Tiering the Analyst Briefing List for Better Resource Allocation

As the number and influence of industry analysts explode, many Analyst Relations (AR) programs are confronted with too many analysts and too little time and resources. AR managers need to tier the analysts on their briefing list in order to prioritize the time and resources they devote to the analyst relationships that can directly impact corporate goals.

Research Topic

Analyst Relations Best Practices

Advice

In a perfect world, all IT industry analysts would receive as much personal attention as needed to fully persuade each of them on the issues of importance to the IT vendor. However, the unfortunate reality is that few AR programs have sufficient resources (e.g., AR time, budget or executive bandwidth) to achieve this level of interaction. Because most AR programs do not have a systematic approach to prioritizing analysts, they end up giving attention to the analysts who demand it, rather than concentrating on those analysts who are truly important to the goals of the AR program. We recommend that AR managers develop a tiering procedure to allocate attention based on the tier of the individual analyst.

How to Tier Analysts

The first step in tiering the analysts is to develop a ranked list of industry analysts, ranked by those who are more and less important to the vendor’s AR goals. Once a ranked list of analysts has been created, the next step is to determine what resources are available to devote to developing analyst relationships. The vendor can establish levels of resources that will be devoted to each tier of analysts on the briefing list.

The final step for tiering is to draw the lines on the list that demarcates the boundaries between the tiers. The bands for tiering can be quite broad or narrow depending not only on where analysts are ranked, but on how much time and money are available. It is better to concentrate on a fewer number of analysts by having a narrow set of tiering bands, than to spread yourself too thin over a large number of analysts and not be able to do an effective job of influencing any of them. To tier the list, first pick the most important analysts, typically the top four or five analysts, and designate them Tier 1. These analysts are the ones that will have most impact on the company’s objectives. Tier 2 analysts are typically with major analyst firms but do not have coverage that directly overlaps with the interests of the company. Or, Tier 2 analysts could be lead analysts with direct coverage who belong to smaller firms that do not have a high degree of clout with a vendor’s prospects. Tier 3 analysts, often a large group, are those that have some coverage but little visibility or clout in the marketplace.

It is important to note that any set of tiers is a snapshot, not a permanent ranking. Reasons abound for why a ranked list and tiering structure can become out of date: analysts leave firms or change coverage, the company changes its strategy or more resources become available to the AR program. As a consequence, AR managers need to revisit their ranked list and tiers periodically to ensure that the analysts are scored and tiered appropriately.

Allocating Resources Between Tiers

AR managers need to be ruthless when it comes to allocating resources between the tiers of analysts. The following recommendations are based on our observation that most AR programs are typically understaffed and under resourced. AR programs should plan on giving Tier 1 analysts 70% of the attention; Tier 2 analysts 30%; and Tier 3 analysts zero percent. In actual practice, the attention that Tier 3 analysts do receive will be scraps of time that are not used by Tier 1 or 2 analysts. In addition, content that is in newsletters or portals created primarily for Tier 1 or 2 analysts is available to Tier 3. AR programs need to be disciplined in budgeting their time and resources and not provide significant personal attention to Tier 3 analysts even if they are demanding it.

The table at the end of this SageNote lays out the various types of interactions that vendors have with analysts. These interactions are loosely grouped into three categories:

  • One-to-One/Personal. These interactions require dedicated personal attention of the AR staff and other vendor personnel (e.g., executives and product managers). This category has the least leverage, but is the most effective in influencing analysts.
  • One-to-Many/Mass Interactive. These interactions are effective for interacting at a shallow level with a large number of analysts in a time efficient manner. An example of this interaction is the teleconference, where many analysts can listen in and ask the occasional question.
  • None-to-Many/Automated. This category of interactions does a good job of distributing generic information cheaply, but does not address individual analyst’s specific research needs. Examples of this category include newsletters and analyst portals.

Tier 1 analysts have all interaction types made available to them all the time. Tier 2 analysts are typically limited in personal attention to the time left over from the Tier 1 analysts. Tier 3 analysts receive little or no personal attention.

Bottom Line

  • AR managers need to institute an ongoing process to create and maintain a tiering structure for allocating resources to the IT industry analysts who can most affect corporate AR goals.
  • One part of the tiering process will be educating colleagues and executives on analyst priorities.
  • Periodic audits of the AR program should be instituted to ensure that the standards for allocating resources are being used.


[1] There are many criteria for ranking analysts, such as prestige of the analyst firm, the focus of the individual analyst’s research, how often the analyst speaks at major conferences and volume of quotes the analyst has in the media. Please see SageNote¬†detailing how to rank analysts.

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