SageCircle is handling more and more client inquiries about how to reduce the cost of Forrester and Gartner contracts. One aspect jumps out: too many purchasing managers (e.g., AR, market research, or procurement.) focus on managing costs mainly at contract renewal time. The reality is that saving money needs to be a focus each month of the contract, both to manage incremental spending but to also set the stage for the next contract renewal.
What many vendors do not recognize sufficiently is that the Big Two account teams are scouring the vendors for additional budgets to tap with a sale of an Advisory seat here or some Service Units there. In some cases, the incremental purchases can easily add up 50% of the original contract. This can be very wasteful if the individual doing the purchasing does not how to be a good research consumer (very likely), does not use the resource after the initial couple of weeks (more likely) or buys something this already available in other parts of the company (regrettably likely). Because there is rarely a line item in the chart of accounts for analyst services, it can be very difficult to track these purchases.
Contract managers need to constantly work on monitoring actual utilization of the services in the prime contract. This includes making sure that individuals are using their assigned seats, Service Units or prepaid analyst consulting days. If individuals are not making full use of the resources, they should be reassigned to some else and eliminate a “nickel and dime” incremental purchases.
- Put polices into place to manage the purchasing of incremental seats or services
- Require your sales reps to report monthly on incremental purchases in the pipeline
- Require your analyst sales reps to provide monthly reports on which of your seat holders scheduled analyst inquiries and read research
- Review the reports for resources that are being under utilized
- Talk with services holders to determine if they are getting value from the services. If not, then reallocate the services
Bottom Line: Analyst firm sales teams will likely protest that monthly reports are not practical and that vendors cannot reassign services once the contract has started. Do not believe them. If necessary, escalate your requests up the analyst firm hierarchy. Maximizing your company’s spending efficiency will not damage your company’s relationship with the analysts who are largely unaware of contract issues.
SageCircle has all of the above bullets covered, which is why how to go about negotiating with Forrester and Gartner is such a common inquiry from our clients. SageCircle has developed a flexible – and currently unique – packaging and payment framework that permits vendors and IT managers to acquire the services that makes sense for their particular situation. As a consequence, buyers of Forrester and Gartner services (e.g., analyst relations, market researchers, procurement managers, corporate librarians and IT managers) can purchase as little as two hours of Advisory time to obtain insights and advice that will help them maximize analyst contracts while minimizing expense. Click on SageCircle advisory options to learn more about how SageCircle can help you reduce your analyst contract spend.
SageCircle Advisory and Online SageContent Library clients have received a SageInsight with practical and actionable recommendations for negotiating with the Forrester and Gartner duopoly.
Question: Who owns responsibility for managing analyst firm contracts in your company? Do they use year-round best practices to maximize business value while controlling spending?