that brings a larger price tag and greater competition. Our advice is to start will a smaller firm and make incremental wins, then decide if a larger investment is warranted.
Ready to embark on your own analyst relations journey? We’ve worked with many clients to develop or strengthen their AR programs. Contact us to start a conversation about how we can help.