Analyst relations is easily the most misunderstood function in marketing.
I’ve been involved with analyst relations — or AR — for over a decade, working on dozens of Gartner Magic Quadrants and Forrester Waves. I’ve experienced the impact that analyst relations, when done well, can have on growth. And I know how much time and effort it takes to do it right. It’s not witchcraft nor is it a simple “spend more / do better” formula.
It’s time to set the record straight, so in this post I’m going to debunk five of the most common myths I’ve come across. Well, turns out this ex-mathematician is not great at counting, so I’ll be dubunking a bonus 6th myth as well 🙂
- Myth #1: Analyst firms like Gartner are “pay to play”
- Myth #2: Your PowerPoint slides matter
- Myth #3: Gartner is the only analyst firm that matters
- Myth #4: You can move the “dot” in a Gartner Magic Quadrant
- Myth #5: Just becoming a Leader in an analyst report will double/triple/10x your growth
- Myth #6: Your PR firm can manage analyst relations
Myth #1: Analyst firms like Gartner are “pay to play”
Okay, so let’s start with the big one. No, they aren’t. Let’s kill this myth once and for all.
No matter how much money you spend on things like research subscriptions, strategy days, webinars, or events — you can’t buy your way into analyst reports and rankings. Companies who complain about “pay to play” are just bad at analyst relations. There, I said it. I’m going to focus on Gartner to debunk this myth, but the same concept applies to all of the major analyst firms I’ve worked with.
Consider the story of NetScout, who once tried to sue Gartner using the “pay to play” myth. NetScout wasn’t happy with its placement in a Gartner Magic Quadrant(MQ) a few years ago, claiming that:
Gartner has a ‘pay-to-play’ business model that by its design rewards Gartner clients who spend substantial sums on its various services by ranking them favorably in its influential Magic Quadrant research reports (‘Magic Quadrant reports’) and punishes technology companies that choose not to spend substantial sums on Gartner services.”
NetScout argued that competitors who spend more with Gartner ranked higher, and that Gartner salespeople implied that spending more money would improve their position in the Magic Quadrant.
Here’s how the Magic Quadrant works in a nutshell: Gartner evaluates vendors using a proprietary methodology honed over decades of research. Analysts apply this research methodology to form conclusions about vendors and markets, in a peer reviewed process. Magic Quadrants categorize vendors into one of four quadrants based on Gartner’s assessment of them in two dimensions: Ability to Execute and Completeness of Vision.
In this case, Gartner identified NetScout as a Challenger, pointing out feature gaps in their product and negative customer feedback. NetScout, of course, thought it should be a Leader and sued Gartner. The case never went to trial and eventually the lawsuit was dismissed for the obvious reason that Gartner is protected by the first amendment and Netscout couldn’t prove any malicious intent. Gartner is paid very well by its customers for forming a strong opinion based on its methodology.
Gartner analysts could care less how much you spend with Gartner, and there are firewalls in place to make sure even the appearance of a conflict of interest are minimized. Could a Gartner salesperson have hinted at a connection between investment and MQ positioning? Of course. I’ve never experienced it, but even if it happened, an organization of NetScout size knows better.
Now, time to contradict myself. There is indeed one case where it does help to pay — you should really consider purchasing an subscription, sometimes called a seat.
Every analyst firm I’ve worked with will encourage you to provide regular briefings — whether or not you are a customer. These briefings are a monologue not a dialogue, but they are a free way for startups / category creators to get some mindshare without the cost of a subscription. The minute you have evidence of product-market fit you should be doing this at least once a quarter.
But if you are in a market with a Gartner Magic Quadrant and/or a Forrester Wave, or if there’s likely to be one, then you should consider purchasing a subscription. A subscription provides you with access to all the written research from the analysts, and more importantly it lets you schedule “inquries” with them to get direct 1–1 feedback.
The single best thing you can do to improve how analysts view your company is to help them map your company and products to their vision for a market. To do this, you first need to understand what’s important to each analyst you speak with — the language they use, trends they see, and specific product capabilities they deem important. Once you know this, you can frame your communication in a way that directly speaks to each analyst, using customer references as validation points (more on references later).
Any vendor in a big enough market to warrant a Magic Quadrant is likely able to afford a Gartner subscription. Yes, subscriptions are expensive, but so are many marketing investments, including paid acquisition and events. Doing well in an analyst report can be one of the best ROI investments you’ll make.
The TL;DR is this: there’s value in paying for an analyst subscription to gain more access to analysts. It’s not required, but probably a good idea for a lot of companies — just like investing in Adwords or events is probably a good idea for a lot of companies. But beyond a subscription, paying more to analyst firms doesn’t move the dot.
