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What to do when you only have a few dollars for AR

rocket-for-startups.jpgThere are many IT vendors that are either launching or reinvigorating their AR program for the IT industry analysts (e.g., Gartner, Ovum and Yankee Group). It is typical for nascent AR programs to have a small budget to work with. This heightens the importance of spending decisions because when there is little money the margin for error shrinks considerably. 

The first priority for AR managers is that they demonstrate effectiveness early to get more support for AR. This requires a ruthless focus on the key success factors and how money spent can help achieve those factors. While there are many reasons why IT vendors invest* in AR, more often than not the initial reason is to obtain increased visibility with the analysts talking to their prospects. This post focuses on that premise.

First, spend your money with the right analysts. There are three primary types of analysts: end-user advisory, market research, and white paper for hire. It is the end-user advisory firms that have the hundreds of thousands of personal interactions with IT buyers every year. Thus, dollars spent with those analyst firms will have the biggest payback by obtaining relationship-building tools. Advisory firm contracts provide the ability to do inquiries on a frequent basis, which are invaluable for gaining insights into the analysts’ thought processes and research agenda, getting “top of mind” presence, doing spoken word audits, and developing a personal relationship. These types of activities will greatly enhance an IT vendor’s visibility with their primary analysts leading to analysts being more comfortable recommending the vendor to their clients.

Market research firms are less important because their clients are vendors and financial firms. The exception is when the market researchers are affiliated with an end-user advisory firm (e.g., Dataquest and Gartner) where a well-crafted and keenly executed “market driver” study can be used to influence the advisory analysts. In this case, the AR program might be able to leverage their company’s research/competitive intelligence’s market research budget for this project.

White paper for hire firms should NOT get any of your meager AR budget. These analysts’ primary clients are vendors’ marketing and sales departments, not end users. Thus money spent with these firms does not secure you access to analysts talking to buyers. This does not mean that these white papers with analyst logos are not useful. However, these white papers are really a tool for sales and marketing, their budgets should be paying for the white papers.

While spending money with an IT analyst firm will not guarantee coverage, it does guarantee non-briefing access via inquiry. As a consequence, AR managers with small budgets should concentrate their spending with the top analysts that talk to the buyers and thus impact a company’s top and bottom line.

* Yes, it’s true. Spending on AR is an investment, not an expense. SageCircle has developed models that illustrate that AR can easily have a return of 500% or more – pretty good return for any dollars spent.

SageCircle Technique:

  • Identify all uses for analyst services, focusing on ways to build AR’s credibility
  • Identify budgets to be tapped, both AR and non-AR
  • Specify how usage of analyst services will be maximized

Bottom Line: Whether an established company or a startup, an IT vendor launching an AR program often has a limited “starter” budget. It is important that a nascent AR program focus its dollars on what will help it demonstrate early success.

Question: Do you have a formal AR plan that incorporates analyst services spending requirements?

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