What are the right staffing levels for AR?

There’s been an interesting conversation recently on one of the LinkedIn groups I belong to, and as the participants kindly gave me their permission to do so I thought I’d post it here for everyone’s benefit.

Gregg LampfIt started with a question from Gregg Lampf (AR + Marketing Director at SafeNet):

Are there any rules of thumb or recommended staffing levels for dedicated AR people in companies?

Marc Duke (independent, blog)  answered “1 in EMEA but it depends on size/scope or role and or if it involves mkt intelligence“.

Robert Eastman, MBA, CIARP Robert Eastman chipped in:

One of the better resources that I have seen on this is the book by William Hopkins (of the Knowledge Capital Group), Influencing the Influencers. You should really read this book to get the full color and context of their model. In short, however, the rule of thumb that this book proposes is one AR person for every 2-3 major business initiatives. It would not surprise me if the Institute of Industry Analyst Relations, Sagecircle, Lighthouse Analyst Relations also had some advice or insight here. I would enjoy hearing what you find out. Could you share?

Efrem MallachAR guru Efrem Mallach added some good insight:

Firms tend to get a full-time AR professional when they reach annual revenue of about US$100 million. This is an average. Individual situations vary widely on both sides of this figure depending on the specific company situation. From there up the number grows, again very approximately, as the square root of revenue. A company would have about two FT people in AR at an annual revenue of $400 million or thereabouts, three at $1 billion and so on. This is a straight line on a semi-log graph.
These figures come from looking at a lot of companies in many areas of high-tech, plotting the two figures (annual revenue and analyst relations FT equivalent headcount) on a graph, and fitting a curve to where they cluster. T
hese are broad averages. You have to look at the breadth of a firm’s product line, how it breaks down vis-à-vis typical analyst practices, its geographic scope, who it sells to, its typical price points (they affect how much analysts influence its sales), etc., etc…, to come up with an appropriate number for a given firm. There is usually good business justification for spending more on AR than most firms do.

Ludovic Leforestier I agreed with Efrem:

It’s a decreasing curve that tends to flatten out at 1/$b revenue.
This said, the product mix is important: you need more AR managers for companies having a diverse s/w portfolio with a wide footprint, less for h/w typically.

So the best way to go is actually starting from the goals and the audience:

  • if the goal is to support sales directly, then 1 AR manager cannot follow more than 15 Tier I analysts (and that’s a big task).
  • if the job is more marketing oriented (producing white papers, doing more 1:many events) then this ratio can increase.

Tim O'SullivanTim O’Sullivan (EMEA AR for Deloitte) added:

I agree with Robert – all depends on what is important to the company. I would be loathe to make a recommendation based on revenue in anything except an affordability discussion (can we afford 1 more AR). The thing with revenue if you hire a new AR pro (even if you are a $1BN Revenue company) and they close 10 analyst related deals in a year worth $50M then you can afford it. Ludovic is correct about the product mix but services appears missing from the list – a diverse services based organisation would need a substantial team imo. Map the AR team objectives back to the strategic goals of the company – that shoudl give you a fair idea of what is important and allow you to structure a set of programs to support the corporate goals. Once you have these programs (either topic, geographic or some other structure) then you will have a fair idea through an AR Audit how many analysts you have to cater for and what your tactics are and therefore what the team size should be. Given the imoportance of AR and the different approaches in different companies I would be careful following rules of thumb and reccommend due dilignece and planning as the most prudent way to proceed.

Bob SakakeenyBob Sakakeeny (product manager at CA) gave another point of view:

If the average analyst impacts $2.3 million in revenue per year, with customer facing analysts more and vendor facing analysts less, then analyst relations’ staffing decisions can be disconnected from the company’s current revenues. An opportunity cost analysis helps management understand what they miss out on by not staffing AR rather than trying to figure out how to afford AR. Although AR has a statistically greater influence on customer decision making than PR does, companies still pour money into PR visability rather than AR effectiveness.

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IIAR hosts Silicon Valley meeting

IIAR is hosting a Silicon Valley meeting on January 21 at Cisco’s headquarters in San Jose.

Sage Circle’s Carter Lusher will kick off the meeting with a presentation that reviews 2009 trends in the analyst ecosystem and a look ahead for 2010. Following Carter’s presentation, I will provide a brief update on IIAR initiatives. Cisco has kindly agreed to host cocktails at the end of gathering.

If you plan to be in the area and would like to attend, please RSVP directly to me at peggy.oneill@analystrelations.org by January 15.

The British Are Coming! Datamonitor stalks Gartner analysts

Datamonitor’s truck rolled around the Gartner headquarters in Stamford, CT, this morning. The firm’s Ovum’s business is aiming to hire, and the hoarding on the van asked analysts to send their resume in. As Greg has argued, Datamonitor may have to work hard to get Gartner analysts’ attention: and it seems to know it.

Register for the Gartner Analyst Relations Webinar on January 7th

Gartner will be hosting their quarterly AR call on the 7/1. They usually make a good update –this time it will be focussed on AMR –a good time to get answers to all the questions asked on the blogs recently: on the IIAR blog (you read it there first!), but also on Analyst Insight, Analyst Equity, Sage Circle, Technobabble, Spend Matters, ARcade, Supply Chain Matters, ITasITis, MGI Research.

In passing, on the “why” question, someone told me it might well be to send a signal to investor that Gartner was doing “something” –a quite interesting theory and I would say probably the smartest reason I’ve heard so far.

Anyway, here are the call details –courtesy of Gartner.

Gartner Quarterly Analyst Relations Webinar
Dear Colleague:

As promised during our December 3 webinar about the Gartner announcement of its acquisition of AMR Research, Inc., we are planning an update for the AR Community on the Gartner and AMR integration.

We’ll be holding a special webinar on Thursday, January 7, 2010, for the Gartner AR Community where we will update you on our overall perspectives and begin to discuss key integration details. We’ve invited back both Michael Yoo, senior vice president, Gartner High-Tech & Telecom Programs, and Peter Sondergaard, senior vice president, Gartner Research, to share their perspectives on progress to date on both the Gartner and AMR Research team and the Gartner and AMR High-Tech & Telecom offerings integration.

Michael and Peter also look forward to fielding your questions on the integration. We encourage you to send them in advance to arcommunity a t gartner d o t com and we’ll add them to the webinar discussion points.

We hope you will join us!

Thursday, January 7, 2010
REGISTER HERE
7:30 a.m. San Francisco
10:30 a.m. New York
15.30 London
16.30 Paris, Berlin, Frankfurt

Please note: A replay of the webinar will be available on the Gartner AR Community page on gartner.com within 72 hours.

Sincerely,

Jeff Golterman
Group Vice President
Gartner High-Tech & Telecom Programs
AR Community Lead.

shim

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