• 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 […]

Right price – Acquire those services that meet your basic requirements [Purchasing Analyst Services, Part 5]

icon-budget-cuts-105w.jpgIn the past the way to avoid the price increases that Forrester and Gartner are initiating on a regular basis would be to use the usual purchasing best practices. These include waiting until the last minute before the end of the quarter or better yet end of the fiscal year to finalize a contract, playing one firm off another, signing up for a multi-year contract, and consolidating purchases to obtain a larger discount.

Alas, these techniques are not as effective now with Forrester and Gartner as they were in the past.

While there are hundreds of analyst firms, with some large ones like AMR Research and IDC, the unfortunate reality is that when it comes to the market for end-user advisory analysts, Forrester and Gartner have achieved a de facto duopoly. Because the market for their services is so underpenetrated, neither firm has to compete on price to grow revenues, clients, and market share.   Therefore they can concentrate on improving margins while growing revenues by expanding their sales forces. It is a very cozy duopoly. To date there have been no serious contenders to the Big 2 as replacements for the acquired Giga and META. As long as firm executives continue to impose pricing and discounting discipline on their sales forces the opportunity to negotiate a better price with the Big 2 is limited. Gartner has been especially disciplined, using a “Bloomberg model” of a price for the first seat, a slight discount for the second seat and no incremental increase in discounts after the second seat regardless of volume. So while it is still possible to negotiate on price, the opportunity is not as great as in the past.

The best way to get the right price for the analysts services you require is not to put all your effort into trying to whittle down Gartner’s or Forrester’s price. Rather, the approach for getting the right price is to get the right service from the right firm as laid out in parts 3 and 4 of this series (see below for links). By not falling into the trap of buying the most expensive services from Forrester or Gartner, you can still get the right price. 

SageCircle Technique:

  • Enterprises and technology vendors alike should not focus all their energy on obtaining incremental or minor discounts from Gartner or Forrester in the next round of contract negotiations
  • Buyers of analyst services should invest effort in seeking out alternative suppliers of advice in order to get what is needed at the right price

Bottom Line: As long as there are no serious competitors in the end-user advisory business to challenge Forrester and Gartner they have no motivation to discount their pricing regardless of the size of the deal. Buyers need to focus their energies on alternative sources of services as the way to obtain the right price.

Question: AR teams – How much of your effort when it comes to negotiating contracts with Forrester and Gartner is focused on getting price reductions?

This post is one in a series on the SageCircle blog about how buyers of analysts service, whether enterprise IT or tech vendors, can ensure they are might the right purchasing decisions. For those analyst clients needing much more depth than what is in this blog series, please check out the SageCircle AR Wiki where you can find a lengthy thread of articles that provide more depth and breadth on this critical topic including checklists and tools.

  1. Using five rights to avoid a wrong when it comes to purchasing Gartner or Forrester services
  2. Right reasons – Evaluate why you are purchasing analyst services
  3. Right services – Align the services you buy to better match the reason for info or advice
  4. Right firms – Search out alternative services providers that better match your reasons
  5. Right price – Acquire those services that meet your basics requirements
  6. Right usage – Drive usage of the services you buy to ensure maximize business value

10 Responses

  1. […] Comments Right price – Acquir… on Using five rights to avoid a w…Right price – Acquir… on 2/ […]

  2. […] Comments Right firms – Search… on Right price – Acquire those se…Right price – Acquir… on Using five rights to avoid a w…Right price – Acquir… […]

  3. […] Right price – Acquire those services that meet your basics requirements […]

  4. […] Comments Right reasons – Eval… on Right price – Acquire those se…Right services – Ali… on Right usage – Drive usage of t…Right firms – Search… […]

  5. […] Right price – Acquire those services that meet your basics requirements […]

  6. […] & recession -… on AR & recession – it’…AR & recession -… on Right price – Acquire those se…AR & recession -… on Why it is a really bad idea to…AR surviving a reces… […]

  7. […] Right price – Acquire those services that meet your basics requirements […]

  8. […] (META by Gartner and Giga by Forrester). Of course, SageCircle first mentioned this duopoly in a July 2008 post and then reiterated our opinion in a March 2009 post. This is an important point because it shows […]

  9. […] Comments Insights from Forres… on Right price – Acquire th…Is there an acquisit… on IDC experiences layoffs …People on the Move i… on What […]

  10. […] from Forres… on Saving money on contracts with…Insights from Forres… on Right price – Acquire th…Insights from Forres… on Right price – Acquire th…Is there an acquisit… […]

Comments are closed.

Follow

Get every new post delivered to your Inbox.

%d bloggers like this: