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Always Be Closing: use research to drive business leads

AR professionals can build sales by focussing on analysts who influence sales, and by turning the conversation to the impact of market changes on customers. Market analysts, quite understandably, look at the whole market and will welcome informed conversation with vendors that can speak strategically at the market level. However, to generate more sales recommendation they need to use their own clients’ successes as proof points to validate or challenge the analysts’ scenario for the market. As Alec Baldwin’s misanthropic sales leader Blake says in Glengarry Glen Ross: Always Be Closing.

Unlike interactions with journalists, it’s hard for spokespeople to continually bridge the conversation back to the vendors’ topics message without seeming dead-headedly rude. A glance at research, or even at a selection of analyst research, shows that, while vendors are hugely concerned with enterprises’ purchasing decisions, neither analysts or CIOs share the same narrow focus on the moment of purchase.

A great example, shown in a recent Lighthouse Research Round-up, is the market for customer relations marketing (CRM) solutions. For those who don’t know it, the basic trend is a movement towards software as a service (SaaS), provided both by SaaS start-ups and by traditional license-fee based vendors (who has to spread their resources between developing new SaaS functionality, maintaining the legacy product and cutting costs to respond to the recession. Traditional vendors are often reacting defensively, by developing customisation and vertical market feature that lock the customer in. Both new and old vendors are struggling to find systems integration and developments specialists who can build high-performance components and hybrid cloud solutions to support SaaS.

Industry analysts have to assess the impact of these changes comprehensively: looking at the vendors’ supply chain, the threat of new entrants or substitutes, the dynamics of competitive rivalry – and the position of buyers. Spokespeople can be comfortable at that strategic level of conversation because it reflects the lived reality of the organisation. It’s very powerful and rewarding for the analyst when a conversation is able to stay on a high level of market scenarios and segmentation: few vendors have spokespeople who can meaningfully add to an analyst’s understanding. That level of conversation helps a spokesperson to become a trusted advisor to an analyst.

However, when the analyst gets into conversations with clients those calls and meetings then to be focussed around specific client challenges. As well as broad market knowledge, analyst firms gather together deep, granular advisory and consulting expertise to help organisations align business and IT more effectively. If a vendor is ‘top of mind’ as having proved that they have developed or rolled out a solution to the client’s problem, then they will tend to be ‘top of list’ when it comes to recommendations.

Our general guidance is that all analyst interactions need to stretch from the market to the solution, even if the analyst wants to focus more at one end than the other. To do that effectively, AR people need to find client stories that prove or disprove the analysts’ ideas about the scenario unfolding in the market.

Let’s give some specific examples, using the CRM Research Round-up as an example.

  • Trend: SaaS is rising rapidly in the CRM market. Strategy: the Vendors could give specific examples of how it has helped clients to improve their business processes
  • Trend: Barriers to entry are lower in the market. Strategy: Vendors can explain how they are helping clients to integrate existing solutions with new applications.
  • Trend: Traditional software vendors are defensively accelerating the verticalisation and customisation of their applications. Strategy: Vendors could talk about how clients are taking advantage of this to deliver more value to the business.
  • Trend: Hybrid clouds allow (perhaps we should say ‘demand’) stronger data management and intregration. Strategy: Vendors can talk about their work with systems integrators to help clients improve their CRM architectures and interoperability.
  • Trend: In the long-run, the total victory of SaaS over license-fee software can be assumed. Strategy: Vendors can explain how they are working with corporate IT teams to fill the skills gap produced by the new technologies’ growing adoption and the intensifying need for IT to align to the business and learn to speak its language.

This basic method will be completely unsurprising to a salesperson: talk about the customer benefit, not the essence of the detail. Of course when I say vendors, this approach could apply just as easily to other kinds of solution provider.

As long as economic confidence remains low, IT procurement will increasingly be based on the RoI from specific opportunities to create, capture and sustain profits. Analysts are also shifting their conversation onto client benefits much more fully, and focussing on business goals more and the autonomous preferences of corporate IT less. Vendors needs to shift their conversation in the same way.

