I have been engaging in analyst relations for the past couple of months, after a thread I read on GH. Before I started, I tried to learn the best practices via Google Searching, but I couldn’t find anything practical.
So, I decided to write an introduction to Analyst Relations (AR) specifically for software companies targeting enterprises. This article should help you create a strategic plan, prioritize the right firms and follow the best practices to maximize your chances of success.
If you are not targeting enterprises, this article won’t be applicable to you, so you can stop reading right now.
What is Analyst Relations (AR)
Analyst Relations is the process of engaging and building relationships with consultants and analysts at research and advisory companie, such as Gartner and Forrester. The benefit for doing so can be inclusions in reports, in-person recommendations and high-end word of mouth. I will talk in more detail about these later on.
These companies publish reports every now and then, for various sectors and topics, analyzing enterprise software solutions, comparing them and recommending them to clients, based on their needs.
From my experience, the process is very similar to trying to build a relationship with a fund or a bank.
The concept is that you are building a relationship, where you can both benefit. They recommend suitable software solutions to their clients, keeping them happy and you get clients.
However, since it’s a relationship (and not a business transaction), there is no guarantee when or if at all you will get clients and some goodwill is needed from both sides.
I talk more about that in the get started section.
Who can benefit from Analyst Relations
AR is one of those topics that’s really only applicable to B2B software companies selling to enterprises.
The biggest reason to do AR in my opinion is if your customer-base cares what the analyst firms think. If your product costs $75,000 and your customers are consistently calling up Gartner and Forrester to make sure they’re making a good decision, then it’s a really good sign you should invest in AR. Otherwise, it’s probably not worth it.
I don’t think there’s a magic AVC (Annual Contract Value), but it has to be high enough to justify the price tag that AR firms charge. You have to feel out whether sales reps are being asked “What does Gartner say about you?” or “Who is your Gartner analyst?“
Apart from the above Rob said, it doesn’t really matter if you have a deployed software or a SaaS (cloud) one. The enterprise has started valuing the cloud equally and sometimes more than deployed…
Other elements matter more, like security, years in business and more. I talk more about that in the requirements section below.
Who are the major players
If not, you might want to research and try finding niche analysts, firms or consultants.
Niche analysts and firms
Niche analysts and firms are companies or independent professionals that cover a specific type of software, like Learning Management Systems, or a specific industry, such as HR.
I’d suggest talking with them before moving on to the bigger players. If you are too small for them, chances are you won’t succeed with the bigger players either. Also, they can be a “training ground” to learn the ropes in Analyst Relations before moving on to the big ones.
Some individual analysts might not be worth it, you will have to do some due diligence here.
Regarding finding these niche firms I’d suggest trying the following methods (these are what worked for me):
- Check your competitors’ awards and mentions (if they have such a page on their website). Is there an organization you don’t know? Look it up. It might be such a firm.
- Google “industry” or “type of software” + “market research” or “analysts consultants“. Wade through the 1st page of Google fast and move on to the 2nd, 3rd, etc pages. This is where you will find them. Try adding geolocation keywords as well, such as “UK“.
- Read your industry’s publications and blog posts and try to get lucky, by landing on an article that mentions one or more of these niche firms.
Once you find them, start talking with one of them to learn the ropes and then move on to the next. Be careful though, once you decide which one to invest in, focus 90% of your time and money only on this one and keep in touch with the rest to expand if/when needed.
Building too many relationships at once can drain you, unless you are experienced in it.
Let’s see if AR is right for you.
Is Analyst Relations right for you?
Should you allocate time and money in this activity? As Rob said above, it’s a strictly enterprise activity. And by enterprise he meant software companies targetting *really big* organizations.
To target them and be a good match, you usually need a mature software, with emphasis on security, support and track record.
Also, if you lack something in security or support that’s really important for enterprises, AR might not be for you. For example you need to have phone support.
Lastly, I’d draw the line at $5M ARR (annual recurring revenue). If you are below that, I wouldn’t consider getting into Analyst Relations.
Some elements will depend on your industry and competition, but here are some requirements that seem to be universal:
- Above average security. The higher the better.
- Support and training. Phone support, live chat, 24/7 as much as possible and training the client for your product.
- At least 1 major client. The more popular the client is the better. Ideally a brand that virtually everyone in the world knows.
- Over $5M in annual recurring revenue.
- Be at least 3 years in business. The more the better.
- Selling services on top of your product. These services should constitute around 30% of the revenue your company generates.
Building an Analyst Relations strategic plan (how to get started)
To build an effective strategic plan for Analyst Relations you have to know first, where your product stands, what separates it from your competition, your prices, revenue streams, etc.
After that, ask your sales people if they are getting any questions or mentions about Gartner, Forrester or IDC. Maybe they have heard that your product has been mentioned in any of their reports?
Prioritize the big 3 above based on what your sales people tell you. You might want to buy a subscription before reaching out to them. Rob says:
You typically have to pay a hefty subscription to get access to an analyst firm.
As a software company, when you buy an AR subscription you get access to a library of research. It can be very useful, but IMO with so much great content on the open web and so much intelligence we can gather from our own customers (via product usage, NPS, etc.) it’s rare that I find myself thirsting for the research.
AR is mainly about influence and awareness. Making sure you have a steady cadence of contact with your key analysts. That they know what your products do and can clearly articulate the value to the customers that ask about you.
Now, if your sales team hasn’t been asked before about one of the 3 major firms and you still want to go after AR, start by identifying and engaging with smaller firms first.
Put them all in a Google Doc or Spreadsheet along with industries, cost and other info that matters and start engaging with them. For the small ones, buying a subscription before reaching out to them is not necessary.
You can start by simply reaching out to them, introducing yourself and showing interest in exploring if there is any way you can work together or asking about their services/subscriptions. They usually offer services to vendors that can be valuable outside of building the relationship.
Then you schedule a call, they ask you questions about your company and then they tell you what they do and how you can benefit. They know you are out to forge a relationship with them and they are interested in that too, so there is no reason to hide from it.
It’s good practice having these firms interview you and ask you questions, as you can uncover and identify potential gaps and opportunities in your business.
If these smaller firms have never heard about your company, but they have heard about your competitors, chances are you are missing one or more major marketing channels, that your competition is using successfully.
To sum it up, analyst relations (AR) are solely for software companies that target enterprises and have a very strong and mature product.
You must have invested heavily in security and support. You must also have big clients, many users, millions in ARR (annual recurring revenue), some branding and a 5-figure budget to spend.
The biggest research and advisory companies are Gartner, Forrest and IDC, but there are also smaller and niche ones that depend on your industry.
Anything else you’d add?
Let me know in the comments below.