Tuesday, May 01, 2007

Why analyst tiering is crucial – oh, and there’s more to AR than just sales

There’s been a flurry of blog entries recently about the value of analyst tiering and how you should go about it.

Jim Zimmermann wrote about it on AnalystPerspectives.

So did Dom Pannell at ARcade and Jonny Bentwood on Technobabble 2.0. (Great to see you blogging btw Jonny).

Duncan Chapple added his thoughts over at Analyst Equity.

And of course no conversation in the AR blog world would be complete without ARmadgeddon.

It is also featuring a 'guest post' from Carter Lusher.

Me? Well, I have reasonably straightforward views about analyst tiering.

First, it's a good idea. I am continually shocked by how many PR firms seem to think that all analysts are the same and make no effort to differentiate between them (before Dom, Jonny and Marc etc jump all over me, I’m not talking about the PR firms that use dedicated AR specialists).

No company has infinite resource. They cannot possibly target every analyst in the market. It’s impractical. You have to focus your time, effort and money where it will have the biggest impact.

Targeting every analyst in the market is not just impossible, it’s also pointless. They’re not all of equal relevance or value. No one firm is ‘best of breed’ across every industry sector and vertical market.

Compare an enterprise software provider with an IT services company with a telecoms operator. They will all have different views on which firms are of most value to them.

It’s not just market sector either. It also depends on what you’re trying to achieve. The holy grail of analyst relations is to influence sales. Achieving this goal should be central to any AR programme.

But we mustn’t forget that analysts are incredibly influential in lots of other ways too. It shouldn’t just be about who’s got the most sway with the technology buyer.

Our clients also talk to analysts because they want to test out messaging or take the pulse of the market. Other times it’s because they want to support their media outreach. Sometimes it’s because they want to reach out to potential partners in the IT industry.

Increasingly, I explain to clients, prospects and colleagues that analysts are important because they “shape thinking.”

They shape the thinking of a technology buyer. That helps you sell more.

They shape the thinking of the media. That helps you achieve better press coverage – and it’s not just about the quote, it’s the whole way in which the journalist approaches the story.

They shape the thinking of product managers (and apparently Bill Gates). That means you go to market with better products and services – or at least with stronger messaging.

And what about channel partners? The City and Wall Street?

Analysts contribute to the buzz in the industry. Who’s hot and what’s not. The tech world is small. Connections count. And analysts have a lot.

So yes, tiering is important. But I don’t think there’s any real disagreement over that. What's more critical is that you review your targets and your tiering on a frequent basis.

Understanding the value and relevance of analysts is an on-going process. So is the identification of those who are most important to you.

While it would be nice to think that we can package up analyst firms in nice tidy boxes marked ‘Tier 1’, Tier 2’ etc and leave them be, it's unfortunately not that simple.

As to who are the Tier 1 players? Actually, there is no one 'right' answer. It depends on what market you’re in and what objectives you’re trying to achieve.

1 comment:

Carter Lusher said...

Hi David, Great post. It like we are very aligned on our thinking and approach on tiering the analysts.