Three Myths About Working with Industry Analysts
Industry analyst firms are major forces in B2B technology. From corporate strategy to end-user purchase decisions, analysts influence many actions in the broader tech market value chain. To give an idea of the industry’s reach, market share leader Gartner reached over $6B in revenue for 2024.
Obviously, I have a bias. I started my tech career at IDC and have worked with several firms over the years, even managing analyst relations on an interim basis at one stop. However, I believe that having experienced both sides of the relationship has given me a unique perspective about what works, what can be improved, and how to approach analyst relationships for successful outcomes.
One thing I’ve learned is that many core stakeholders debate the role of the analyst ecosystem in today’s go-to-market lifecycle. With every budget dollar under scrutiny, vendors sometimes look to analyst spend as an area to trim. Part of the reason for this can be traced to common misconceptions about the role analysts play in the marketplace and their effectiveness.
In this blog, we’ll cover three persistent myths about analyst firms – and the reality of analyst value.
Myth #1 - Analysts are “Pay to Play”
Perhaps the most enduring myth surrounding analyst relations is that higher vendor spend leads to prime positioning in key market reports. It’s an understandable assumption. After all, many market leaders do invest heavily in analyst relations.
Nonetheless, analysts take their pledges of impartiality very seriously. When tasked with covering a market, the vast majority seek to understand all of the relevant vendors. To truly know and advise on a market, it is critical for analysts to synthesize all of the specializations within it. Having a compelling value proposition with clear messaging will reach a savvy analyst, regardless of the vendor’s level of engagement with them.
When paid engagement is not an option, strategic unpaid outreach can go a long way. In other words, if you can’t invest money, invest time. Proactively schedule briefings with targeted firms when there are announcements and updates of note. This is particularly true in more crowded markets where niche vendors can get lost in a maze of names. Regardless of spend, vendors that can get in front of analysts and make an impression are the ones that are more likely to get written about.
Of course, there are many benefits to subscribing to analyst services. Analyst advisory imparts valuable insights on product-market fit, customer needs, whitespace opportunities, and competitive landscape, among other things. Using this market intelligence input to better reach and serve customers puts vendors in a better position to do well in analyst reports, but ultimately because of their efforts.
Myth #2 - Analysts are too far removed from the technology
Another common myth about analysts is that they sit in ivory towers issuing grand proclamations about technology they may not truly understand. One might ask “what is the value of taking advice from someone who doesn’t use my product on a regular basis?”
Analysts join their respective firms from a wide variety of backgrounds. Many join from the industry they cover - often from product management/marketing, engineering, or pre-sales/post-sales. Some have demonstrated very deep skills in research and business strategy across multiple areas. Yet others join fresh out of university, building domain-level expertise from the ground up.
And all of this is ok! An optimal analyst team will provide a compelling mix of technical, business, and analytical expertise. Analysts are perpetual students dedicated to the craft of knowing markets inside and out. Vendors should be able to count on analysts to give them well-informed perspectives that are not easily seen from the inside.
Additionally, a competent analyst firm will have visibility to what all relevant competitors have in market and in many cases, what they are working on. This is true for product development, partnerships, messaging, distribution, and other areas. Most analysts also regularly speak to tech buyers, end users, and prospective customers. Obviously, analysts cannot and will not divulge protected information to their clients. Even still, it is important not to underestimate the insight that this visibility brings.
Analysts are far from removed from their areas of coverage. They are active participants in their respective market ecosystems, going both broad and deep in their research. Analysts are looking at impact from all angles, from broad macroeconomic indicators to discrete vendor decisions.
If vendors have a relationship with an analyst team or firm that really does not seem to know their market, chances are that this firm is a poor fit. One way to help determine if an analyst is seen as a leader in their domain is to periodically check out the ARInsights Power 100 list, which ranks analysts by multiple metrics that reflect their reputations and reach.
Myth #3 - Immediate leader status should be the goal
Before I jump into this myth, let me be very clear that analyst engagement should never just be about getting mentioned in a report. Analysts are an important component of the market intelligence equation (a topic I will cover in my next blog!). However, an important goal of many analyst relations programs is to get coverage in high-visibility reports (e.g. Gartner Magic Quadrant, Gartner Cool Vendors, IDC MarketScape, Forrester Wave, etc.).
To this end, vendors often pursue analyst relations with a single-minded goal of getting mentioned in a report and/or finishing as a leader in a market assessment. Analyst inquiries and briefings are treated solely as a means to get that ideal placement. Predictably, many vendors find that they do not get the instant gratification that they seek, particularly in more mature AND crowded categories. Similarly, analysts will see through engagements that are veiled attempts to engineer report placements.
Again, earnest relationships are at the heart of productive analyst engagement. Having a value proposition resonate with an analyst team might take time. Here are some things to keep in mind:
Report lead times are long. If a vendor begins an analyst relationship and hears that a Magical WaveScape is coming out in two months, chances are the report has been in motion for several months. It is hard to jump into a report at the last minute. Even if a vendor succeeds in doing so, the quality of coverage might be less than that of a firm that participated in the full process.
Don’t ignore the non-technical advice. Some vendors take umbrage at being offered advice on messaging, positioning, and marketing strategy. It’s true that vendors shouldn’t blindly follow everything an analyst says. However, it is important to consider the vast perspective they bring from their experience and that they are ultimately invested in the success of their market.
Repetition is key. Chances are that there are many vendors (client and non-client alike) fighting for mindshare with the same analysts. For new market entrants, it is especially critical to be persistent when building awareness and understanding of their product.
Even if an offering is substantially differentiated, it may take three or more touchpoints with each analyst to really establish a place in their conscience. Of course, paying clients are going to have an easier time with this. But don’t let that discourage you. Analysts are passionate about their coverage areas. If you can prove your solution is innovative and effective, you will establish that understanding and be positioned to be fairly reflected in their reports.
Leader status in reports is coveted and is what most vendors strive for. Keep in mind that having a fair and detailed write up that demonstrates relative strengths is just as important. High rankings draw potential buyers in, but they ultimately want to know how solutions align to their business requirements. Having fair, nuanced coverage with quotable snippets can go a very long way.
Analyst Relationships Provide Deep Value
Regardless of a vendor’s size, age, or niche, there is tremendous value in reframing these myths and engaging with industry analysts:
Time spent with analysts pays off. Even if not a paying client, spending time briefing relevant analysts builds their awareness. Not only does it increase the chance that a vendor will be mentioned in a report but it can also lead to referrals to potential buyers. Moreover, non-client vendors just might leave the call with some complimentary advice.
Analysts add context. Vendors are experts on their products and likely know quite a bit about their competitors as well. However, analysts reach the far edges of their markets, getting insider views of competitors, customers, investors, partners, and resellers. A good analyst will be a responsible steward of this visibility and share a synthesized point-of-view that uncovers new insight.
Focusing on nuanced coverage matters. Everyone wants to be “high and to the right”, but in any given report cycle, only a small handful of vendors will make it there. Thus, it is important that vendors ensure that analysts understand their solution and target markets well, so that analyst coverage reinforces their core value propositions.
While analyst firms must continue to find new ways of demonstrating value, they are still an important part of the go-to-market ecosystem across tech categories. Commit to being strategic and dynamic about how your firm approaches analyst relations. By doing this and avoiding falling for these three myths, your organization will be well-positioned to achieve success with analysts.
Are you looking to level up your analyst engagement? Connect with Greenefield to see how we can help.
