Analysts, influence and the future for Ray Wang

If you follow the analyst community you’ll know that the annual Analyst of the Year results were announced last week. Congrats to Ray Wang and Jon Collins.

The survey raises some interesting points for discussion, such as:

• Will Ray Wang be as influential next year, after his departure from Forrester? The obvious answer is “No.” Though Ray’s expertise and independence may remain undiminished, his market reach is undeniably affected. Reach is a factor of two main considerations: personal reach and company reach. It’s possible to score highly on one or both dimensions, but they shouldn’t be weighted equally. Personal reach is more important – it means that the individual him/herself is recognised and listened to. It is very difficult to gain and retain. Company reach is useful, and in some cases it masks a lack of personal reach – Gartner is a good example of a company whose reach exceed that of most of its analysts. So I expect Ray’s overall influence to decline, as he will not benefit from Forrester’s reach. Of course it depends on how well Altimeter performs, and whether it’s four analysts really do have personal reach and influence.
• Will the IIAR survey decision-making users of analyst information, rather than vendors? The survey is open to “anyone who works in analyst relations in any country, either in-house or at an agency/consultancy.” This means it points at the vendor sell-side market only, and excludes decision makers at buy-side firms. It would be more interesting and useful to determine the actual influence of analysts in real decisions.
• Will, as Vinne Mirchandani suggests, the IIAR open out its remit to include other types of influencer? Analysts are just one type of influencer, albeit an important one. For example, at Influencer50 we’ve seen the rise of consulting firms positioning themselves as analysts and commentators, as a strategy to create a thought leadership role (and very possibly to counteract the influence of analysts with decision makers).

I sense that the next year will be very important for the AR industry.

Why I don’t like the SIM Score

I’m prompted by Emily Riley at Forrester to discuss Razorfish’s Social Influence Marketing (SIM) Score, as published in the Fluent document.

The idea behind SIM, according to the Fluent report, is that firms employ “social media and social influencers to achieve the marketing and business needs of an organization.” No problem with that, though the focus of the report is anchored in consumerland.

A firm’s SIM score purports to “measure favorable impact of your brand.” Emily paraphrases the SIM methodology thus:

1. Calculate the number of positive, negative, and neutral conversations happening for your brand
2. Use the formula (Positive + Neutral – Negative)/ Total brand conversations
3. Calculate the number of positive, negative, and neutral conversations happening for your industry
4. Use the formula (Positive + Neutral – Negative)/ Total industry conversations
5. Divide lines 2/4 and you have your SIM score

Razorfish hopes that SIM will become as valuable as Net Promoter Score. I doubt it.

Firstly, NPS discounts passive (neutral) opinions: it only looks at positives and negative (subtract one from the other to get your NPS). SIM includes neutral scores and counts them, effectively, as positives. Thus it inflates scores. Intuition tells me that it would be better to exclude neutral opinions or, even better, count them as negative.

Why? Neutral opinions are as bad (from a marketing viewpoint) as negative ones. Lukewarm, ambivalent, disinterested – who’d want these sentiments recorded as positive? In fact it’s harder, arguably, to detect neutral opinions because they’re rarely declared. Negative opinions are often expressed (vociferously!) but few people make the effort to declare their indifference.

The second problem with SIM is its quantitative nature. It’s fine using quantitative measures for NPS because it surveys customer experience. SIM scans the web and notes all instances of chatter on your brand, whether the chatterers are customers or not, influencers or not. All of my experience in researching influence points to the use of numerical indicators as extremely poor in determining influence:

• Quantitative measures treat all comments equally, but influence is not spread evenly and equally. Some people’s opinions count for more than others. SIM doesn’t account for uneven distribution of influence.
• The number of times an individual declares an opinion is not proportional to their influence. Counting instances of sentiment inflates the importance of frequent contributors, rewarding ‘noisy’ people.
• Quantitative measures are too easy to fake. Social media users do this all the time, ‘sharing’ their list of friends with strangers to inflate their apparent popularity. It’s the same as exchanging links on web sites for ‘Google juice.’ It would be relatively straightforward to inflate positive or negative opinion of a brand in this manner.
• Numerical measures are prone to spikes of activity, and are therefore time-sensitive. Positive sentiment may rise after a public launch of a product. Negative opinions may peak after a lousy financial result. So the timing of SIM is critical, if it’s to be used as a benchmark for social media marketing. It also means that SIM can’t be used fairly as a comparative measure against other brands, whose cycle of product launches and financial results (and plenty of other factors) are out of step.

The third issue with SIM is that it doesn’t measure real experience. NPS surveys real customers and asks a simple question: “Would you refer this product/service to a friend or colleague?” It’s a qualified opinion, based on real experience. SIM measures all instances where a brand is mentioned, irrespective of whether the contributors are customers or not. Contributors may have no direct experience of your product, and they may be repeating hearsay or perceived wisdom. They may have an agenda to promote – they may, for example, be customers of an alternative brand or even employees of that competing brand. How can you be sure that these online conversations reflect a fair and true picture of attitudes?

Why has Razorfish implemented SIM in this way? My guess is that it measures what it can measure. It’s easy to measure social media because, by its nature, it’s public and accessible. It’s also online, which makes distance and physical proximity irrelevant.

