Yankee’s Group’s summer repositioning and restructuring has, more or less, completed the firm’s evolution from a full-service analyst and consulting firm into a data-driven research and advisory firm focussed on mobility (which the firm defines as advancements that enable fluid access to any content, applications or services from any device, by anyone, from anywhere at anytime).
The journey has been challenging for both Yankee and for its investors. Scaling back mature research areas, such as fixed-line telephony and broadband, has meant changing long relationships with individual analysts and clients focussed on those low-growth areas. Yankee is also one of many firms shifting to a more data-centric research method. Ovum and Butler have had similar journeys and some analysts at firms switching from primarily opinion-led research have struggled to give clients better insight from ‘hard’ data.
While Yankee’s clients have reacted favourably to an approach which is more specialised and data-driven, those concerned with topics now outside the firm’s scope feel some frustration. That’s especially the case for analysts and analyst relations professionals who have invested time in building up knowledge about Yankee’s ‘legacy’ markets only to see that intellectual capital, invested in its fixed line analysts and research base, is rapidly depreciating.
Commercially, it seems hard to doubt the wisdom of building up deeper focus. Gartner and Forrester’s role-based approaches have allowed them to substantially increase the value, and pricing, in their contracts. Yankee is one of few firms to have delivered double-digit growth while keeping retention rates over 80% (a figure seen as a floor by some firms who, like Yankee, aim for closer to 90%).
Focus, of course, trades off value against reach. ‘All you can eat’ pricing (like that often offered by PAC, Datamonitor and its ex-wife Ovum) allows firms to strike large central deals with buyers. That’s ideal for analyst firms that have struggled to scale up their sales team to the point where they can make multiple sales into the same organisations. By boosting usage these firms also hope to increase their client’s switching costs.
However, in a period where budgets are under pressure, it’s more necessary to sell more narrowly, and at both a lower level in organisations as well as centrally, in order to find where the research really is used and valued. For Yankee, that means introducing added products that may appeal in other departments of an organisation, as well as to new clients. Its new Mobile Money Strategies product is aimed, for example, at the mobility decision makers within an organisation.
That has also allowed it to boost its sales in enterprises that were not concerned with telecoms as a technology, but are deeply concerned with mobility as a business driver. Larger enterprise clients like big name firms in the consumer healthcare and financial services industry also gives Yankee more insight into the challenges facing the demand side. Yankee is moving towards a challenging target of moving beyond its traditional telecoms base to serve any enterprise impacted by mobility: something which will also shift the balance in its revenue between vendors and enterprises.
However, because Yankee is sharpening its focus on average contract value and products which have recurrent revenue, it joins firms like Gartner and Forrester which avoid profitable consulting work because it’s less profitable than research.
The deeper focus on the enterprise sector’s problems, of course, also makes Yankee’s insight more valuable to many suppliers of solutions which enable mobility. While some vendors’ market intelligence teams need analysts to map the supply side, there’s more value across the organisation in understanding the problems of the demand side.
In a year’s time, we will be surprised if Yankee has not been able to boost its renewal rates through a greater reliance on data. As Forrester has found with its successful Technographics service, data can be a product with high value and high switching costs if it gets built into the way clients develop their strategy. Data is key not only to making Yankee’s research more focussed on the attitudes, behaviours and usage patters of mobile users, as well as on forecasting mobile technology markets. Data is also key to making the firm’s products easier and faster to sell. Data is, unlike qualitative insight, usually easier to describe, sell and renew over the phone, alongside face to face selling. It also opens up Yankee more easily into channel partnerships, where it reuses and resells data from others, or where others use Yankee’s data. A good example of the sort of firm Yankee should be partnering with is Zokem, the mobile usage panel.
This greater reliance on data can produce challenges for analysts. While it seems to be a truism that clients want insight to be based on fact, it can be a challenge for analysts to refocus onto new areas and to write their research on the basis of hypotheses developed primarily from data rather than opinion. Yankee now has over a million data points updated quarterly, which cover 6/7ths of global GDP. In addition, the firm has increased the tempo of delivering data and insights to the market via a family of daily newsletters, including Mobile Now, and verticalised companion newsletters like Mobile Money Now (which is focussed on the needs to financial services firms).
As Yankee’s focus on data grows, the possibility develops of the firm substantially evolving outside the traditional analyst sphere. How many other firms would be brave enough to put data, rather than analysts, back at the heart of their business?
Cross-posted with permission from Analyst Equity.