Industry Analyst Programs for the Startup or Early Stage Venture

Favorable coverage by industry analysts is obviously quite valuable for any company.  But getting there can be time consuming and expensive.  Is it worth it for the startup or early stage venture when time and funding are in such short supply?  Well, it depends.  You need to consider your target buyer, the role analysts play in your industry, the competitiveness of your market, and how differentiated your product is.  Industry analysts are quite prevalent in enterprise IT markets, so if you’re selling B2B solutions into this market it’s important to consider developing an analyst plan.  

Why should you care about industry analysts?

Increased Exposure. Industry analysts are ferocious writers and they publish many reports, blogs and social media feeds that are reviewed by their customers, who are generally IT buyers.  If you’re lucky enough to have an analyst write a piece that favorably mentions your company, it can become an important sales tool for your field or channel – adding a degree of credibility from a neutral third party.  Their published reports will reach their clients, which often use respected analyst reports to help them generate a short-list of vendors to evaluate as part of a new IT purchase.

Refinements to Messaging & Strategy.  I’m frequently surprised by how many venture execs underestimate this value.  Analysts spend 50% of their day interacting with enterprise clients (a.k.a. your customers and prospects) and the other 50% interacting with vendors (a.k.a. your competitors.)  While most analysts have great integrity and will not share specifics from clients or competitors, they can provide valuable directional feedback about what they’re hearing and what they believe will resonate with enterprise IT.  Here is a key point: even if you disagree with them, it is important to understand their perception since that is what they will be broadcasting to the market.  While you are busy trying to influence their perception, you can at least arm your field and sales channels to leverage similar viewpoints or combat competitive arguments when engaging with enterprise prospects.

What Influences Industry Analysts?

I’ve spent a lot of time with analysts over the years and have actually become quite friendly with several.  Their opinions are generally shaped by the following factors… and in this order:

  1. Interaction with enterprise clients (your prospects and customers!)  They listen to what their enterprise IT clients are asking about.  They have their clients and prospects complete surveys.  And they poll their enterprise clients attending industry events.  This input, both quantitative and qualitative, from IT organizations coupled with their interpretations of it is the #1 influencing factor.
  2. Tracking search inquiries.  Most analyst firms maintain databases that store the number of inquiries on your company, your type of technology/product and your competitors.  They also look at search metrics on their website.  They mine all of this data collected from their own systems as an indicator of trends or hot vendors.
  3. Interaction with vendors.  This is important to understand – you are last in their list.  They know you are pitching them and trying to influence them.  Trying to sell them hard looks obvious.  Don’t do it.  You are better off sharing your vision, perspective on the problem and then invite your customers to share with them why they chose you over your competitors.  Pitching and selling hard only makes you look desperate and limits your influence.  A vendor’s best option for influencing industry analysts is to get your customers to call the analysts and share their success stories (see #1 above.)

Options for Interacting with Industry Analysts

There are numerous options for actually getting in front of the analysts.  Some require budget.  All require a lot of time.

Retainers.  While many balk at the word “retainer,” paying an analyst retainer can be a good investment that helps you quickly nurture a relationship with an influential firm and its analysts.  But do not assume that a retainer relationship will directly result in favorable coverage, or any coverage at all, initially.  Retainer relationships generally give you access to unlimited “inquiries” or 30-minute sessions with respected analysts in which you can ask any question you’d like.  Think of these as mini consultation sessions where you should feel comfortable asking candid questions about industry trends, competitors, positioning and messaging, launch strategies, and more.  These sessions should make you smarter.  By asking intelligent questions and having valuable interactions with an influential analyst you will be indirectly “selling” your company’s expertise and vision, but be careful not to abuse these calls – using inquiry time to pitch your latest product release will not be well received.  Keep in mind, simply paying monthly retainer fees without maintaining a regular cadence of asking questions (inquires) or pitching ideas (briefings) is a waste of money and will not result in you understanding analysts perspectives or them understanding your company or product better.  Unless you can support the relationship with meaningful interaction you are better off directing your funds and time elsewhere.

Pay for Play.  It’s no secret that some analyst firms do project work for non-retainer clients.  For start-up organizations looking to bring attention to their unknown firm, or to opportunistically shed light on a new market trend, third-party analyst research materials or case studies can be beneficial for short-term gain.  However, don’t be fooled.  I meet with many people who still believe simply paying an analyst firm is sufficient for getting favorable coverage.  At the most respected analyst firms, this correlation is not as directly related as many people perceive.  I do, however, believe there is an indirect relationship between funding and influence.  It’s this investment in time and bidirectional feedback that has the potential to increase your coverage – and to improve the way you position your company.  If you have limited opportunity and time to build a relationship with an analyst who’s influencing the market, it’s likely you’ll be left out of the discussion.  And be prepared to feel the backlash if your competitor does choose to invest the time.

