Larry De’Ath’s Top 10 Best Practices for Analyst Relations

(Our thanks go to Steve Keifer for writing this appreciation of Larry De’Ath, who died this time last year. Steve outlines Larry’s views on analyst relations, which were always notable. I first came across Larry in 1999, when he was at Merant, but really got to know him in 2004 after he joined GXS. It’s a pleasure to bring his insight to a wider audience.)

Last April, Larry De’Ath, a good friend and colleague of mine passed away.  I had the opportunity to work with Larry for a little over four years during his time at GXS.  Larry had a number of things he was extremely passionate about – the RIM Blackberry device; drinking Diet Coke; golf trips to Thailand; Chinese history and culture; and most importantly, his two daughters.  But at work his passion was concentrated on analyst relations.  Before I met Larry I had never really given much thought to the function of Analyst Relations (AR).  To me, it was just one of those things that the Public Relations(PR) team did in addition to their core purposes of issuing news releases, seeking media coverage and shaping public opinions about the firm.   But to Larry, AR was the most important aspect of corporate communications.

It is amazing how when you meet someone who is very passionate about a particular hobby, subject or career, how that person’s enthusiasm can shape your opinions as well.  Such was the case with AR and Larry.  Through my work with Larry, I gained a newfound appreciation for the complexities of AR.  And I learned how someone who is highly skilled in the AR trade can generate significantly higher ROI from analyst firms and broader market influence.  AR is really about building relationships with people and attempting to influence their thinking on topics relevant to your company.  I think one of the keys to Larry’s effectiveness with AR was the fact that he held sales roles earlier in his career.  As a result, he had strong relationship building skills and he knew how to sell ideas.

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Having had one year to reflect on the lessons I learned from Larry, I decided to put together a Top 10 list of the Best Practices in AR he advocated.   My list is below, but I would encourage those of you who knew Larry personally to add your own comments as well.

#1 – Separate the research function from the relationship function
There are two primary functions related to analysts within technology vendors.  One function is primarily inbound and research-oriented, focused on reviewing secondary market research for the purposes of competitive analysis, market sizing and SWOT analysis.  The other is primarily outbound and relationship-oriented, focused on briefing analysts on new product releases; corporate strategy and customer case studies.  Larry believed that although the two functions were closely related and interdependent, there was also a logical segmentation between the two.  The process of analyzing the research and supporting inquiries from within the organization can be quite time-consuming, handicapping the ability to perform important outreach activities.  Consequently, Larry always recommended a clear division between the responsibilities so as to avoid any competing priorities.

#2 – Centralized management of corporate communications programs
Larry believed in centralized management of AR out of global headquarters.  Even regional activities local to Europe, Asia and Latin America, he thought should be coordinated centrally.  In fact, Larry advocated that not only PR and AR, but also Investor Relations (IR) should be owned by one group.  However, for public companies, Larry recognized that IR functions require a direct reporting relationship to the CFO to be credible.  The benefit of centralization was to ensure consistency and mitigate the risk of mistakes.  Larry also believed that maintaining relationships with analysts was a key function that should not delegated to an outside firm.  Consequently, he frowned upon the use of specialized, external agencies.

#3 – You can never have too many people at an analyst briefing
Larry viewed the role of the AR manager as a facilitator.  His job was not to be the expert on every aspect of the company’s products, customers, financials and strategy.  Instead, he viewed his role as providing analysts with access to the most knowledgeable subject matter experts for various disciplines.  He was not afraid to ask for time commitments from executives to ensure that each and every question an analyst had during a formal briefing could be adequately addressed.  Consequently, it was not uncommon for Larry to gather ten or more people in the room for an important briefing with a single Gartner, Forrester or AMR analyst.

#4- Invest strategically in Tier 2 research firms
Many marketing executives are tempted to concentrate all analyst focus on the top 4 firms (Gartner, Forrester, IDC and AMR).  However, Larry always sought to diversify his spend.  He would reserve a healthy percentage of his budget to fund other analysts he viewed as strategic, even if they did not have the brand name, reputation or reach of the Tier 1s.  For example, Larry was a strong advocate of firms such as Yankee Group and Current Analysis.   One of the key benefits Larry advocated in working with Tier 2-3 firms was the flexibility they could offer for custom market research, joint public relations and contracted marketing services.

#5 – Demand high-performance from the analyst account teams
Larry took his role very seriously and expected those supporting him to have an equivalent level of commitment.  If he believed he was not receiving adequate service Larry would not hesitate to escalate his concerns until the issues were resolved or a new point of contact was assigned.  Many vendors are reluctant to complain about poor service from the client managers at the analyst firms for fear of negatively impacting vendor reviews.  However, Larry understood the analyst firms well enough to know that their primary concern was client satisfaction.

#6 – Understand what is important to the analyst both professionally and personally
Larry would make a point to understand how analysts were measured and what flexibility they had to work with vendors. He would then focus on ways he could help the analyst meet their targets for research publications or end-user client inquiries.  Not only did Larry understand the professional motivations of the analysts he worked with, but he understood their personal ambitions as well.  For example, he could tell you whether the analyst was planning to have any kids; whether they were planning to have surgery; or whether they were planning to buy a second home on the beach.  Sometimes he would call analysts with no particular reason other than just to say hello.

#7 – Shape the marketing programs budget to benefit AR
Most executives recognize the importance of maintaining good-relationships with a group of key influencers in the purchasing process is known.  However, they are also cautious about committing too much budget to AR functions.  Larry was always creative in finding ways to supplement the core spend levels he maintained for research and advisory services.  One of the strategies I always admired was how he was able to leverage other marketing programs budget to effectively increase the total spend he committed to key firms.  For example, Larry would use analysts to judge customer awards programs; facilitate customer advisory councils; and present at executive planning sessions.

#8 – Advocate for the analysts internally within your organization
Larry recognized that the AR professional’s job was not only to advocate for his company with the analysts, but also to advocate for the analysts within his company.  Larry would hunt down customer references to ensure that his analysts had adequate end-user engagement.  He would proactively engage product managers to obtain pre-briefings for analysts on new product launches.  If an analyst was visiting headquarters for an on-site briefing, he would schedule a 1-hour briefing that anyone on the management team could attend.  All of these activities helped to increase the visibility of analysts within the company and supported efforts to justify continued investments in the AR programs.

#9 – Get executive face time
Larry believed strongly in providing one-on-one interactions between analysts and the CEO, CFO, CTO and other key executives.  This practice was a win-win scenario for the AR group.  The analyst valued the privileged access they were being provided to top level management.  And the executives enjoyed hearing both positive and negative feedback from the analyst firm.  The C-level sponsorship often resulted in much greater level of attention being applied to the issues, risks and challenges identified by the analyst.  As a result, Larry could then follow up with the analyst to demonstrate how their feedback was taken seriously.

#10 – Treat vendor evaluations like a multi-million dollar RFP response
Larry placed an incredible amount of energy and focus towards vendor evaluations such as the Gartner Magic Quadrant and the Forrester Wave.   He understood clearly the link between strong performance in analyst rankings and the competitiveness of the sales team in major accounts.  Poor placement on the Magic Quadrant or Wave could result in being excluded from RFPs from major clients.  Conversely, strong placement in the Leaders category along with advocacy from the leading analyst covering a technology segment, could be a key factor in winning large deals with multi-national customers.

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