Part 2 of 4
Analyst relations deep dive
It is widely acknowledged that industry analysts are important influencers in large technology purchases. So while pretty much everyone agrees they are important, how do you prioritize analysts’ influence on your market?
Our formula for determining analyst influence is simple, but not simplistic. We take a quadrant approach, charting relevance of the analyst firm’s reporting on one axis and brand recognition of the analyst house on the other axis. This puts different analyst houses in four quadrants, which makes a very natural priority list.
This is how we do it:
Relevance of analysts’ reporting
Although analysts may tweet, blog, consult and chair roundtables, analysts live and die by their reports. That is why analyst reports are still the best places to go to determine their focus on a particular subject. Determining that focus is straightforward but time-intensive. We go to the websites of all the different analyst houses and search for relevant reports over the last 12 months. 12 months feels like the appropriate amount of time to check, because you can’t judge current relevance from something that is out-of-date.
Analyst brand recognition
The size of the analyst brand is important. The old adage goes that “No-one gets fired for buying IBM”. Likewise, no-one gets fired for following Gartner’s recommendations. Well, maybe a few do, but you get the point. Large enterprises are naturally conservative animals and third-party validation from a trustworthy name that the CEO recognizes is important.
There are probably thousands of methodologies for determining brand influence and most of them are probably complex and/or expensive. Our way is simple. We take a proxy. We Google search the number of entries (hits) of the analyst firm’s name for the previous 12 months. Google search is about the closest thing we have to measurement of the collective consciousness of humanity.
Prioritizing analyst firms
When you have plotted in all the relevant analyst firms, which is very rarely more than a dozen in any one sector, you have four quadrants. The top priority, the VIP list, will be the analyst houses which have relevant coverage and huge brands – the top right quadrant. Assuming Gartner does cover that particular area, they will typically lie in this quadrant – poetic justice that they should find a home in the “Leader” quadrant, using their Magic Quadrant parlance. The second most important quadrant is the bottom right quadrant, the “Specialist” quadrant. We all know the power and influence that some small analyst firms have, based on their focus and brainpower. So it’s only right that they should be a priority.
Beyond that point, you have a decision to make whether to go any further. If an analyst firm barely covers a particular area, there is arguably little point in prioritizing your limited resources on that firm. If you do decide to go further, the third priority should be the top left quadrant, housing analyst firms with big brands but less focus on that area. Finally, you have the bottom left quadrant, featuring analyst firms with little brand recognition and little focus on the area.
This quadrant produces a snapshot of analyst influence across any particular field. When you review the results of this research, to the mind of an experienced Analyst Relations or marketing person, it provides a real common sense view. This is the kick-off for all analyst relations activity that follows.