There are many reasons why companies, enterprises, and vendors buy analysts services. Unfortunately, many buyers do not carefully document their reasons for acquiring analyst services which often leads to buying the wrong services from the wrong firms.
Two prime beneficiaries of this type of mistake are Gartner and Forrester because they are often the only firms with any significant mindshare with buyers. They also have the largest sales forces knocking on doors. Because both firms are the highest priced – and raising prices further still – going with the well known brands as a default can be an expensive mistake. That is not to say that Forrester and Gartner cannot deliver business value at market rates on particular topics, but other firms might deliver equal or better advice for less money.
Buyers should carefully examine the desired outcomes for using analyst research and recommendations. For instance, if a CIO wants to ensure that her budgets for a industry specific technology are in line with others in her market, then going with a firm with a strong research team in that vertical is important. Another example is a vendor looking to expand into new regions of the globe. In that case, picking firms with analysts that actually live and work in key countries will be critical. While Forrester and Gartner might have some expertise in a vertical industry or say they cover a particular country, buyers will have to peel the onion to ensure that is really the case. You won’t know that you have sufficiently peeled the onion if you do not systematically determine your reasons for buying services.
Influence versus decision support – Most end-user clients purchase analyst services to obtain information and opinions to facilitate their IT purchases. Vendors purchase services to seek both information on products and market directions and also to obtain better access via inquiry for influence.
Too often vendors think influencing the analysts requires spending huge sums of money because analysts are pay-to-play. As a consequence these vendors tend to consolidate their spending with Gartner and/or Forrester to put as much money on the table as possible in order to buy love. This practice is neither necessary nor wise. Spending some money with the two big end-user advisory firms is a smart move because it provides client access that can be used by AR and spokespeople as part of the influence game. However, vendors need to spend only the amount required to buy this type of access. Vendors should not think that they are in an arms race with other vendors, competing to buy the best possible placement on a Wave or Magic Quadrant.
By dividing their budgets into two parts – influence and decision support – vendors can feel free to spread their spending among a number of analyst firms to get the best mix of information, intelligence and insights.
- Indentify the topics for decision support you will need over the next year (not always the same as last year)
- Analyze the type of information and advice you will require for that decision support
- Develop a weighting system so you can give some types of info/advice more priority than others
- Generate a scoring system so all firm responses will be consistently rated
- Create a separate list of the inquiry accesses needed for influencing.
- Create a formal request for information (RFI) or request for proposal (RFP) that will be sent to the analyst firms that incorporates both the types of decisions that will be made as well as your analysis of the type of expertise required
* For more in-depth information, review of contracts and advice on maximizing their purchases, SageCircle Advisory clients can leverage their inquiry privileges to work with a strategist.
Bottom Line: Buyers can avoid spending too much of their analyst budgets with the big brands by carefully identifying the reasons for purchasing analyst services. This information can be the centerpiece of RFIs/RFPs sent to analyst firms and built into purchasing decision frameworks.
Question: Do you send analyst firms formal RFIs/RFPs when you are purchasing analyst services? If no, why not?
This post is one in a series on the SageCircle blog about how buyers of analysts service, whether enterprise IT or tech vendors, can ensure they are might the right purchasing decisions. For those analyst clients needing much more depth than what is in this blog series, please check out the SageCircle AR Wiki where you can find a lengthy thread of articles that provide more depth and breadth on this critical topic including checklists and tools.
- Using five rights to avoid a wrong when it comes to purchasing Gartner or Forrester services
- Right reasons – Evaluate why you are purchasing analyst services
- Right services – Align the services you buy to better match the reason for info or advice
- Right firms – Search out alternative services providers that better match your reasons
- Right price – Acquire those services that meet your basics requirements
- Right usage – Drive usage of the services you buy to ensure maximize business value
Since 2000, SageCircle has helped analyst relations teams to focus on business value by encouraging innovative thinking that leverages insights and drives revenue.