Why it is a really bad idea to cut AR, even in a recession

icon-budget-cuts-105w.jpgIt is common for tech vendors to cut marketing spend in a recession. Because Industry Analyst Relations (AR) is typically in the marketing department, AR is often asked to shoulder part of the cost cutting burden by cutting spending, freezing hiring, or even cutting head count. As a consequence, AR often cuts back on the total number of interactions it conducts with key analysts. This can be short sighted for a variety of reasons:

  • Analysts interact with many communities on a daily basis – As we pointed out in involving the analysts early and often, analysts do a significant number of touches each and every day with IT buyers, reporters, financial analysts and others. Providing analysts with a continual stream of information about your company, customer stories, and so on ensures that the analysts will properly position you with IT buyers, press, investors, et cetera.
  • Top-of-mind presence is ephemeral – Because the analysts have so many interactions and gather so many data points, it is easy for a vendor to get pushed lower in the analysts’ consciousness unless you are reminding them “Hey! Don’t forget about us.” This is especially important in light of the first bullet, because analysts do not look up a list of vendors to use as examples when talking, rather they use vendors that are top-of-mind. This is also true when analysts give speeches and provide top of mind responses to questions.
  • Hot news analysis relies on what is in the analysts’ head – This is related to points one and two, but deserves a special mention. Because industry analysts are immediate go-to resources for the press when a big news event occurs, it is important that analysts are up-to-date about your company in order to give an overall positive impression.
  • Your competitors interact with the analysts – Besides informing the analysts about themselves, savvy AR professionals will work to subtly deposition their competitors. Who do you want telling your story, you or your competitors?
  • The press is spreading rumors – A popular call reporters like to make with analysts is to check out rumors. Rumors can stick in analysts’ brains unless vendors regularly touch base with the analysts giving the analysts a convenient opportunity to dispel the rumor.
  • Published research is the accumulation of many little data points – While some research papers are the result of a formal project, much research is written based on all the vendor briefings, client inquiries, analyst consulting days, press calls and so on. This is especially true for signature research like Gartner’s Magic Quadrant.

SageCircle Technique:

  • Be sure your executives understand the impact of the analysts on your revenues as compared to other influencers.
  • Educate your executives on why frequent interactions are valuable and why lack of interactions can put your company at risk
  • Maintain an interaction calendar documenting both past interactions and future plans
  • Track your interactions using an analyst relationship management (ARM) tool in order to have statistics to use with your executive (see The ROI of Analyst Relationship Management Systems)

Bottom Line: Not have having frequent interactions with key analysts due to budget cuts can reduce the number of analyst-generated leads, negatively impact ongoing sales deals and degrade market perception.

Question: When it comes time for budget cuts, does your department do across the board cuts or does it do an analysis of all spending to determine where cuts can be done with less impact?

Do you need help building executive sponsorship? SageCircle can Help – Strategists can work with you educate your executives leading to a better appreciation for the revenue and market perception impacts of the analysts. This can lead to enhanced support for AR. Call 650-274-8309 or e-mail info [at] sagecircle dot com for more information.

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