What does move the dot? Your customers. Which brings us to the next myth.
Myth #2: Your PowerPoint slides matter
Wrong, sorry. Analysts see right through hyperbole laden BS messaging, Nascar logo slides, and highly produced demos with more special effects than a Michael Bay movie.
Look, analysts are see thousands of PowerPoint slides a year and unless you are Steve Jobs, chances are your slides aren’t going to impress them. What analysts do care about is the strength of your customer references. This is basically all that matters.
Sure, regularly update analysts on your company, positioning, messaging, pricing with PowerPoint slides. All good foundational stuff. But analysts are forming their opinion on you through their interactions with customers, both the references you provide directly, and the daily interactions they have with their client base. Analysts are digging deeply in your company and product through the lens of the customer. How much value have they received? How difficult was the implementation? How’s your customer support?
If you really want to really improve your position in an analyst report, stop worrying about creating better slides and instead worry about creating better customers.
Myth #3: Gartner is the only analyst firm that matters
No way. There are lots of analyst great firms who offer tremendous value to both vendors and end-user customers.
Of course everyone knows the obvious names like Gartner, Forrester, and IDC. They cover lots of markets and buyer personas, and produce the popular vendor reports that get CEOs and boards exited ie. Magic Quadrants and Waves. Vendors spend most of their time analyst relations times with them, and I think that’s a mistake.
It’s often the more boutique analyst firms who offer more insight and value. These firms often have a narrower focus and are able to dig more deeply into a specific market. For example, there’s no one who knows digital experience better than Scott Liewehr from Digital Clarity Group (see related posts). Scott personally travels hundreds of thousands of miles a year to speak with the companies and agencies who implement digital experience technology. When a CEO or CMO in this market really need to get to the bottom of something, the first call they make is to Scott.
Another example is David Menninger, who covers data and analytics for Ventana Research (related posts). Dave’s background as both an analyst and (recovering) product marketer at bunch of successful tech companies gives him a unique perspective that many analysts don’t have. As a former vendor he speaks my language and provides good insight on messaging, positioning, competitive dynamics, etc.
There are lots of other firms like Digital Clarity Group and Ventana Research who serve more specialized audiences. My recommendation is start first by researching the specific analysts who are closest to the customer in your market, not the just the analyst firm they work for. Otherwise, you’ll be missing out.
Myth #4: You can move the “dot” in a Gartner Magic Quadrant
This is one of my favorites! Sorry, but this never happens. Let’s start with a quick overview of the Magic Quadrant process.
A new Magic Quadrant kicks off with an email to all of the vendors Gartner thinks are candidates for inclusion. Vendors are provided a specific set of criteria, and then asked if they think they meet it. Gartner vendor feedback combined with their own knowledge to come up with a final list of vendors to evaluate. Each of the vendors is provided with a long set of requirements and asked to provide reference customers. Each vendor is then given an opportunity to present to the analysts for 60 minutes or so. This process takes 2–3 months start to finish. Gartner then compiles all of the findings, going through an exhaustive process over an additional 2–3 months or so.
And then that moment when you get the email from Gartner with “FACT CHECK” in the subject. Sit down. Breathe. Open the email, and you’ll see where all the dots landed!
Careers can be made and destroyed by this one email. Exceed expectations and you are a forever a hero to your CEO + board. Do poorly, and well sadly I’ve seen people fired. True story: I once fell out of my chair and ran around the office screaming when I saw that Acquia had become Leader in a Magic Quadrant. Pro tip: you can’t tell anyone about it your dot position during the fact check stage, so make sure you have a good story already worked up 😉
Regardless, no matter where the dot lands, no amount of arguing, pleading, or begging is going to move it at this point. Gartner makes this crystal clear in the fact check process, but it doesn’t stop companies from trying. Take an any analyst out to dinner, and you’ll likely hear stories about all the irate phone calls they get from CEOs who are furious over the dot. I’ve been told it’s badge of honor when analysts get these calls from the likes of Larry Ellison and Marc Benioff.
Look, Gartner doesn’t care that you just crushed Q2, or that you never lose the the competitor who is ranked well ahead of you, or that you just raised a $100m Series C from every top-tier valley VC. They only care about their methodology. I’ve worked on a couple dozen Magic Quadrants over the years and I’ve seen a vendor dot move exactly once during the fact review process. Even then it was by such a miniscule amount that you’d barely notice it, unless you obsess over things like this like I do.
The time to move the dot is well before the Magic Quadrant process started. If the result isn’t what you hoped for, take the feedback, swallow your pride, and get started for next year. Whatever you do, don’t be that company whose CEO makes the angry Friday 5pm call. It’s not going to work. Send them this post.
