This post is one in a series of case studies on analyst relations teams have worked with their sales colleagues to grow the company’s top line. Readers that have AR-sales stories they would like to turn into case studies are encouraged to contact SageCircle. We will do the work of creating a case study at no charge.
About the Company: The IT vendor in this case study is a $6 billion per year IT professional services and outsourcing company that sells to governments and large corporations. The AR department consisted of one AR director and one AR coordinator.
Situation: AR was notified by Sales that a bid for a $35m services opportunity never materialized because a major analyst firm had not included the company on the short list. This was puzzling because the AR department had recently developed a good relationship with the analyst in charge of research for this market.
Action: The AR director did an inquiry with SageCircle to develop an appropriate course of action. After the inquiry, the AR director contacted her colleague in Sales to obtain more information. The underlying cause of the short list exclusion was that the prospect had outsourced several components of the vendor selection process to a major analyst firm’s consulting group. The analyst firm consultant’s job was to create the request for proposal (RFP), set up the vendor short list in collaboration with the client, send the RFP to the selected vendors, and then evaluate the responses. The client was to make the final vendor selection decision based on the work the consultant had done.
The key item found during the investigation was that the analyst firm employee was a consultant not an analyst. A follow-up inquiry with a SageCircle strategist provided the AR director with the critical insight that analyst firm consultants do not always work with the analysts, even though a close relationship between analyst and consultant is often implied when analyst firms sell consulting engagements. Quite often, consultants refer to written research and do not actually talk with analysts, even from their own firm. Exacerbating this situation, consultants often do not have access to the most current written research as well. The short list in this case was developed in collaboration between the analyst firm consultant and the client. The client already had two vendors in mind when the project started. The remaining three vendors who were added to the short list came from an analyst research note that the consultant used as reference material. Unfortunately, the extremely short-staffed AR department had not participated in an analyst survey, which meant that the vendor was left out of the research note. In this situation, the fact that the consultant was working only from written research worked to the detriment of this vendor.
Resolution: After discovering that the company was being left off of short lists being suggested by the analyst, AR made the time to brief the analyst. The tricky aspect to resolving this situation would be to provide the consultant with a way to include the vendor on the short list without having to admit that they had not talked with the analyst. The consultant went back to the analyst to see if “new” information was available about the appropriateness of this vendor being put on the short list. The analyst did give a recommendation that the vendor be added to the short list. The consultant, with the permission of the client, added the vendor to the short list and forwarded a copy of the RFP. Subsequently, the vendor was able to win the deal, worth US $35 million.
Return on Investment in AR: When examining the value of analyst relations for this company, there are tangible factors to take into account:
- The lack of bandwidth to respond to priority analyst requests for information can impact leads and sales opportunities in the future
- AR had acquired services from SageCircle and used access to strategists as an effective tool.
- AR had effectively built a relationship and briefed the analyst so that the analyst was in a position to accurately position the company on the short list when asked by the consultant
- AR was available to provide assistance to the company’s Sales organization
- AR reacted quickly and effectively to this particular situation leading to the company being put on the short list and having the opportunity to compete for the deal
While it was the company’s market-leading services and the sales representative doing an effective job selling that closed the deal, neither would have mattered if the company had not been able to get on the short list. The fact that the company obtained short list status was due completely to the effectiveness of AR. In this situation, it can be fairly argued that AR provided a $35 million dollar benefit to the company. The cost of this AR program is approximately $1m annually. Thus, investing in AR had a 3,500% ROI for the company – on just this one opportunity.
- AR departments should set up rapid response processes so that they can respond quickly to Sales.
- AR departments should be working with Sales to uncover additional examples of how the analysts are impacting vendors’ sales opportunities
- Vendors need to be investing appropriately in AR in order to generate leads and drive sales. A major target for investment should be headcount because building relationships and effectively briefing analysts are time-consuming activities.
- Sufficient AR headcount is also critical for responding rapidly to sales opportunities that are being impacted by the analysts. If AR does not have sufficient headcount then all resources could be committed to other activities and not be available to assist on multi-million dollar deals.
- Vendor AR and sales departments need to work together, developing processes and procedures to formalize how AR can provide assistance to sales.
- Vendor AR and sales departments need to educate sales representatives on the role of the analysts in sales cycles, how sales representative should respond, and the role of the AR organization in providing assistance.
Bottom Line: Saving a sales opportunity requires quick action including investigating the exact nature of the situation and reacting accordingly. The longer the period between the incident, when sales contacts AR, and when AR is get involved significantly decreases the likelihood the situation can be turned around.
Question: AR – Do you have an existing process for responding to requests from your sales colleagues?