• Recent Posts: Influencer Relations

    Fersht: some IIAR award-winners “just tick the boxes”

    Fersht: some IIAR award-winners “just tick the boxes”

    Some of the firms mentioned by the IIAR’s analyst team awards fall short of excellence. That’s the verdict of several hundred analysts who took our Analyst Attitude Survey, and of the CEO of one of the top analyst firms. Phil Fersht left the comment below on our criticism of the IIAR awards. We thought we’d reprint it together with the […]

    Do the IIAR awards simply reward large firms?

    Do the IIAR awards simply reward large firms?

    The 2016 Institute for Industry Analyst Relations’ awards seem to be rewarding firms for the scale of their analyst relations, rather than their quality. In a blog post on July 6th, the IIAR awarded IBM the status of best analyst relations teams, with Cisco, Dell and HP as runners-up. Together with Microsoft, which outsources much of its analyst relations to […]

    Unmaking fruit salad: 6 ways to help analysts segment markets

    Unmaking fruit salad: 6 ways to help analysts segment markets

     It’s a common challenge for providers: some new or fast-changing market contains very different solutions. Clients want either apples or oranges, but the analyst research reads more like fruit salad. As new solutions come into old markets, or as analysts try to squeeze hot new solutions into their less-exciting coverage areas, it’s increasingly hard for users of analyst research to make […]

    Control in Analyst Attitude Surveys

    Control in Analyst Attitude Surveys

    Because a lot of analysts take part in our Analyst Attitude Surveys, we are able to offer clients what we call a control group. In the language of research, a control group is a group of people who don’t get the treatment that we want to measure the effectiveness of. For example, most firms might be focussed on a top tier […]

    Time for a new direction in AR measurement?

    Time for a new direction in AR measurement?

    Worldwide, Analyst Relations teams are committed to fostering the best information exchange, experiences and trusted relationships with tightly-targetted global industry analysts and influencers. Sometimes the targeting is too narrow and analysts are treated inhumanly. However, the technology buying process is transforming and so must the benchmarking of analyst relationships. There’s already a long-term transformation of analyst relations. Over one-third of technology […]

Budget cutting can help AR focus and innovate

icon-budget-cuts-105w.jpgIt is a fact of life that because of the reports of economic slowing, marketing departments at communications and IT vendors are considering budget cuts. Because most analyst relations teams report to marketing, there will be trickle down cuts hitting AR as well. Unfortunately, most AR functions are already short of staff and funding resources so the natural reaction is to perceive that budget cuts are only bad. However, if AR managers use the budget cutting as an opportunity to rethink how they do business the cutting exercise can have at least some positive outcomes.

Any business function can accumulate outdated expenses, activities and techniques like barnacles on a ship. An example can be always buying 20 advisory seats during the annual analyst services contract renewal even though only 14 are really being actively used. Another example is spending too much money on analyst events by selecting fancy destination hotels when analysts would prefer a more convenient and often cheaper location. Yet another example is buying expo floor booth space at firm conferences because “everybody knows” that they are great sources of leads when no investigation of lead generation effectiveness has been done for years, if ever.

Besides eliminating unnecessary spending, a budget cutting exercise can also surface innovative approaches to accomplish tasks that actually might be more effective done in some other way. An example here is substituting “Deep Dives” for the annual analyst event. A typical vendor analyst conference or summit might have 80 to 100 analysts in attendance with a plethora of vendor spokespeople and staff. A hotel conference facility has to be rented with expensive catering and outside resources hired (e.g., designers, graphics artists and events management). T&E expenses are huge because of the sheer number of attendees. Yes, there is a lot of information that is given out, but personal contacts between spokespeople and analysts are not always maximized because of the size of the event.

