NB This is a cross-post from the Buzz Method blog, where it was originally posted in November 2009 as the second in a series of articles on Analyst Relations basics. Please note that the views expressed within the article do not necessarily reflect those of the IIAR – they are the opinion of Dominic Pannell, founder of Buzz Method Ltd.
Before I get started, I’ve had quite a bit of offline feedback about the first post in this series – while I’d prefer people to post comments here, you can’t have everything in life!
One in-house AR who used to work in PR pointed out yesterday that for some IT firms, even getting on the radar of the industry analysts is of value, so perhaps I was a little harsh. While I accept his point, I contend that unless the initial awareness-raising is followed up with a systematic engagement programme, even a light one, it’s of very little real value in the longer term.
Which leads me nicely into today’s topic:
Level 2: AR as a Two-Way Conversation
Although it may not be obvious at first glance, this is a quantum leap from AR as PR.
Recognising the points in my previous post, effective AR teams work to build an ongoing dialogue with analysts so that the analyst is fully informed about developments and, just as crucially, execs are informed about the analyst’s thinking.
I recognise that best practice in PR is also to build relationships with key media thus making it easier to pitch a story, but a fundamental difference with AR is that the opportunity exists to create and maintain high quality conversations about a topic of shared interest over a period of time. Remember that, for the most part, analysts enjoy giving advice – that is, after all, why they became analysts – if they’re any good, their advice is worth taking. Companies that treat analysts as journalists are missing the opportunity to learn from experts whose opinions can have a direct impact on sales and market valuation.
Often (and I recommend asking analysts for their individual preferences) it is appropriate to establish regular briefing sessions – quarterly is common for large IT firms – during which analysts receive an update on what has been happening with technological advances and/or an overview of trading conditions (the latter may be limited by rules relating to financial disclosure). The quid pro quo is that most analysts expect to be asked for their take on what they have heard and on market conditions in general. Really comprehensive AR programmes will supplement these regular briefings with less formal executive contact in the form of telephone calls, ad hoc dinners, product demos, etc.
Of course contact shouldn’t be limited to execs only and AR professionals do get to know their analysts pretty well – I know several in-house AR leads who expect their teams to find out analysts’ birthdays and other personal data as well as learning more formal information such as briefing preferences. Bearing in mind the number of analysts that cover a company (ranging from a handful to several hundred) this requires a degree of effort.
Sure, it takes time, but the rewards can be huge.
From the vendor’s perspective, working closely with key analysts can be extremely productive and can certainly help avoid potential headaches. First of all, an analyst can provide feedback on, for instance, how stakeholders will react to a proposed strategy and she can confirm (or challenge) the company’s view of the marketplace. There is a point at which the analyst might suggest entering into a commercial arrangement if you need to pick her brains further, which is fine in the right circumstances, but it’s possible to glean a lot of information for free PROVIDED you’ve built up a relationship based on mutual trust.
The key point is that experienced industry analysts know a lot about the market. They spend a considerable amount of time speaking to industry players and analysing what they learn. Tapping into an analyst’s knowledge is a short-cut, a bit like running an industry focus group, but using a single person who has deep knowledge in his area of expertise. Too many people (and this includes everyone who practises AR as PR) see only one side of the analyst’s role – they see him as a channel through which they can push their messages out.
As I said in my previous post, this is missing the point.
Analysts thrive on dialogue – they need to be as up to date as possible with what is going on in their coverage area. This requires a continuous exchange of information. Sometimes this will result in a published report, or a webinar to a large audience, but more often an analyst shares her views when speaking to people – offline and behind closed doors. If you aren’t one of her trusted contacts, you won’t be able to hear what she’s saying.
Of course, reports shouldn’t be ignored as they can have a major impact on business performance, as ZL Technologies recently demonstrated by suing Gartner over its rating of the vendor’s email archiving products. I don’t know the details of that particular situation, but often disagreements of this nature can be avoided naturally by establishing a relationship with key analysts through regular, open conversations.
I know of numerous IT firms whose execs and AR leads have calls with key analysts prior to the publication of major reports so that they can input to the final document and/or check facts. In the words of one in-house AR I spoke to recently, “if you’re not seeing the reports before they’re published, you’re not doing your job.”
I should make it clear that this is not collusion. Of course, the vendor wants to be seen in the best light, but it’s in everybody’s interest to ensure accuracy. If an analyst were to produce a duff report, his reputation would suffer and his influence would be diminished. Besides, independence is the analysts’ watchword and must be respected, so fact-checking is not an opportunity for a company to game the system.
Can you imagine a company having this kind of relationship with a journalist? For the most part, I’d argue that it isn’t appropriate.
From the agency side, having a solid working relationship with a set of analysts is very useful. If you’re about to pitch for a piece of business, for example, isn’t it helpful if you can make a call to an expert to find out how your prospect is doing? Not just in terms of how effective they are communicating, but what their business looks like and where their strengths and weaknesses are perceived to be.
Speaking to an informed analyst allows you to provide the pitch team with insights that can transform their approach – if you know the analyst well enough, you may also be able to work out who you’re up against because your competitors may be speaking to the same analysts… if you’re reading this and you’ve lost to me in pitches but couldn’t understand why, go figure!
As well as helping their clients establish relationships with analysts and ensuring that information is delivered on time, logistics managed properly, etc, agency AR teams should also be listening out for competitive information that can help clients achieve their business goals. This intelligence may come via formal outputs, such as a written report – just as often, it will come from (you guessed it) conversations.
Next: AR Level 3 – where it really starts to become fun.