Throughout my career as a CEO and earlier, when I was in Product Management, and Mergers & Acquisitions (M&A), I managed to gain significant value and also greatly amplify our company success by working closely with industry analysts. Building and managing these relationships is an art, more than science, and requires consistent effort.
I am surprised how many startups and even larger companies fail to leverage leading analysts and miss out on tremendous benefits and opportunities. It is not a topic often written about and a helpful “how-to” guide is long overdue!
First… Why listen?
- Learn from my experience: I have managed to get into several magic quadrants, be profiled as a cool vendor, influence new investors, and closed millions of dollars in new business as a direct result of industry analyst support, so this article could make a big impact if you read along.
2. There is upside for your company: Support from industry analysts can significantly impact your valuation on a financing round or liquidity event/acquisition by a strategic buyer.
This same support will also raise the visibility of your company, which can — in turn — open the door to interest from new customers, companies seeking to partner, and is great marketing. Put simply it gets you a seat at the table whereas otherwise, you would not have been considered.
This is an article for founders and other hi-tech executives focused on how to maximize growth by leveraging industry analysts. Analysts are — after all — a significant part of go-to-market engagement and success.
First, who are they?
Professional industry analysts are firms composed of experts in specific industries. They make money by publishing research, advising clients, and holding events. Analysts have been a major part of the industry as buyers need to understand the complex and rapidly changing vendor landscape. In this article, I will focus on hi-technology company analysts. To be more specific, analysts covering SaaS, software, hardware, and cybersecurity, but this advice is broadly applicable to industry analysts.
Companies that buy and use technology products are often looking for guidance and advice from analysts and will pay for analyst research or meetings to obtain guidance on selecting the right technology and vendors. Demand Gen Report’s 2019 B2B Buyers Survey found that reviews from industry analysts are having a growing impact on purchase decisions.
Vendors that make technology must find and establish relationships with the right analysts so they get included in their published research and potentially recommended to prospective customers.
Examples of large analysts in the enterprise IT (information technology) space include Gartner, Forrester, and IDC, but there are a plethora of others including small boutique firms such as 451 group, Frost and Sullivan, and countless others. In my opinion, market share and influence are most impacted by Gartner, and then Forrester, given their sheer size and subscriber base. Focusing on niche firms has not been a “needle mover” for many vendors- as they say,” go big, or go home”. To add context, Gartner is the largest firm by a significant margin with over 2,000 analysts. Forrester is the second largest firm and even at that size, their annual revenue is equal to Gartner’s year-over-year growth ($500m vs $4 Billion). Conversely, most boutique firms have less than 30 analysts, and therefore, limited ability to influence the market.
What prevents companies from being successful?
Many companies — even with experienced executive teams — do not know how to build relationships with analysts, or are mischaracterized or do not get the recognition they deserve.
Here are some common reasons why companies are not successful or fail to invest:
- It’s just “pay to play” — one of the most common reasons why executives and marketing leaders don’t engage with industry analysts, is that they feel they are paying just to “get into the game”. This is, in fact, inaccurate as you can brief and engage almost any industry analyst without subscribing. Analysts are interested in learning about new companies and find value in these interactions. Discovering and writing about hot new companies and technology is part of their value. In addition, you can get feedback from the analyst and learn from your interaction — these are symbiotic relationships and should be viewed as such. Most Gartner “Cool Vendors” are early-stage companies who haven’t paid a dime for the relationship, so don’t allow this sentiment to hold you back. Sadly many of the smaller firms are pay to play and should be avoided. It is these poor business practices that detract from the value that can be gained by the more mature firms like Gartner and Forrester.
2. It is too expensive — While membership to Gartner or Forrester can cost $50,000 annually, these same firms offer special pricing for early-stage companies which is more affordable. In addition, subscription packages are often negotiable, and you can easily swap “research” for webinars, and other co-marketing activities which can help with lead generation and creating near-term ROI for your investment. Last, research shows that many marketing programs and MQL’s fail to convert, so consider whatever you may spend to create analyst influence as part of your lead generation plan.
3. It’s too early — I recently spoke with a CEO at a disruptive security company with several million dollars in ARR. When I asked about the analyst relationships, he responded that it was “too early.” This is a company entering a multi-billion dollar market with a better “mousetrap”, and having the support of industry analysts could be a massive growth driver. Relationships take time to build, and I would argue that it is never too early to start building these important relationships.
