Knowledge is power when it comes to purchasing decisions about analyst firm contracts. Unfortunately, too many contract managers do not understand many of the underlying behavioral drivers when it comes to dealing with Gartner sales representatives, which puts those managers at a disadvantage.
For instance, an important piece of information is that Gartner reps are measured on NCVI, net contract value increase. NCVI is calculated based only on the total syndicated research revenues, seats, and clusters. Other purchases such as event sponsorships, consulting or SAS are not included in the calculation.
Gartner sales reps that achieve NCVI are golden. Those reps whose client contracts are less than the prior year’s amount are in danger of termination. That is why Gartner sales reps start getting desperate when it looks like contract renewals are going to be less than the previous contract.
It is possible to reduce spending – notice we did not say “save money” – with Gartner without damaging the ability to access analysts for influencing purposes. However, it is not as simple as trying to negotiate a better discount from the sales rep, which is quite difficult because of the pricing discipline mandated by Gartner’s CEO. Rather it takes intelligence about Gartner’s business and sales practices to know what cuts are possible and how to distinguish between which sales representative’s dire comments are real versus which are just FUD.
- Contract managers need to seek out information about Gartner’s business model
- Contract managers need to obtain and understand intelligence about what motivates Gartner’s sales reps
- AR and contract managers (if contracts are not part of AR duties) need to collaborate to ensure that contract cuts do not impact access to tools (e.g., inquiry) needed for influencing efforts
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Bottom Line: It is possible to reduce the spending with Forrester and Gartner, but traditional negotiating techniques are not effective. Rather, negotiators need to take into account changes in the marketplace and deep insights into the analyst firms’ business models to prevent wasting money on contracts with the Big Two duopoly.
Question: Analyst contract managers – Do you know how analyst firms’ sales representatives are compensated? Do some sales reps seem to act illogically?
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.
Actually, traditional negotiating techniques can be wonderfully effective, as long as you remember who is the customer. We just reduced our spending at Forrester to $0 for 2009. The value we got last year is by an odd coincidence equal to the money we are spending this year.
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