Many AR professionals are planning for recession right now. Lighthouse’s assessment remains that we’ll see a very uneven dip, with recession in some of the western economies being balanced by growth in developing markets. The growing value of the US dollar is engineered by overseas national banks to constrict US exports, thus opening the field for European and Asian vendors to accelerate. How can AR professionals plan for this uneven economy, at a time when a number of vendors are starting to cut analyst relations functions in order to maintain spending with industry analyst firms?
In planning workshops we’ve helped run over the last few months, we’ve found that Lighthouse’s IDEAL methodology is a powerful and comprehensive for understanding the five elements of effective AR:
- Identifying the analysts;
- using measurements to Drive goals;
- Engaging with analysts on the basis of their information needs;
- Aligning AR to the rest of the business and, finally;
- maximising the Leverage of the benefits of AR.
Using this methodology can help AR teams get the fundamentals right and ensure now that they have the resources, plans, benchmarks, proofpoints and focus on results needed to withstand the pressures of the next year. For example:
- Identifying the analysts is crucial to doing more with less. Ideally, effort will be allocated to analysts in line with their potential impact on the firm’s profitability. Most AR teams are so focussed on a vast range of competing tactical priorities which outnumber their ability to respond. The result is often that they don’t take the time to tier strategically and, in that way, reduce the scope of their tasks. We’ve argued that most AR effort is wasted (here, here, here and here). Many attempts to tier analysts are well intentioned but mistakenly focus on vendors funded analysts with high media profiles, as we discussed in Tiers before bedtime. The solution is to use effective identification techniques like Analyst Impact Modelling and QuickTier to focus on analysts with sales impact. These approaches involve understanding which analyst and consulting firms are most used by your potential clients.
- Driving progress often requires goals. Goal setting is highly effective in almost any endeavour. AR teams needs to be able to answer questions like: Where are we not, compared with other firms? What is our profile in research like? How likely are analysts to recommend us, versus our competitors? What should our resourcing be like? What position to be want to maintain or rise towards?
- Engaging with analysts requires understanding of how to build rapport in recession; the right resources; and a plan to ensure the right frequency of communication with the most important analysts. Our series on recession AR stresses starting with analysts’ needs rather than those of the vendor, in order to generate a relationship based on reciprocity and exclusive information. Resources like tools, guides, a calendar of regular activities, and technology for virtual teams needs to be support with agreement on priorities. Engagement cannot be optimised without prioritised goals to drive the team forward.
- Alignment to the business means better understanding of business goals. Efrem’s AR Value Calculator, building on his work at Kensington Group, helps businesses to understand which part of their business are most sensitive to analyst influence. Often AR can make the most contribution to profitability by focussing not the core business but the growth areas. That means connecting up AR to sales, strategy and competitive intelligence, both as functions and as people. Stronger human support, amongst executives, key account managers and communications teams, also needs to be won.
- Finally, leveraging the AR programme also rests on a clear and common understanding of goals. If the organisation only values one AR output (only insight, or only media coverage) then AR really needs to align to that while, at the same time, educating the organisation. If your stakeholder don’t see the impact of analysts fully, or can’t see the benefits of AR, then you need to focus on how greater leverage can improve internal perceptions and, in turn, increase the resources available for AR.
To find out more about IDEAL, contact us.