The number of tech solutions is increasing exponentially with each decade (see Figure 1). As a consequence, an average tech client is facing more difficulty in the buying process and the degree of regret after the purchases is increasing.1
Buyers rely on Industry analysis to facilitate the buying process and vendors rely on them as part of their marketing efforts to communicate their unique selling points. For achieving this, establishing strong analyst relations is an important element and this is what most Fortune 1000 companies do for success.2
To provide an understanding for analyst relations (AR), in this article, we will explain what it is, its importance for tech companies and strategies for achieving successful AR.
Figure 1. Number of tech solution categories for the last 3 decades
What is analyst relations?
Industry analyst relations (AR) is the practice of building and maintaining relationships between a company and industry analysts who cover its market.
The goal of AR is to ensure that analysts have accurate and up-to-date information about the company and its products or services and that they understand the company’s:
- Competitive position.
This helps to ensure that the company is represented accurately in the analysts’ research and publications and that the company is well-positioned in the competitive landscape together with a successful media coverage. AR can also be used to influence analysts’ opinions and recommendations, which can impact the company’s reputation, sales, and stock price.
Paid and unpaid analyst relations
Big analyst firms like Gartner, Forrester, or IDC and many small firms work on a paid AR strategy.
Analyst recommendations can not be bought only with money and analysts include in their recommendations vendors that are not their customers. However, by becoming a customer of an analyst, vendors gain access to analysts and can shape their opinions.
Unpaid analyst relations with most analysts include vendor briefings where a product team gets a chance to brief the analysts on its solution at a specific frequency (e.g. once a year).
When vendors are a customers of that analyst, they get to have:
- Inquiries with the analyst to ask questions to the analyst. These questions can help the vendor team understand the analyst’s opinion about their domain, understand how the analyst views their company and inform the analyst.
- Vendor briefings as mentioned above
- Briefing feedback sessions to improve their next briefing
It is not necessary to pay all analyst firms that a company interacts with. However, it is important to have a budget allocated for analyst relations to effectively engage with industry experts who have
- access to information about what potential customers are seeking
- a distinct perspective on the industry
- a relationship with potential buyers who may be relying on the analyst for vendor recommendations
How do industry analysts work?
Industry analysts research specific industries and market segments to give businesses and investors knowledge and understanding. They can also provide:
- Guidance for buyers on making important purchases.
- Assessment of financial data to keep track of market share and industry growth.
- Help vendors to enhance their market positioning by offering advice on marketing efforts.
Also, industry analysts can take part in a sales funnel (see Figure 2 for a sales funnel representation in detail):
At the top of the funnel
When buyers are first exploring options, industry analysts play an important role by educating them about the specific industry and its products or services through analyst reports. They can help buyers to identify their key pain points, and offer expert guidance on how to address them. This is particularly valuable for new and emerging technology categories where buyers may not have a lot of experience and need expert advice to help them understand and solve their problems.
In the middle of the funnel
During the evaluation stage, when buyers are considering different vendors, industry analysts can have a significant impact on the buying criteria. They can assist buyers in creating a shortlist of potential vendors by having direct conversations with them, or by simply recommending top-performing vendors in their reports.
At the bottom of the funnel
At the final stage of the buying process, when buyers are ready to make purchase decisions, industry analysts can play a key role in determining the outcome. They can validate the vendor as a good choice, recommend alternatives, or raise concerns, which can impact whether the deal goes through or not.
Figure 2. The explanation of each stage in the marketing/sales funnel
Why are analyst relations important for tech companies?
Influencing industry opinion
Industry analysts are considered experts in their field and their opinions can carry a lot of weight with potential customers and investors. By building relationships with analysts, a technology firm can influence their opinions and recommendations, which can help to drive sales and investment.
Gaining visibility and credibility
By providing analysts with accurate and up-to-date information about their products and services, a technology firm can gain visibility and credibility within the industry. This can help to increase brand awareness and reputation, which can be beneficial for sales and investment.
Analyst relations can also provide a valuable feedback loop for a technology firm. Analysts can provide valuable insights and perspective on the market, competitors and trends, which can help a technology firm to better understand its customers and the industry.
Analyst relations also help firms to benchmark themselves against their peers and competitors, which can help them to identify areas of strengths and weaknesses, and to make informed decisions about their products and services.
7 analyst relations best practices for vendors
1. Develop a clear strategy
Identify the analysts and firms that are most relevant to your company, and develop a strategy for building relationships with them.
This is especially crucial for an early-stage company’s go to market strategy. Analysts can act as a market guide to potential buyers helping them explore new vendors. However, analyst relations cost time and money and especially early-stage vendors need to focus their efforts.
2. Be transparent and honest
Analysts appreciate when a company is open and honest with them. Avoid making promises that you can’t keep, and be transparent about your company’s strengths and weaknesses.
However, your competitors may try to oversell their capabilities and inflate their metrics. Analysts may be using those data points to rank different vendors. Therefore such actions may give short term advantages to some vendors. However, in the long run, we believe that trust-based relations will lead to better results.
3. Provide valuable information
Share valuable insights and information with analysts that they can’t easily get elsewhere. This can include things like market trends, customer feedback, and case studies.
4. Be responsive
Respond to analysts’ inquiries on time, and provide them with the information they need to complete their research.
5. Foster long-term relationships
Building a long-term relationship with analysts and a research firm takes time and effort, but it can pay off in the long run. Make sure to keep in touch with analysts even when you don’t have a specific ask or pitch.
6. Measure and evaluate
Track the impact of your analyst relations efforts and evaluate the ROI, this will help you to improve your strategy and measure the effectiveness of your engagement with the analysts.
7. Leverage AR and PR together
AR is more about sharing information that is specific and tailored to their needs, and that may not be appropriate for broader public relations messaging. This is because analysts have direct interactions with potential customers and can provide valuable insight on how a company’s products or services can address specific customer challenges, and how they fit into the overall industry landscape.
PR is used to create widespread awareness and reach a large audience. As a result, the messaging is typically crafted to appeal to a diverse group of people, not just potential customers. It can focus on attracting talented employees, investment, and increasing overall awareness of the product or company.
Thus, it is important to implement separate yet harmonious PR and AR programs together.
If you questions or need help regarding analyst relations, feel free to reach out:
Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month.
Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.
Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.
He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.
Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.
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