Consulting.  Most analyst firms will sell consulting hours/days to provide their clients with helpful SWOTs on vendors in the segment, consultation on product plans and messaging, or in-depth analysis of recent research reports.  As I reference above, analysts spend their days with your clients and your competitors – two audiences you probably want to know about – so time spent diving deeper into particular issues and projects with them can be a valuable way to better understand the perspectives of influential analysts in your market segment and to form deeper personal relationships with them.

Raw Influence and “Guerrilla” Outreach.  Even if you do not maintain a retainer relationship, analysts can choose to take “briefings” from you.  They will select certain vendor requests to accept based on their research agendas, how novel they believe your approach to be, or perhaps to fill some hole in their understanding of the market.  Some analysts are active with social media, so you may be able to interact with them that way too.  Certainly reach out to analysts firms that you want to meet with, but keep in mind, some are limited to only taking one briefing per year from non-clients, so choose your content and questions carefully to make the best use of limited time.  Also, be sure to keep these briefings interactive, as nothing bores an analyst more than a one-way 30- or 60-minute PowerPoint presentation that gives them no opportunity to exchange ideas or provide feedback.

Lead-Gen.  Some analysts firms require that you be on retainer in order to engage their targeted lead-gen opportunities while others do not.  Firms that host industry events will generally allow any vendor to sponsor/exhibit.  I’ve found that many enterprise clients perceive analyst industry events to be the most valuable events, so if you’re considering events in your marketing mix, you should consider those sponsored by the analysts.  Believe it or not, exhibiting at an analyst conference does have some impact on coverage.  Their belief: if you are a growing and successfully accelerating vendor, then why would you not be exhibiting, increasing your awareness, and collecting leads?  They do see this as some indicator of vendor success and momentum.  However, exhibiting at some analyst events can result in a larger investment than participation in other conferences.  Make sure you get the most ROI on your participation by booking meetings with attending analysts in advance of the conference, selecting the most valuable materials and offers to promote to event attendees, and following up on leads in a timely manner.

Developing Your Industry Analyst Program

Like any program, a critical first step is to segment.  A single big firm, such as Gartner, Forrester, IDC, Ovum, or the 451, may have dozens of analysts that cover your industry.  Add other firms to the mix and there may be 100 analysts to worry about.  Do some research.  Try to identity the analysts that are writing a lot about your space or featured in the most press interviews.  Ask your customers/prospects which analysts they follow (if industry analysts play little to no role in the segment you are trying to reach, then invest your limited time and resources elsewhere.)  Pinpoint analysts that appear to share a similar philosophy with you and your company.  Based on your research, try to rank potential analysts and then meet with as many as possible to confirm your beliefs.

At the end of the day, most startup or early stage marketing teams do not have the capacity to invest in more than a small handful of meaningful relationships.  Segment the market of analysts into these buckets:

  • Trusted advisors – This is a small, manageable small group of trusted analysts.  I would spend 60-70% of your available analyst time with this group.  This group will help you shape your messages and go-to-market strategies.  Ask their opinions about messaging and positioning.  Take their advice and act on it.  They will likely know your competition and their offerings intimately.  They are also most likely to publish reports about your company or reports that are favorable about your approach.  You should also give this group of analysts early access to your customers, partners and product announcements.  Follow their published research carefully.  Tweet and socialize their work to show support.  When press ask about your product, direct them to favorable analysts in this group for an objective industry opinion about why your product is different from your competitors’.
  • Nice to Haves – This is a group of analysts that follow your space, but who may be less aligned with your philosophies or less focused on your core product areas.  Their coverage would be great to have, but they may be harder to influence and/or they may be less engaged, since your company is not in their target research area.  Analysts in this group should be pre-briefed or pre-notified via email/voicemail in advance of announcements.  Give them the courtesy of a heads-up, but after the messaging is locked down.
  • Opportunistic – This final group of analysts are roughly aligned with your industry.  Or perhaps they work in firms that are not the top priority by your customers or prospects.  They should still be considered important influencers, but focusing the same amount of time on them may not make the most sense for your business resources.  Despite time limitations, I would still recommend giving them a heads up via email or direct social media engagement just before – or just as – news is being issued.

I find a quarterly or bi-annual “Analyst Update” newsletter-type communication a helpful way to reach the entire analyst group without consuming too much time, but it should not replace direct 1:1 communication with your most important core group.  This newsletter could include updates on new customer wins, new partnerships product releases or other key metrics that shows your organization’s relative momentum in the market.

In the end, I do think industry analysts can provide good value for vendors – even for startups and early stage ventures starting to scale.  It takes a sustained level of effort to form the kind of relationships that will be mutually beneficial.  But keep in mind, analysts are very different from press.  They have critical opinions that are based on interactions and in-depth research with enterprise customers and vendors.  They will be the first to know your strengths and your weaknesses, so before you engage with analysts, be sure you are willing to have candid exchanges with them that sometimes will –and other times will not– go in your favor.  In the long run, time invested with analysts will come in the form of improvements to your positioning and strategy, a more informed understanding of your competitors, and –over time – increased exposure for you company.

Good luck!

- Special thanks to PR and AR pro, @agmorriso, for her help with this post.  This was originally published on Business2Community.