The proper care and feeding of industry analysts requires tact, candor, common sense, and consistent communications. But the payoff, in terms of helpful advice to you and your potential customers, can be huge for a young technology firm. Unica’s senior director of marketing communications Carol Wolicki offers some concrete ideas on how to get the most out of dealing with industry analysts.

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By Carol Wolicki, Contributing Writer

The first question a technology company needs to ask itself is: why do I care about industry analysts?  And the simple answer is– whether you like it or not – that what an industry analyst says or writes about your company can affect your bottom line. 

Customers looking to make major investments in new IT infrastructure often seek out the opinions of industry analysts to help counsel them on what to buy, from whom to buy it and how to negotiate the sale.  So, if industry analysts aren’t on your radar screen, your company could easily be leaving money on the table.

An Easy Test

One way to find out whether or not analysts are impacting your sales is to ask! Instruct your sales team – when they’re answering an RFP or in the process of working with a new prospect – to ask the potential customer if they’re going to analysts for information on the deal. If the deal is substantial, the answer will almost always be ‘yes.’  The next obvious question, of course, is who are they talking to?

Getting in Front of the Right Analysts

Let’s be clear: we’re not talking about financial analysts here.  While there are technical analysts who work at some investment banking firms, they primarily counsel investors.  Those aren’t the analysts who talk to your buyers. 

The analysts who influence sales are typically from companies like Gartner, Forrester, AMR, TowerGroup, and others who have established a market selling their knowledge to IT buyers.  There are also analyst firms who primarily service the vendor community: Dell’oro Group, Sage Research, Current Analysis, and Doculab, to name a few. 

If you’re a vendor concerned about sales, it’s the first group you should be paying attention to; if you’re seeking competitive market data, insight into customer preferences, sales support help, or product comparison testing (respectively), the latter four firms could fit the bill.

Getting Right in Front of the Analysts

It’s not just about getting in front of the right analysts; it’s just as important to get “right” in front of the analysts.  That means not only knowing who you’re speaking to (i.e., researching the firm as well as the specific analyst beforehand), it also means knowing when to interact with analysts as well as how.

If you’re a start-up and you’re looking for help on market-sizing, competition, or pricing as a means of better positioning your product for roll-out, and you’re working with someone like Dell’oro, then you need to begin the interaction with analysts as early as possible in your development cycle. A lot of companies will shy away from approaching analysts early on, but the more input an analyst has in the design of a product or service, the less likely the company will be surprised by analyst reviews when the product or service is launched. You may or may not win over the analyst, but you’ll know where you stand.

In fact, there are several things you can do to help ensure the analysts you’re working with have a more favorable view of your new product roll-out.  First, keep them posted on progress: have them review your projected timeline and then discuss potential obstacles that might occur. Solicit their input on ways to streamline the development process.  Keep them apprised periodically of your advancement.  And, when you have your first beta customer, let them know.  In fact, if you’ve built a solid case for yourself and have developed a truly collaborative relationship with an analyst, he or she might bring a customer to you. It’s not as far-fetched as it sounds.

Companies who understand the impact analysts can have on sales generally have well-thought out analyst relations programs that address the proper “care and feeding” of these industry influencers. Some best-practices they employ include:

1 – They stay in touch:  A good rule of thumb is two formal briefings a year (generally covering significant product developments or organizational changes) plus short calls or inquiries at least once a month (on market developments, product questions, industry news, etc.)

2 – Build personal relationships: An average analyst carries a workload of at least 40 clients. If you want to be remembered, treat your analyst well: send them a hand-written thank you note when they’ve gone out on a limb for you; buy them dinner and get to know them personally; go out of your way to hear them speak and then converse about the subject with them. In short, pay attention to them.

3 – When you do brief analysts, tell them what they want to know: (1) the need for your product, (2) its benefits, (3) the evidence to prove this:  who will use it, how you’ll take it to market, what your success metrics are, how you’ll support and service it, and what your long term vision is. Stick to these key themes with no more than three to four slides for each, and you’ll be a hit with the analysts.  One last thing: practice your presentation and anticipate questions – and answers – ahead of time.  It will make you more confident at the briefing and will keep you on track.

4 – Ask for feedback. If you’re paying for their services, this will be a much longer discussion than if you’re briefing an analyst for the first time and are not (yet) a subscriber to their services.  If the latter is the case, you might get lucky and be talking to an analyst who wants to impress you with his or her knowledge so that you buy the firm’s services, but that rarely happens. Still, you should always ask. The nuggets you get may pay for the visit.

5 – Be consistent.  Good analysts could moonlight at PIs (private investigators).  They know where the bodies are buried and they how to dig up dirt. If your story is different than someone else’s in the company, or different from what’s on your website, or than what’s been published in the news, watch out!  If it’s important enough to the analyst to find out the reason for the different storylines, he or she will.

6 – Don’t worry so much about what an analyst writes about you. Less than 25% of an analyst’s time is spent writing reports.  Be more concerned about what they say about you.  Along with the reports and vendor profiles that analysts write, they also create ‘long lists’ (a list of everyone in the market) and a ‘short list’ (preferred vendors).  It’s the short list that you want to get on:  this is the list of companies that they are more likely to provide to customers who call asking for recommendations for their IT problems.

7 – If an analyst writes something about you that you don’t like, don’t berate them.  Unless what they’ve written is absolutely incorrect – and you can prove it – they’re not going to change what’s already written.  That doesn’t mean you can’t change their opinion: you can.  Prove your case, and even if they don’t change their written report right away, there’s a good chance they’ll change what they say about you – both publicly and privately.

8 – To win big with analysts, put them in touch with your customers. It will fill out their knowledge base about users’ needs and, also, about how they’re using your technology. Remember: analysts assume that all vendors lie; they don’t think the same of customers.  

If You Want to Save Money

You don’t always have to buy analysts’ services to brief them.  If you’re a new company on the market, or an old company with a new product, analysts will want to know about you.  Especially if you’re going to impact key markets they’re covering.  But until you make an investment in an analyst’s services, this will pretty much be a one-way conversation with you doing the bulk of the talking.  If you want real industry insight, you have to pay for it.

There are a couple things you can do to save some money.  One thing is to negotiate with the firm in the fourth quarter.  Remember, you’re not negotiating with the analyst but with a sales rep, so wheel-and-deal as hard as you can.  Doing it at the end of the year, when sales is trying to close its books, will give you some leverage.

If you can’t wait till then, one option is to buy a la carte services: purchase a standalone report.  Then call up the analyst and ask him/her questions about it, or drop them a note. They’ll probably be flattered that you’ve read what they’ve written and respond.Another option is to buy a day’s consulting time. 

It will seem expensive, but it’s a good way to test out an analyst, and see whether their technical knowledge and market sense match your needs.  And, no doubt, you’ll get some good dirt on the industry as well as a reasonable amount of feedback you can use.

Like the headline says: building good analyst relations isn’t rocket science.  But the foundation for launching a rocket and launching a solid relationship with analysts is the same: honesty, common sense, and respect.  Use these as your launch pad and you’ll go far.