4. “They don’t understand our market” is another common reason for avoiding engagements with analysts. Industry analysts have their own informed viewpoints and your current market view or approach to a market may differ. Don’t let this dissuade you, it is your responsibility to educate the analyst on your strategy, positioning, and approach. Sometimes you can educate them on how your views differ or realize there may be an opportunity to adopt some of their beliefs and thus get aligned with their viewpoints.
How to Succeed in 3 Simple Steps:
- Develop and document a strategy — while this sounds obvious, I have yet to encounter a company that has a cogent strategy for effectively engaging with analysts. As you create one, communicate strategy and ongoing execution to ensure that your team is aligned. This should include:
- What you are looking to gain from the relationship?
- Identities of possible analysts to build relationships with. Stack rank analysts and not just firms. For example, you should engage with a top analyst at Forrester over an analyst you would just manage at Gartner.
- Define the lexicon of possible activities with each analyst (once you identify the right analysts, go beyond the standard inquiry and briefing. (see number 3 below for more details)
- Clear ownership! Define who will own the relationship. I find that relationships relegated to manager-level team members aren’t as successful as those where executives are involved; analysts appreciate access to key executives. Ideally, a manager should coordinate all activities with constant involvement from executives.
- Refine your messaging and positioning and align it horizontally and vertically across your organization so there is one voice.
- Nail the vendor briefing. Continually practice and improve.
- Put together a 30, 90, 180-day plan of attack including a calendar to track conversations, key learnings, and results.
- Avoid : Boutique analyst firms who lack influence in the market, junior analysts with no clout
- Follow up often with analysts and proactively send stories from the field such as customer wins, new product use cases, and any interesting statistics. This will keep you top of mind and greatly increase your chances for being mentioned in research as well as gaining favor with the analysts you grow your relationship with.
- Remember, it is a journey, not a sprint, don’t expect great results in a quarter. This will be an ongoing investment that can yield tremendous results.
Magic Quadrant for Influencing Analysts
2. Involve your C-Suite and Key Stakeholders — The more involved your team is and how much you invest in the relationship will determine the return on investment. Treat your investment like a financial bank account — only here it is your “influence” bank account. The earlier and more you put in the more you will get in the long run.
- Identify the team members — especially the busy executives from your company — you plan on involving, their respective roles, and the commitment you’ll need from each.
- Listen as much as you talk. Analysts have a wealth of knowledge that very few can replicate. Many often spend 20–30 hours a week advising top-level buyers at the world’s top organizations which amounts to hundreds of conversations a year. Incorporate this knowledge and what you learn into your strategy and roadmap planning.
- It is ok to disagree, but don’t argue or dismiss their advice. The worst thing you can do is be ‘blacklisted’ by an analyst or worst have them have a negative view of your organization in any way. Keep it civil and professional and do not make any grievances public. Worst of all, never attack the analyst personally.
3. Pick the right activities — use your time efficiently and effectively.
Involve analysts as a “virtual team member” and engage on strategic topics (roadmap, acquisitions, positioning, joint events)
- One of the best activities is to invite analysts to speak with your customers. You can ask your customers to proactively engage with your analyst, or arrange a call to let the analyst hear a case study or feedback from an actual project involving your products. This is a welcome break from their daily calls and allows them to hear from an actual customer and not your own team.
- Activities like joint webinars are great, you can commission analysts to create an ROI analysis of your top customers, invite them to speak at your customer conference or even an internal strategy meeting. Note: While these activities don’t ensure positive coverage, it’s a great way to involve them in your strategy and build a meaningful relationship. This should be across all of the firms you plan to influence.
- Continually follow up on progress with your analyst and make them be part of your strategy as well as execution.
- Provide constant feedback on how they are enabling you to grow and exceed your goals. Analysts very rarely get any feedback after a call ends. Providing this input will build long-lasting bonds.
Where to go for more help?
My team at High Tide Advisors helps companies dramatically enhance your company’s go-to-market. While you can create a great product, if your messaging is hard to understand, pricing is complex or you aren’t executing across sales and marketing efforts, you won’t achieve the success you deserve. Our team consists of veteran leaders with experience as CEO’s, COO in leadership roles at high-growth companies in Sales, Marketing and Business Development. We are excited to share that renowned Gartner Analyst Brad LaPorte has joined High Tide Advisors and helped create this article. If you would like to formulate a winning strategy and execution plan to get better results from analysts, drop us a line, or read more about what we are doing to help companies achieve success with analysts. Thanks for reading, and I hope you learned something valuable.
If you like this story, please share it with your network. You may also enjoy some of my other recent articles: Is your Go-To-Market Failing?, Do you REALLY Have Product-Market Fit? and viral Product-led growth article: Why Your 2021 Marketing Plan Sucks