AR belongs in Marketing – a dead idea

Analyst Relations PlanningPublic policy wonk and Fortune Magazine columnist Matt Miller’s new book The Tyranny of Dead Ideas: Letting Go of the Old Ways of Thinking to Unleash a New Prosperity got us at SageCircle thinking “Hmm, are there dead ideas holding back analyst relations?” Of course there are! This is one in an occasional series of posts that will address the dead ideas that impact AR programs and their ability to delivery strategic value to their companies. These posts are meant to be provocative and not necessarily definitive in their new ideas and suggestions.

Dead Idea: AR belongs in Marketing

Back Story: In the time before there was a dedicated AR position, industry analysts calling vendors asking for a briefing were often bounced around from one department to another. More often than not, the analyst would end up on the public relations doorstep because what the analyst did sort of sounded like a reporter. Because PR usually reported to Marketing, AR became a de facto marketing function even if it became an independent department.

Problem: Putting AR in Marketing has multiple problems, but a big one is consistency. One of AR’s critical success factors is consistently interacting with analysts because influencing the analysts is a process that takes a long time. AR cannot turn on and turn off interactions and be successful. Unfortunately, Marketing programs in most vendors are the model of inconsistency with resources being changed frequently.  If resources and programs are cut during recessions and restored during good times the damage for AR has been done in terms of:

  • Institutional memory is lost as AR staff gets cut or moves to other companies 
  • Relationships with analysts go stale due to lack of interactions or the inability to work with the same people
  • Sales and revenues are impacted by analysts with outdated or incomplete information providing inappropriate advice to customers and prospects
  • Intelligence dries up about analyst opinions and intentions because analyst contracts get cut reducing inquiry access to analysts

New Idea: Move AR out of Marketing and into Strategy. While there are several different options for a new home for AR (e.g., sales, product management and investor relations) each have their own issues. Strategy on the other hand has a number of advantages and few disadvantages. Advantages include:

  • There is consistency in funding and objectives
  • The AR staff will be permitted, encouraged and required to take a long term point-of-view
  • The AR team has access to top decision makers for analyst interactions that enhance the ability to impact the top of SageCircle’s “Analyst Hierarchy of Needs”
  • Planning will include knowledge about confidential activities that permit AR to prepare for “surprise” announcements
  • Strategy has established collaborative relationships with other parts of the company

SageCircle Technique:

  • AR managers should seriously evaluate where AR falls in the organizational structure of the company
  • If it apparent that the current location is sub-optimal, then AR managers need to evaluate a better organizational home
  • Like influencing the analysts, changing the reporting structure is a long term project so AR managers need to develop a plan to educate executives and build support for a move

Bottom Line: Vendors often follow dead ideas that have long passed their “sell by” date. AR teams needs to attack dead ideas and work with their executive sponsors and colleagues to come up with better approaches that address today’s challenges.

Question: AR managers – Is AR slotted in the appropriate spot in your company’s organization structure?

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5 Responses

  1. As a Marketing VP for a vendor (who also owns AR), I have to agree with the basic point of the post. However, I would say that by extension, Marketing should belong in Strategy, or Strategy should belong in Marketing – at least in the Services Industry.

    Since most marketing activities in the service industry deals less with Price and Promotion and more with People and Product, they are also, by nature, long term initiatives that influence behavior over time.

  2. As an industry analyst, I agree with the post, as I often agree with what Carter has to say. In my experience though, most vendors do not do AR well at all – especially young/startup vendors. They use PR firms that have very little, if any, concept of how analysts work and what we want/need. The bottom line for me is, and always has been – how do I provide maximum value and insight to my clients that they simply can’t get anywhere else? In order to provide that value, I need to understand my coverage areas better than my competitors, and I need to provide clients insight that I can only get from savvy vendors. The big vendors typically understand the value of AR, and of the industry analysts that often speak directly to their market, but the smaller and even mid-sized vendors riddle us with unrelenting SPAM that provides no value to us or our clients. I write to over 20,000 clients, and speak to hundreds on the phone over the course of a year – and not window shoppers, people that want to make buying decisions.

    For the sake of analysts, vendors, and all of our clients, understand the value of AR and embrace it! AR belongs in the strategy organization for tech vendors.

    Mark

  3. Carter,

    I’d say you have a point about moving AR but it’s difficult to generalise about the right location.
    In some companies, marketing is a source of power and controls budgets and has comms reporting to itself.

    I’m a marketeer, so for me and according to Kotler, marketing should be everywhere. It is often so, though not called marketing: product management can report to marketing or not, but part of product management (defining requirements, etc) is marketing.

    Marketing has often a bad name because people think of if as field marketing. Which is only one tiny part of that Kotler book: Principles of Marketing

  4. […] AR belongs in Marketing – a dead idea « SageCircle Blog Why analyst relations shouldn't be in Marketing or PR. Speaking for myself, sending me regular old press releases from your PR engine is a good way to get on my spam list. (tags: analysts) […]

  5. AR would be well suited in a CTO’s organization. The function is inextricably linked product management functions due to the flow of detailed information. Meanwhile the marketing organization provides a necessary refinement of information for the ecosystem. AR is however distinct from marketing programs that are designed to build opportunity funnels. Inasmuch as AR can be used to shape the longer term fascia of the company, it provides an essential tool of the CTO to carry out a mission that is designed to impact both the internal agenda as well as the external critical path of the company.

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