Too many companies take a very automated, ATM-like approach to the ROI they get from industry analyst organizations they work with. For all the cash these companies deposit, they expect only a quote from time to time from their industry analysts, hopefully generated with the same efficiency of a 24/7 ATM transaction.
It would be cheaper for the analyst firms to have a random quote generator on their Web site that would automatically spit out a quote with the predetermined number of positive adjectives, depending on the analysts’ ranking of the company, than it would be to dog analysts to give positive words for a press release or brochure.
Outside of market forecasts that define their ranking in an industry, too many companies are using analysts only for the power of their byline in press releases and brochures.
Many analysts excel at customer service — their responsiveness is often what keeps these projects moving forward in client companies. That’s typically not an issue. What is a problem is that often the manufacturers and client companies asking for quotes have not even briefed the analyst about what they are asking for a quote about.
Ideally manufacturers engaged with analyst firms should have a stable of quotes they can draw from and, through a quick e-mail to the analyst firms’ marketing department, get approval to use it.
You Deserve More
Banks try gimmicks all the time to attract clients, and every once in a while the free toaster idea pops up again, with some local bank or savings and loan offering the free appliance if you sign up and deposit a certain amount in a checking or savings account.
Today it seems as if many manufacturers are content to just get the toaster — the obligatory positive quote — when they sign up with an analyst organization. There are companies who are in the US$1 billion+ plus range, and all they really want from analysts is the obligatory quote and nod of the head at conferences.
What a waste. It should be no surprise to these companies that when an analyst in their space publishes a report, they get mediocre or worse results, which touches off a witch hunt internally.
The companies that treat analyst firms as purely PR tools to an end completely miss the point and the true ROI of hiring an industry analyst firm in the first place.
Deposits That Don’t Accrue Interest
Companies that use their analyst firms just for quotes are not getting the intellectual and insightful bang for the buck they are entitled to and are a lot like those people who put money into a local bank for the toaster and forgot about the accruing interest on their savings account.
Imagine if you chose a bank not for its free appliances at sign-up but for the great interest rates on savings accounts, and none of that interest was paid? In essence, companies that rely on analyst firms for quotes alone are just like that example. They are stealing from themselves by not using the intellect and insight that analysts can provide.
The trouble is that many companies have vice presidents and C-level executives who are either too arrogant or too mistrusting of outsiders in general, and analysts specifically, or a combination of the two, to realize that analysts can deliver strong strategic value and insight into their businesses. Or, the PR teams are considered tacticians and not part of the strategic process, and worst of all, analyst firms are hired for hundreds of thousands of dollars just for the purpose of PR and industry relations. Trouble is, when firms are hired for this reason the relationship gets ignored except for the fast trip to the Quote ATM.
Best Analysts Know Users
I have also seen analyst firms get turned into Quote ATMs as a result of the analysts themselves, over time, getting complacent and not knowing users. Therefore they lose their influence on user’s technology buying cycles.
Companies know this quickly because conversations end without insight into what’s happening with buyers in the market. Companies can also tell by their pipeline reports over a year when an analyst firm has never been mentioned as an influence. Granted that is not a primary measure of an analyst’s worth, but if the analyst does know users and is respected in a given market arena, sooner or later vendors selling into the market will run into them in deals, mostly disclosed from the buyers as they look for guidance on what to buy.
Bottom line: Are you not using your analyst firms because you have lost respect for them and decide, either explicitly or implicitly, that they are only useful for quotes? Have you turned them into Quote ATMs because your company has decided they really are not that useful for any other task? If so, it’s time to really do an audit of the advisory and analyst firms you subscribe to and see if they really do have a handle on user’s requirements.
Only by asking this question over and over again will you get any lasting value from an analyst firm.
Louis Columbus, a CRM Buyer columnist, is a former senior analyst with AMR Research and is founder of LWC Research, a firm specializing in CRM, sell-side e-commerce, sales and product configuration and guided selling.