What makes a good analyst?

Some further thoughts on my earlier post on analysts. I was thinking back to my analyst firm days and trying to decide if one could predict who would become a good analyst based on their background. The only trend is that there wasn’t really a trend – we hired people from all sorts of background and some were better than others.

What I have noticed, though, is that the analysts that did most end-user engagements and consulting tended to be those with an end-user background. They had the authority and confidence to make recommendations on what to buy.

Analysts with other backgrounds tended to be more market/industry based and provided advice to the supply side. There, issues of competitive pressures and market forces prevail, and such knowledge can be acquired by clever people. Useful to vendors, but not really for end-users.

Having said all this, I apologise to any former colleague who is offended by my generalisation. Eleven years in analyst firms taught me to judge people by their capabilities and competences, not by their background.

Questioning the value of analysts

Fascinating discussion on the role and value of analysts, initiated by an end user (for once) – James Gardner works as Head of Innovation and Research at Lloyds TSB.

Read the post in full to understand James’s frustrations in full. But, in summary, James is unconvinced by the quality of analysts (“IT analysts are little more than glorified journalists”), and even more annoyed by analyst firms’ name seat licence model. He finishes with “here is my message to the top tier IT Analysts firms we currently use: your time with us is limited if you don’t make it easy for us to get value from what we buy.” Wonder what the Lloyds TSB account manager at Gartner is thinking…

James’s post was picked up by, amongst others, David Rossiter who runs AR firm Sunesis and who was surprisingy supportive of James’s negative comments. Duncan Chapple, who runs AR firm Lighthouse, was unsurprisingly firm in his rebuttal. Read these posts to get a good view of both sides of the argument.

For my part, having worked as an end-user for 6 years then at analyst firms for over eleven years, I’m somewhat bemused by the debate. In a large sense you get what you pay for and what you’re prepared to accept as advice. If you find yourself taking advice from a junior analyst with little or no industry experience then you might want to validate that advice with a third party that does have such experience.

Analyst firms all have the problem of scale – how to share their scarce expertise with a large audience. This initially led to syndicated research and subscription services, and ultimately (in the bigger firms) to recruiting more junior analysts to do the legwork, while the star analysts headline research programmes. This model has worked well from a revenue and shareholder viewpoint, though gripes about customer service and access to analysts have been an issue for ages. (At Ovum (1995-2004) we implemented a customer account manager whose job it was to keep customers happy, in response to other firms’ alleged poor service.)

All of this points to the fact that not all analysts are equal, even within the big firms like Gartner and Forrester. There are the stars and there are the rest. Only those analysts with deep and relevant expertise have extensive influence over end-users. You just need to know which is which.

Welcome Barbara French

A belated welcome is due to Barbara French, who joined Influencer50’s San Francisco office in August. Barbara is well-known in Analyst Relations circles through her Tekrati service and blog. She’s already contributing a ton of brain power to our US operation, and is sharing this publicly via her new blog, Sway.

Please welcome Barbara to the fold, and check out her blog for new insights into the world of influence.

From Analyst Relations to Influencer Relations

Duncan Chapple posts an interesting comment on the expansion of analyst relations (AR) departments to a wider Influencer Relations approach. He notes that in starting from an AR perspective firms may miss out key groups of influencers, or gather them together as “left-overs”, and subsequently treat them inappropriately. I agree.

I think AR (or PR for that matter) can be a good starting point to adopt an influencer model. AR is a defined function within most firms, and (importantly) has a line-item budget allocation. There is also an established body of good practice and plenty of discussion to keep AR fresh and top-of-mind.

If you’re coming at influencer from an AR starting point, then SAP’s model is a great archetype to follow. Don knows that his model will evolve over time, as indeed it has done already, but you’ve got to start somewhere. Redefining AR as a sub-division of Influencer Relations is a start, if for no other reason than it identifies the gaps to fill.

I do think, however, that the ‘Relations’ model (AR, PR, media relations, investor relations, influencer relations) is often seen as an end in itself. At a practical level, in most IT organisations there is little coherency between relations and any marketing or sales activity. Sure, an analyst may be wheeled out at a lead generation event, or quoted on a product website. But it’s hardly integrated marketing.

AR and PR firms complain that they’ve been pushing an influencer model for several years, but firms lack the budget or insight to implement such a shift.

Not true – firms are deploying influencer models, but they are mostly not starting from within the AR and PR functions. They are typically emerging from operational marketing functions. Why is this? It’s simply because marketing is increasingly ineffective through the use of traditional models. It’s hard to differentiate a message, even harder to get that message heard, and even if it is heard, you’re unlikely to be believed. Why? Because it’s you that’s delivering the message. Get an influencer to deliver the same message, and it’s more likely to be trusted.

More importantly, by understanding why customers don’t buy from you, and then mapping influencer-led messages onto those objections, you can create a portfolio of counter-arguments based on what influencers are saying. That’s Influencer Marketing.

Unsurprising, then, that most firms truly engaged in an Influencer model are coming less from an AR or PR start, and more from a marketing start.

Influencer Marketing, as we define it, is precisely aimed at growing sales. It does this through a process of influencer identification and engagement, leading to an embedding of influencer-led messages that support and enable sales.

Influencer relations may get you on a shortlist. Influencer Marketing will make sure you get the purchase order.

Analyst of the year…

Better late than never, I’ve just read the IIAR’s Analyst of the Year results. Really interesting stuff – check it out. The rise of the smaller guys is remarkable. Maybe they’ve done a better job of engaging with the AR community…

The full report is here.

A good analysis of the results is here.

Who analyzes the analysts?

