• Recent Posts: Influencer Relations

    Analyst Relations Value Forum to discuss Tragic Quadrant

    Analyst Relations Value Forum to discuss Tragic Quadrant

    The IIAR has updated its Tragic Quadrant, which ostensibly ranks the ten top analyst firms in terms of impact, relevance and ease of doing business with. Earlier posts have mentioned the weaknesses of both the Quadrant and the underlying method. The IIAR’s 2017 top ten drops PAC, the fifth most valuable analyst firm. Crisp Research, ESG and Machina (Gartner’s IoT […]

    Your pitch to analysts isn’t just about your solution

    Your pitch to analysts isn’t just about your solution

    In pitches to analysts, there are many conversations going on. At one level, there’s a communication about the business solution. There’s also a conversation about the wider market and about the personal credibility of the participants. Sometimes the slides used in pitches are just excuses for the interaction. The slides are used to assess both the market vision of the firm and the […]

    KPMG pushes out 451 in 2017 Strategy Analyst Firm Awards

    KPMG pushes out 451 in 2017 Strategy Analyst Firm Awards

    For the strategic heavy lifting, executives are reaching out to a very wide range of advisors. Gartner heads up the list when we look at the Analyst Value Survey data to find the analyst firms most valued by people who work on strategy. It creates almost 19% of all the value being produced by analyst services around strategy (If CEB, […]

    Save the date for our Analyst Firm Awards

    Save the date for our Analyst Firm Awards

    This year we’re publishing our analyst firm awards more or less monthly. Please put the dates in your diary. If you’re a subscriber to the Analyst Firm Awards, you can also access a webinar for each of these events, held on the final Thursday or each month. January – Global January 18 – Outstanding reports February 17 – Strategy March 15 – Internet […]

    IDC could flourish after IDG’s sale to Chinese consortium

    IDC could flourish after IDG’s sale to Chinese consortium

    As we predicted in our April Fool’s Joke last year, IDC has been sold as part of a Chinese-led purchase that leaves CEO Kirk Campbell at the helm. IDG Capital will take control of the IDG Ventures; China Oceanwide will control IDG and most of IDC, and an independent trustee will take control of IDC’s High Performance Computing (HPC) practice, […]

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
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  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 […]

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