• Recent Posts: Influencer Relations

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Negative Research Note Threatens Incumbent Status

icon-dollar-euro.jpgThis post is one in a series of case studies on analyst relations teams have worked with their sales colleagues to grow the company’s top line. Readers that have AR-sales stories they would like to turn into case studies are encouraged to contact SageCircle. We will do the work of creating a case study at no charge.

About the Company:

The vendor in this case is a billion-dollar computer hardware and services company that sells to large enterprises with a direct sales force. The analyst relations (AR) team consists of one AR manager plus some support from the vendor’s PR agency.

Situation:

The problem started with a very negative research note from a major advisory firm that raised FUD (fear, uncertainty and doubt) in a financial services industry customer. The vendor was the long time incumbent supplier of hardware infrastructure. The negative analyst commentary called into doubt the vendor’s ability to remain a viable player in the market. While the analyst had become more skeptical of the vendor’s capabilities, this research note was unexpected due to the harshness of its tone.

The fallout was immediate and dramatic. The EVP of IT at the customer waved the research note at the vendor’s major account team leader, threatening to put future business up for bid. The revenues at risk were $10m+ in annual hardware, related software, and services sales.

Action:

Because the sales account manager knew exactly how the problem originated, he started searching for an internal resource for assistance. The account manager did not know about the existence of AR, but simple started asking everybody and was eventually pointed in the direction of AR.

After investigating the situation, AR pulled together a portfolio of counter-balancing research from competing firms… and colleagues of the negative analyst at the same firm.

AR coached the sales account manager how to de-position – in a diplomatic manner – the negative research by using the portfolio of positive research. AR also recommended that the account manager suggest to the EVP that she use her analyst inquiry to call certain other analysts to get a broader perspective. The EVP did call the suggested analysts.

Resolution:

Because the problem analyst was being deliberately provocative and expressing mainly subjective opinion, exposing the customer to other analysts’ more measured commentary was an effective countermeasure. The FUD was eliminated. Bottom line was the vendor remained the incumbent supplier.

Lessons Learned:

Even a strong customer-vendor relationship and long time incumbent status can be negatively impacted by a sufficiently dramatic research note by a well-known analyst.

It is possible to counterbalance one analyst with other analysts, including the problem analyst’s colleagues.

Valuable time was wasted as the account manager searched for someone to help with the problem.

SageCircle Technique:

  • Set up at least a pilot AR-Sales Partnership that leverages the existing sales infrastructure so as not to expose AR to requests from individual sales representatives
  • Assess the potential impact of any very negative research from well-known analysts to determine whether it will be necessary to equip sales with counterbalancing research
  • Coach sales how to use counterbalancing research and not just send it to the prospect or customer.

Bottom Line: Analyst created FUD could have jeopardized a long standing and large customer relationship if the account manager had not found AR. AR teams need to reach out to Sales to educate at least the managers and key sales support staff about what to do if a sales team member encounters negative analyst research.

Question: AR – Have you used one analyst to counterbalance another analyst’s negative research?

 

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