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At the crossroads: AR must help close the loop

The chart below illustrates the very uneven recovery from 2008′s decline in hiring of AR, IR and other marketing professionals. During 2009 and 2010 we have seen a modest growth in the proportion of vacancies asking for analyst relations skills, currently up 4%. ‘Along the corridor’, in public relations and investor relations, there was a smaller decline and a faster return to a stable plateau.  Although influencer relations jobs are up 264%, the chart shows that they are very few. But upstairs in marketing, there is 35% growth while advertising is up 48%. Closer to home, social media jobs are up 77%.

These data show the US job market, but the overall trend will be similar around the world. It’s important that AR people understand what these changes mean, and how to relate to them. Analyst relations is at a crossroads, and in the next few posts we discuss the opportunity facing the AR community.

Influencer Relations, Social Media, Analyst Relations, Investor Relations trends

Influencer Relations, Social Media, Analyst Relations, Investor Relations trends  


These data suggest that US firms are taking advantage of improved business conditions to invest in areas that are associated with business growth. AR, PR and IR are, generally, not seeing substantial growth. Social media can grow from a low base (as influencer relations jobs have done) but now social media hiring have overtaken AR and is three times higher.

As companies recover from the recession, demand generation is seen as key in driving up the value of business your firm has in the pipeline. Of course, that is just one element of sales and marketing process. However, PR, IR and AR are still, in most firms, tools for building awareness and interest. What marketing can do more broadly is to use both offline and online channels to link up awareness to sales. In Lighthouse’s opinion, it’s very useful to look at this in terms of control theory ideas like the closed loop, where feedback changes what the system is doing.

At the simplest level, you can close the loop in AR. By evaluating the outcomes of your activity, rather than just the volume of activity, you can use measurement and report to change both your AR tactics and how broader marketing campaign are done.  Of course the ideal is that AR and other activities can be tied back to lead generation and sales: However even small connections can be step forward for AR teams that are misunderstood as awareness-building rather than sales support.

There’s a lot that AR people have a huge opportunity with social media, and that’s something we discuss in our next post.

What control does AR have in a credit crunch?

This month’s IIAR forum will discuss ‘AR in a credit crunch’ (details below). It’s notable that the panelists aren’t AR managers, but analysts. It reflects the widespread expectation that professionals have to focus on presenting the value they add to others, especially in terms of attracting, retaining and developing clients relationships. I chaired a similar discussion for London PR and Branding, and there also the discussion was really about other people. The sort of questions that came up were an excellent indications of the mood in the industry:

  • Are people nervous about moving into new jobs
  • How can people feel more secure in their current situation?
  • Will there be employment opportunities in the next year?
  • What’s the value ratio between your firm and your competitors? And what does that mean if clients start to put more weight on price rather than quality?
  • Will marketing retain control  in the future, or will higher-ups start to determine things?
  • What’s the best way to demonstrate personal value?

The impact of all this anxiety can be positive. More people are thinking about how they can develop their effectiveness and connect up to others. We’re certainly seeing a rapid change in the way communications professionals are prepared to connect up in order to get more out of what they have. It will be interesting to hear the analysts’ perspective on all that.

This is the invite sent to IIAR members:

This is a reminder that our next London Forum is on 20th May and will focus on `AR in a credit crunch’. We are delighted to announce that David Mitchell from Ovum will be joining guest panellists Mike Cansfield from Forrester Research, Jon Collins from Freeform Dynamics, and Martin Hingley from Martin Hingley Research. The panel will discuss what challenges vendors will face in the current economic climate and how analysts can help them.

The location will be Edelman’s offices in London.

The forum kicks off at 3:45 p.m. and runs until 6:30 p.m., followed by an informal dinner.

Forums are open to IIAR members — members who would like to attend, please RSVP to me, stating whether you will be coming to the dinner. For further information on the IIAR and to join, visit our website at www.analystrelations.org. We also have a limited number of guest places available for those who have not previously attended a meeting — if you are interested in attending as a guest, please email me at hkirkman@analystrelations.org.