It’s an order of magnitude harder to measure other aspects of influence, such as expertise and persuasiveness, or influence exchanges that occur face-to-face. But that doesn’t mean we shouldn’t try.

Laura Ramos on B2B Marketing Trends

Laura Ramos runs Forrester’s B2B Marketing programme. I follow her research closely as, although it’s US-centric, it produces some fascinating data on what B2B decision-makers do. Laura’s latest comments focuses on B2B Marketing Trends. Pretty much consistent with what we see in the UK – the highlights are (with my notes):

• Commoditisation leading to a lack of differentiation, which leads to marketing all sounding the same (so true);
• B2B buyers buying like consumers. Using peer reviews and social media as decision making inputs (perhaps less true in the UK?);
• Ad avoidance and sales call avoidance – using web sources to delay contact with vendors (I think there is generic ‘marketing avoidance’ going on);
• Globalisation. Uh huh.

Laura suggests that the outcome of these trends will be the death of B2B Marketing. I agree, at least insofar as B2B marketing can’t exist in the way it does. The justification that marketing “creates demand” is slammed by Laura as a cop-out. It needs to be more measurable in sales terms and more aligned with sales.

I’m looking forward to Part 2 of Laura’s comments…

Influence in SMBs

Barbara has picked up on the new CMB Sage Market Pulse study, which shows who SMBs use in making IT decisions. A high dependence on independent consultants and peers, followed by (whisper it) vendors’ sales reps.

The influence of vendors on their own markets is typically understated. A typical buying pattern of an SMB is: get quotes from three vendors. A consultant or systems integrator or VAR may provide this quote gathering and assessment service by proxy. But that’s pretty much all there is to it in the supply chain.

Little analyst penetration at this price point. But what’s stranger is the absence of journalists and bloggers, much of whose information and opinion is widely available and free. And where are the other sources of advice, such as industry associations, government agencies and other influencers not in the supply chain. Was this an omission in the survey?

Anyway, the survey supports Forrester’s own study last year, which found similar sources of influence, though in a slightly different order.

The main point is that SMBs are influenced by different folk than larger organisations. Indeed, SMBs are not a contiguous group, and there are many variations in influence dynamics within segments of the broad SMB space. So watch out if you’re targeting firms other than enterprise size – you may be surprised who pop up in the influence ecosystem.

Review of H+K’s Influencing Technology Decision Makers research

There’s a really interesting video and white paper produced by Hill and Knowlton, the PR/AR firm. The title is Influencing Technology Decision Makers (sounds relevant!) and the work is based on a research project carried out on behalf of H+K.

On the whole it is a really thought-provoking piece of research. The interesting bits, for me, are (in italics, with my comments):

• Previous experience is the primary driver for decision making. I agree, and where a decision maker doesn’t have this experience they have to borrow it from another source – influencers.
• Decision makers are cynical towards sales collateral and marketing messages. Yep.
• There is increasing influence of blogs, even in the C-suite. I disagree – we’ve completed a round of research for a client which shows that, except in France, blogs have little influence at the C-level. Blogs do tend to influence more technical audiences, and where blogs are part of the cultural make-up of the market under investigation (i.e. predominately online markets).
• Gartner and Forrester are the leading analysts, and there is not much between them. Gartner has greater influence on the IT managers, while Forrester is more widely read in the boardroom. Interesting. This indicates that Forrester has caught up with Gartner, and has more credibility with senior decision makers. We certainly see these two far and away the biggest influential analysts.
• Events are not that influential. I think this referred to analyst events, but I find it’s true in general. Gartner Symposium is the only analyst event that occurs in our research on a regular basis.
• The Financial Times is the most influential non-IT publication. The Wall Street Journal leads in the US but trails the FT in other countries. In the UK, the Sunday Times, Telegraph and The Economist ran highest. No real surprises here, except perhaps for the poor showing of the Journal outside the US.
• Print media is more widely read than online media. I agree, though the boundaries are often being blurred. As far as I know, the study didn’t track whether a respondent that read the FT did so in print or online format.
• Analysts are important throughout the decision making process. Absolutely. In the book we’ve mapped various influencer types to the decision making process, and analysts play more roles than any other type. It’s important to understand, though, that although analyst firms play various roles, it’s not the same analysts that play all roles.
• Use the media and analysts to influence decision makers, not to please your CEO on tour. Hoorah! If vendors take a decision maker focus, rather than creating noise to satisfy their own internal ends, then they might not annoy their customers and prospects so much. It is refreshing to hear this from a PR/AR firm.

The big criticism: where are the other influencers? This study only looks at the media, analysts and blogs. What about consultants, resellers, peers, user groups, academics, procurement experts, gurus and thought leaders, or the vendors themselves? I’d love to see the research run next year with this broader remit.

(A few words on the methodology. The research involved 420 interviews, across the UK, US Canada and China, and were conducted using a mix of online, face-to-face and telephone interviews. Interviews were also split by C-Suite and IT managers, and by large enterprises and SMEs. The sample looks a bit thin, when spread across all of these splits. But good food for thought.)