Note: An earlier version of this post showed up as a comment on ARmadgeddon, which was later elevated to a full post. Then I posted a version on my former employer’s corporate AR blog. However, this is a topic that still generates heat so we are now posting it on the SageCircle blog to stimulate discussion.
AR and analyst blogs that begin with vigorous discussions about tiering often end in flame wars. The loudest protesters are usually smaller analyst firms and single practitioners who believe that the practice of tiering slights and excludes them.
What we have here is a failure to communicate.
There is no generally accepted definition of what “tier” means in the context of the analyst industry, so let me offer some points to get the discussion started and lance the boil of negative emotions around this concept.
At SageCircle we promote the best practice of “rank then tier” industry analysts. This is a two-step process. An analyst list is ranked based on relevance to what the vendor is trying to accomplish and then tiered based on available AR resources. Let’s analyst each part of that sentence.
“Trying to Accomplish” – Hopefully the AR team is aligned with its company’s or business group’s strategy and marketing goals, which will in part indicate which analysts are relevant. Strategy and marketing are not set in stone, so when they change, the analyst list and ranking can change, sometimes dramatically. AR teams need to review their lists frequently to ensure they continue to align with the company goals.
“Ranking” – Can be based entirely or partly on how directly the analyst covers a market or topic, size of their client base, overlap of the analyst’s client base with the vendor’s customer or prospect bases, visibility in the press or new media, public events she speaks at, demonstrated impact on sales deals and so on. Ranking criteria are subject to change over time and should also be reviewed.
“Tiered based on AR resources” – This is the tricky part and often not addressed. Not every vendor has sufficiently invested in AR staff to handle all analysts who want attention. As a consequence, the AR team has to focus on only those analysts it has the resources to support appropriately. If one spreads the peanut butter too thin, then nothing is accomplished. This is no different than segmenting the customer base. Sales provides dedicated teams to strategic accounts, others customers share the same sales rep and other customers are supported by a telesales call center. There are only so many resources to spread around.
Now look at this example of how the process works. You can click on the graphic to enlarge it. In market A, 15 analysts cover the market. An AR team has ranked the analysts 1 through 15 based on their relevance to the vendor’s objectives. Because the AR team consists of a single individual, the number of tier 1 analysts is 5. If the vendor decides to hire another AR professional – doubling this team – it leads to a doubling of tier 1 analysts. It is not that analysts 6 to 10 on the list suddenly got smarter or more influential, but that the AR team now has more resources to reach out to more analysts.
Bottom Line: If an analyst is told or suspects that they are not “Tier 1,” rather than getting mad I highly recommend they get more information. Ask about how the analyst list was created, which criteria were used, and how those criteria were weighted, and so on. You might discover this was not an arbitrary decision to disrespect you, but reflects a very dispassionate approach. It is also possible the AR team is not fully educated about what you cover or your publication schedule and thus does not have the appropriate data points for ranking your relevance.
Question: Analysts – How do you react if you suspect that an AR team considers you Tier 2 or 3? AR Teams – Do you have a systematic approach to ranking and tiering analysts?
Since 2000, SageCircle has helped analyst relations teams to focus on business value by encouraging innovative thinking that leverages insights and drives revenue.