Show me the money: Recession shifts analysts’ focus from vendors to buyers

Show me the money! AR professionals need to start talking  more about changes on the industry side, on the analysts side. How things are changing for analysts – as businesses – is key. I think a lot of what AR folk are comfortable talking about is really about the interaction between the analyst and the user of analyst research. It’s important to understand how are things changing in the way that analysts, and end users, consume information, and how are they deciding on the themes that are emerging. However, there’s an interaction between demand and supply, between consumption and production, and so I think the two perspectives really need to fit very closely together. If we don’t do that, then we’ll struggle to understand the way analyst firms are changing.

The first point that I want to make is that there’s growing demand for analyst services, and that that growing demand is particularly seen at the division level. That conclusion comes from is the survey that we’ve done over the last couple of months. We’ve been speaking to analyst firms, and trying to find out what’s the perspective of industry analysts about how the analyst business is changing. Actually, analyst firms are very open about discussing – well at least they’re open with us – about discussing what kind of changes are they seeing in the market. We’ve had about 55 firms so far respond to our survey.

We’re in the middle of a very cautious economic climate. We’re seeing some analyst firms under some price pressure, but what we’re also seeing is rising demand for analysts’ services. So this means that organisations that are using industry analysts are using them more; they’re using them more deeply, at different stages in the decision making cycle. Even if, at the same time, they are trying to squeeze analysts down on price.

People in organisations that are subscribing to analysts are typically trying to either keep pricing stable or push it down. But, actually, what we’re seeing is that the use of analysts is really growing, particularly in the areas where analyst research is seen as being most critical for business outcomes.

One think I found interesting in our research, is that many analyst firms in the past have spoken about insight as being very much about the future, very mission critical, all about the big picture, but actually that is not what we found when we’ve asked analysts about where value seems to be highest to clients. Actually, the value of analyst insight seems to be highest at the level of the division, at the level of a business unit, so, sometimes, strategically at a relatively modest level, but actually very profoundly aligned with the current business problems that people are facing. So what we’re seeing is less use of analysts on the big picture things, and people really trying to focus on the decisions that they’re doing now, trying to see what they can do to make them right, and, in that space, it really seems to be growing demand for analyst services.

The complication is that the organisations that are using analysts are often under very substantial stress, so they’re really pushing to cut budgets on everything as much as they can do. This also means that organisations are trying to make the most of what they already have. So it might mean, for example, that instead of a company that’s got a question about something going to a niche firm, say, in the banking industry, instead of paying extra to go to a specialist firm as they might have done in the past, like going to somebody like TowerGroup, instead, they’ll be going to a big firm that they might already have a retained arrangement with, like Ovum or Forrester or Gartner, some other organisation with all you can eat inquiry time.

Oeople are trying to spend less, additionally, and they’re trying to get more out of their additional subscriptions, and obviously they are also negotiating much harder; there’s big disputes over a number of contracts that people have got coming through, and we’re seeing a lot of people saying that they wanted to take a quarter off, or they wanted to cut analyst firms off their roster. Some analyst firms are trapped: they’re being pressured from two sides at the same time; upward pressure in clients’ demands, which pushes up the cost to service the clients of analyst firms, but then also, generally, most buyers of analysts services are putting a cap on their spending – they can’t afford to increase their investment in analysts, even if they are increasing their use, so it’s really a very unfortunate time to be an investor in an analyst firm, unless you’re something like Gartner or Forrester where you’ve got relatively inelastic demand for your services, which means that you can actually continue to rise prices even if, overall, the demand for analyst services is growing modestly.

What does this pressure means for AR people? Our conclusions include:

  • Analysts influence on clients will increase;
  • Analysts will be less interested in emergent technology, and will have to focus more on technology that’s already in use;
  • AR people will have to shift their focus from telling analysts about new solutions, and towards helping analysts answer their clients questions.

To read more about that new orientation, read our series on Recession AR.

Larger firms cut marketing spend: AR must grow pipeline & retention

A new benchmarking study of business-to-business vendors in North America shows very different responses to the recession. 44% of firms will cut marketing while 31% will increase by more. Former Gartner country manager Ally Motz writes that “the average spend changes for the entire group was actually slightly positive, increasing by 0.4% – especially on pipeline acceleration and client retention.” $1bn-plus firms were most likely to cut their spending. Lighthouse´s free IDEAL Audit can help AR teams to realign their resources to new priorities. Continue reading