Myth #5: Just becoming a Leader in an analyst report will double/triple/10x your growth
Hopefully, but usually not even close. Being a Leader helps revenue growth for sure, but maybe not as much as you think. Even then, it takes a lot of work to make the growth happen.
Jeff Mann of Gartner (LinkedIn, @jeffmann) once put this fake Magic Quadrant together as an April fools joke, but there’s indeed some truth to it.
The implication is that buyers prefer Leaders, ignore Niche, and are wary of everyone else. To prevent this, Gartner and other analyst firms have standard disclaimer language that encourages buyers to look more closely.
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
Of course buyers should look beyond Leaders, and they usually do. It’s highly unlikely that your requirements directly map to the ranking methodology used by analyst firms. Often buying from a Leader is the worst possible decision you can make.
But being a Leader in an analyst report will absolutely get you on more short lists, which itself can be good or bad if you aren’t prepared. For example, when Ektron became a Magic Quadrant Leader in 2012, it got us into a whole bunch of new opportunities against much bigger competitors like Adobe. It completely changed the dynamics of our sales funnel. Deals were bigger, but took longer to close and were much more competitive. It was overall a huge net positive, but success didn’t happen overnight, and we still had to work hard at it.
It’s great to be a Leader in a Gartner Magic Quadrant or Forrester Wave, and companies who make it in for the first time should be very proud. It’s a huge PR moment. Your CEO, board, and investors will love you. It’s a good morale builder internally. But make sure you set realistic expectations about the growth impact it will have, and make sure you are prepared for the changes that will happen to your business as a result of it.
Myth #6: Your PR firm can manage analyst relations
Probably not, it’s a different skillset.
I’m sure there are some PR firms who are better at this than others, but in my experience, treating analysts as just another influencer channel is dangerous. I recommend two things if analyst relations is really important to your company.
- An executive should own it directly and consistently. Too many companies delegate AR far down into the organization, especially as they get larger. In my experience, having one executive own AR over a period of many years builds the sort of trust it takes to influence how an analyst thinks about a market.
- Always involve founders or whoever is the actual thought leader at your company in as many analyst interactions as possible. Analysts want to hear from the most credible sources, which isn’t your AR team or product marketers. At Acquia, that meant using Dries Buytaert as often as possible when speaking with analysts.
If you do need help scaling your program, look to agencies who specialize in analyst relations like Spotlight AR. They understand the nuances it takes to run a successful AR program at scale. (Disclosure, I was once a customer of Spotlight).
Want to learn more?
To demystify the black arts of analyst relations, here are the best analyst relations professionals + resources I’ve come across. Who/what am I missing?
- Beth Torrie. I competed against Beth for many years, and she’s the best. I hope to never compete against her again.
- Rick Nash and Andrew Hsu at SpotlightAR. They’ve helped dozens tech companies with their AR programs.
- Joely Urton of Box. I’ve never met Joely, but a good friend of mine worked for her, and said she’s great. That’s enough for me.
- Institute of Industry Analyst Relations is a not-for-profit organisation established to raise awareness of analyst relations and the value of industry analysts.
Other AR best practices posts
- IIAR Webinar: Introducing CCS Insight – and how they make sense of the connected world
- [GUEST POST] Tips to Ensure a Productive Analyst Briefing
- [GUEST POST] How to Create a More Compelling Analyst Event
- Wrap-up: IIAR Germany 2018 kick-off
- [GUEST POST] What is your product and what does it do? by Adrian Sanabria / Threatcare
- [GUEST POST] Analyst Briefings: The Delicate Business of Client References, by Vicki Jenkins / Nelson Hal
- [GUEST POST] Analyst Briefings: Preparing for Success, by Vicki Jenkins / Nelson Hall
- [GUEST POST] Analyst Briefings: Are you a Strategic Team Member or the Note-Taker? by Vicki Jenkins / NelsonHall
- [GUEST POST] Key Requirements for Vendors When Briefing Software Analysts, by Natalie Petouhoff / Constellation
- [GUEST POST] Maximizing the impact of an analyst briefing – 2 of 2 by Richard Stiennon / IT-Harvest
- [GUEST POST] Maximizing the impact of an analyst briefing, by Richard Stiennon / IT-Harvest
- The hype cycle of Vendor Briefing Requests
- How to structure an analyst briefing?
- [GUEST POST] Vendors: suggestions to maximize briefing value, by Carol Rozwell / Gartner
- [GUEST POST] Briefing tips and best practices from Lisa Rowan / IDC
- Analysts: When you’re looking for a briefing – help me to help you
- Gartner improves the vendor briefing process