As we work with clients on helping them manage their analyst spending, one major problem that keeps popping up is what we call the “contract renewal trap.” This occurs when the analyst contract manager (e.g., analyst relations, market research or IT manager) lets the analyst firm control the renewal process by starting with last year’s contract. The previous contract then becomes a de facto floor to build upon. It is a seductively easy trap to fall into because it appears to have minimal work involved and there is little likelihood of not renewing. Of course, this trap benefits the analyst firms immensely.
The contract renewal trap is likely costing the average vendor or end-user client of the analyst firms tens of thousands if not hundreds of thousands of dollars of unnecessary spending every year.
- Contract managers, whether end user or vendor, need to determine if they are in a contract renewal trap
- Contract managers need to take a “sacred cows make the tastiest hamburger” mentality and approach renewals as if Forrester and Gartner might not get any contract
- Contract managers need to seize control not cede control to analyst firm sales representatives
- Contract managers need to invest the time and effort needed to do a zero-based contract negotiation
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Bottom Line: It is possible to reduce the spending with Forrester and Gartner, but not by starting with last year’s contract. AR team, market research managers, and other analyst contract managers need to scrutinize every service purchased in the last year to see if true business value was obtained and then ruthlessly cut unproductive spending. This is one of the techniques to prevent wasting money on contracts with the Big Two duopoly.
Question: Analyst contract managers – How do you approach analyst contract renewals?
What additional information does it take to negotiate effectively with the analyst firms?
- Knowledge about the firms’ research methodology and analyst culture
- Knowledge about the true business value of Forrester’s and Gartner’s service offerings
- Insights from tracking all the interactions the firms’ have with Wall Street and investors (e.g., earnings calls, investor days and participation in financial analyst conferences)
- Intelligence from AR managers around the industry
- Experience as contract negotiators
- The right attitude (i.e., all business is personal, but don’t take it personally)
SageCircle has all of the above bullets covered, which is why the process of 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.