There’s a new blog to discuss analysts – analystanalyst. Immediately I like its tone: thought-provoking, humble, discursive.

Its key purpose is to “analyse the analysts.” You might assume that this was already being done by the AR firms: Lighthouse, Tekrati, Tiger Lily, KnowledgeCapital, SageCircle, and so on. I’m guessing the IIAR has some role in analysing the space too.

So is there a point to the blog? Indeed there is. Firstly it aims to hold to account analysts and their predictions/advice. All of the AR firms and in-house practitioners position analysts as essential. They are all pro-analyst. They all position analysts as key influencers, often generalising influence based on the firm analysts work for rather than their individual influence.

This, I believe, distorts the role and reliability of analysts. As analystanalyst says, “no-one analyses or compares (analysts) or holds them to their word, rather we just keep on paying them the money…”

Do I detect a degree of resentment in this statement? Why do “we just keep on paying them the money…”?

Analystanalyst is an anonymous blog (which is a pity, as this diminishes its credibility) but I’m going to guess that the author works for a vendor. This guess is based on the blog description stating that the author “comes into contact with analysts everyday, and more importantly with people who think what analysts say is gospel.” Most end-users don’t encounter analysts everyday.

So here’s a question: what would happen to your organisation if you didn’t pay the money? What’s the bottom line impact of cancelling your Gartner subscription?

One answer is that you’d lose the deep insight that analysts provide into market dynamics. Many (most?) vendors buy analyst research for market data, for strategic insight and for competitive analysis.

But how many of these firms justify the spend by claiming that analysts are influential on end-users?

So welcome, analystanalyst, whoever you are. You’re asking some tough but important questions.

Analysts and their share of influence

For the record, I’ve never said that analysts are no longer influential. (Some of my best friends are analysts…) What I have said is that the share of influence has shifted away from analysts towards a plethora of other influential categories, some new (eg. bloggers) and some old (eg. consultants, regulators, academics). In fact, what’s most relevant is that it is now possible, using sophisticated search capability (plus a good deal of research diligence) to detect influence (if you know where to look and don’t prejudge the answer).

I’ve also stated, in the book and elsewhere, that analyst influence is often overstated. Analysts are influential, but they are not at the top of the influence hierarchy. Indeed, I don’t believe there is an influence hierarchy.

HP, and now SAP, confirm that view that analysts are just one of multiple groups of influencer. It’s interesting that Don at SAP detected this 18 months ago and reacted by establishing an Influencer Relations division. What’s surprising is that so few companies have followed this lead. But I know many are watching this trend closely.

Analysts influence, as measured by HP

HP’s AR blog announces its research findings of its survey of what influences customers’ decisions to place a vendor on the short-list. Interesting stuff.

But note that while 55% of respondents say analysts do influence the decision, this doesn’t not equate to share of influence. It might be that 80% of respondents think peer customers have influence, or that 100% think consulting firms have influence, or that journalists have no influence at all.

Unfortunately, they don’t say who else also influences customers, or where in the ranking analysts come. I assume it wasn’t top…

The only tidbit they offer is that bloggers and social network sites rank 11th of the 14 types. Go on, HP. Tell us the order of influencers. We’d all love to know.

SAP Industry and Influencer Relations blog

Just picked up on Don Bulmer’s blog, courtesy of ARmadgeddon. Don is VP of Industry and Influencer Relations at SAP, and is a welcome addition to the otherwise sell-side blogs promoting greater focus on influencers. That is, Don is a practitioner of what others (me included) are preaching*. We can all learn from his insights.

A couple of things occurred to me when reading his most recent post:

1. SAP has evolved its Industry and Influencer Relations group from its Analyst Relations team. That’s one way of getting there. But not the only way. Influencer50 has clients that have arrived at Influencer identification & engagement from marketing effectiveness, sales effectiveness, PR, product marketing, corporate marketing and a bunch of other activities. That’s not to say that it’s a solution to all problems. Just that Influencers can be useful in a variety of ways.
2. SAP isn’t the first firm to evolve in this manner – there are several others. For example, Wipro has been doing this kind of thing since 2006. We wrote a case study of Wipro for the book.
3. Don says that when SAP identified its business and IT influencers “We were surprised to find that a number of our assumptions on decision making authority and influence were challenged.” That’s completely normal for this exercise – influencers are not obvious, and take detailed and diligent research to identify and rank. IBM’s Information Management group was “shocked” to discover it didn’t know its influencers (again, a case study in the book). So don’t embark on influencer identification expecting it to confirm what you already know.

And thanks, Don, for the link back to this blog.

*Before anyway starts, yes, we do use our own approaches. I’d like to think the book is a good example of what I call Influencer-led collateral…

Carter Lusher’s new gig

You may have heard that Carter, who ran AR at HP in the US, departed HP recently. He emailed me yesterday to point out his new role, heading up a reborn SageCircle AR firm. I read Carter’s blog while he was at HP, so his SageCircle Blog should be similarly stimulating. Good luck on the new gig, Carter.

Interestingly, the blog site names this blog as an AR blog, not the first time I’ve been pigeonholed as such. Lord help anyone visiting here expecting advice on how to run an AR practice. Read this post from Skip, then come back and see analysts in the holistic context of influencer ecosystems…

I also note that SageCircle blogs cite (what I guess are) SageCircle’s competitors – ASG, KCG, Lighthouse, Tiger Lily, etc. Good on you, SageCircle. It’s a small market and the more informed the target audience the better for all. Grow the pie, as they say.

It’s also good influencing strategy, as your competitors are usually influencing your audience. Engage with them, arther than ignore them. It nearly always has benefits.