A Deep Dive is smaller, more focused, and significantly less expensive. Eight to 12 analysts from the same firm or a collection of boutiques are gathered for a full day of briefings. Executives and spokespeople drop in for an hour or so to have an open and candid discussion using flip charts instead of giving Death by PowerPoint speeches. Rather than renting expensive hotel conference facilities and add on resources, AR can just use a company conference room and normal catering. Executives like this approach because it requires less of their time, both at the event and in preparation. All analysts like the informal approach because it tends to be more open. Large firm analysts like it because their competitors are not in the room. AR can do four or five Deep Dives and hit half to two-thirds of the analysts that would come to a traditional analyst conference for one-tenth the cost with better results.  It also will require less staff resources to conduct these small events as compared to the many hours required to successfully do a large event.

At a number of vendors, some expenses go to AR because they have the word “analyst” in them. For instance, AR teams might be responsible for the cost of expo floor booth space at analyst conferences just because it is a Gartner or Forrester event. This makes no sense if the rest of the lead generation work, including industry events, is handled by another department. If the analyst conference expo floor truly does generate high quality leads then AR should cut this expense and let the normal lead generation team pick up the expense if they think it has a good ROI. BTW, the vast majority of analysts at major firms with expo business at their conferences will not “punish” a vendor that cuts or eliminates sponsorships.

Another example is AR funding analyst contracts with firms that are not aligned with AR’s objectives. Often these are the “pet” analysts of some executive. Having smart advisors is critical for executive decision support, but AR should not have to fund these contracts just because the advisor happens to be an analyst firm. If the executive truly finds the advice valuable, he or she will fund the contract.

In this and future posts, we will discuss ways for AR mangers to cut costs without cutting effectiveness. In addition, we will be discussing ways to avoid the budget axe by proving the value of AR.

SageCircle Technique:

  • AR should take a zero-based budgeting approach to any expense reduction exercise with everything on the table
  • AR should revisit its charter, objectives and priorities to ensure that they are aligned with the company’s strategy and tactics, especially if the company strategy is changing
  • AR should examine every expense for its relevance to AR’s objectives and cut those that should be handled by another budget
  • Annual analyst contracts should be scrutinized to make sure that everything in the current and prior contracts was fully utilized with underused items cut from the new contract. This will produce howls of protest from the firms’ sales representatives but will not impact analysts opinion

Bottom Line: Budget cutting is never painless and is fraught with political challenges. However, taking a systematic approach rather than generic across-the-board cuts can produce significantly better outcomes.

Question:

Analyst firm sales executives – Are you working to ensure that every part of your contract is getting fully utilized and delivering visible business value?

Analysts – How does budget cutting that impact your firm’s contract affect your opinion of the vendor?

AR managers – How do you approach budget cutting? How much of your current spending really belongs in someone else’s budget?

Are you concerned that cutting your budget will hurt your relationships with the analysts? SageCircle can help. Our strategists can:

  • Identify spending areas that can be safely cut
  • Brainstorm innovative – and cheaper – substitutes for expensive activities
  • Discuss whether it will be necessary to hold a conversation with an analyst to explain the cuts to his or her firm’s contracts

SageCircle strategists understand your opportunities, challenges and priorities because we have been AR practitioners and executives as well as industry analysts and AR researchers. SageCircle emphasizes the use of phone-based inquiry through its Advisory Service, which is your lifeline when you need timely access to an AR and analyst expert to exploit an opportunity or mitigate a problem. Advisory is available through an annual “all you can eat” contract or blocks of two or five hours “by the drink.” Click here to learn more about our advisory services.

To learn more contact us at info [at] sagecircle dot com or 650-274-8309.  

SageCircle Annual Advisory Service Click the image to see the Advisory Service brochure

6 Responses

  1. […] solutions for analyst contracts Posted on February 28, 2008 by sagecircle Last week (see Budgeting cutting can help AR focus and innovate) we suggested that potential budget cuts may have the effect of causing AR teams to prioritize and […]

  2. […] Carter’s comments on how AR should respond to budget cuts should encourage AR directors to take a fundamental look at their AR programmes. We still think that most analyst relations effort is wasted. From top-to-bottom, AR professionals should review the goals, the challenges and the solutions – and take a realistic assessment of the internal support they can in obtaining the difference resources that AR programmes need to succeed. […]

  3. […] Budgeting cutting can help AR focus and innovate […]

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  5. […] Budgeting cutting can help AR focus and innovate […]

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