You’re an innovative and growing software vendor, I get that. You’ve got a fab new product that’s going drive dramatic benefits for enterprise customers, I get that.You’ve even got a blog to push out great customer stories now and then, I get that too.
But how do you accelerate growth without piling on expensive sales guys? And how do you make it easier for the large corporates to find you and get comfortable placing big orders with you?
ANSWER: You create relationships with the analyst community. And here’s why.
Analysts are important
Analysts have the ear of people with the purse strings. When they speak, the C-Suite listens. When a company goes out to tender for a third party product invariably an analyst will be involved in the decision making process, whether directly as a result of a consultation or indirectly through a research paper. They are able to influence not only potential customers, but they also coach and advise your potential acquirer on their product strategy including which vendors to buy.
Being included in an analyst research note is worth more than 100 blog posts, column inches in the FT/ WSJ or exhibiting at the next xyz conference. You need the analysts, whether you like it or not, to survive in both the short-term and thrive in the long term because their word carries weight. If a customer refers to an analyst for a product shortlist and you’ve never engaged with the analyst you can guarantee you’ll never make that list no matter how mind-blowingly awesome your product is.
Analyst Relations (AR) can deliver far greater short term and long term tangible benefits than any PR campaigns. Yet many vendors start engaging PR before they even consider AR.
It’s never too early
It takes time to build a relationship with the right analysts that cover your product’s area. Let’s not confuse a relationship with meeting the analyst once or twice and fire-hosing them with your product pitch. You are aiming for a relationship of mutual respect, and that takes time to develop which is why engaging as early as possible is critical for survival for a startup. Done well it can position a vendor ahead of the short list in product selections and gain the attention of the leaders of industry, the media, and the competition. Poor (or no) analyst relations can result in your product being ignored by potential clients and it may limit your penetration in your existing clients
Being spotted by an analyst early on is major kudos for a small company but also for the analyst because they love to be the one who discovered a cool new vendors and write about them. And it’s also their opportunity to help you out and form part of your success. Analysts are no different from anyone else, they love being part of the action and have an ego to fuel. And again, it can’t be stressed enough, if they don’t know you neither will their clients when they ask about the market.
But they are expensive and we don’t have the time!
Certainly there are costs with engaging with analysts. Most charge an annual fee to be a client and have access to the analysts and research. But don’t think that you can buy your way to the top of a Magic Quadrant or Wave, or into the minds of the analysts. Or that paying for one or two consulting engagements with the analysts will do it. Think relationship, not prostitution.
Often it is the amount of money that vendors perceive they have to spend which stops them building a relationship with the analysts. The issue is most vendors spend too much money in the wrong places. It doesn’t have to be that way.
And apart from the hefty fees they ask you to sign up for there’s also the potential overhead of someone in an Analyst Relations role. Traditionally this is a new, fairly junior hire or it is outsourced to a PR/AR agency. Both of these lead to the wrong relationship being developed with the analysts, but it is a very common mistake.
Analysts need to be briefed on product functionality, but they are far more interested in customer stories. However, meeting or calls with analysts, understanding their needs and providing the information they need in the format that they want can be time consuming. They often feel like they are more difficult to deal with than clients. But they can afford to be as their influence and value is so much greater than even your best client.
What is required is a carefully crafted strategy and deep understanding of what drives analysts and how they operate. It also needs someone who has the ability and gravitas to engage them as peers and forge that professional relationship your company and product deserves. It’s not about booking appointments or grovelling for time. It is the role of a senior exec or founder who inevitably has other priorities – company operation, client sales or product strategy.
So how do I make this work?
Few senior executives have engaged with analysts or developed an effective analyst strategy. And with conflicting priorities they do not have the time or luxury to learn. But companies readily hire a Non Exec Director to add an external perspective, exercising their ancient Rolodex and to sit on a board. Their brief is often financial or governance and they offer pithy advice like “if you sell more and spend less”.
A more cost effective approach is to hire a Non-Exec Director or Advisor who understands Analyst Relations and can help shape the analyst strategy, coach the senior team on the best way to engage with analysts, and act as a sounding board for decisions. They will add more value to the business as your go to market plans are meaningless without the visibility in the market that strong analyst relationships will bring.
For the price of a junior in your AR/PR firm you can bag a NED or Advisor who knows how to tango with the analysts.
And then get a clear process for managing analyst relations, so that you can leverage that senior person’s time by enabling far more junior person to do a lot of the leg work.
In summary: Brains, not budget. And leverage the skills of others.