Join us for our second Sage Intelligence Briefing of 2021 featuring SageCircle Senior Advisor, Efrem Mallach, and CEO Sarah Shamouelian. Win-loss analysis is featured in every marketing textbook and explores reviewing a sales campaign, after a prospect has made a choice, to see what can be adapted to help with future campaigns. Every marketing consultancy[…]
During our “Managing Your Gartner and Forrester Expenditure” webinars and inquiries where we were helping clients with contract renewal issues, one comment we frequently heard was about the “great relationship” the contract manager had with a sales rep for an analyst firm. Often the definition of “great” turned out to be a rep that would not harass the client over “violations” of the contract, get the occasional freebie research note, or would bring a visiting analyst around. While these are all nice and useful, this did not strike us as being particular “great.” For both vendor and end-user clients these are more baseline activities that should be expected.
What we think would truly make a sales representative great is someone who make sure that the client got full business value from their contracts throughout the contract duration. Here are some questions you should consider to determine whether your sales rep might qualify as “great:”
- Does the sales rep actively work to demonstrate how the client has achieved business value and even hard ROI from the analyst contract?
- Does the sales rep provide monthly reports on utilization of the services (e.g., the number of inquiries conducted by each advisory seat holder)?
- Does the sales rep conduct a contract checkup at least quarterly?
- Does the sales rep actively push clients to use the services purchased?
- Does the sales rep proactively identify underutilized services and make suggestions to increase the utilization?
- Does the sales rep proactively identify underutilized services and suggest that the service be given to another person that might use it or suggest swapping the service for a potential more useful service?
- Does the sales rep work with you about incremental purchases in order to prevent redundant purchases or identify new users for underutilized services?
- Vendor and enterprise analyst contract managers need to communicate with their analyst firm account executives the expectations of […]
A common client inquiry we receive is in the context of someone negotiating with Gartner. Our clients want to know why in the midst of a terrible economic downturn, when vendors are cutting budgets left and right, that Gartner does not exhibit greater flexibility (i.e., cut prices) when it comes to contract negotiations. The short answer is that due to its end-user advisory market dominance – we estimate that Gartner has ~70% of the end user contracts – it does not have to be flexible.
However, this issue is a little more complex than slapping a “monopolist” tag on folks over on Top Gallant Road. The reality is that there is an effective duopoly with tacit partner Forrester which gives them both the flexibility to be inflexible with it comes to negotiations. The last time this market saw pricing and packaging that in anyway favored the buyer was the mid-90’s when Giga and later META used significantly lower prices and “all you can eat” research seats to take market share from Gartner and Forrester. Alas, today there are no such firms that can play that role to counter Gartner and Forrester. As a consequence, the Big Two’s CEOs habitually inform Wall Street that they are maintaining their pricing and discounting discipline.
However, it is possible to reduce spending – notice we did not say “save money” – with the Forrester / Gartner duopoly without damaging the ability to access analysts for influencing purposes. However, it is not as simple as trying to wrangle a better discount from the sales rep. Rather it takes:
- Knowledge about the firms’ business models
- Knowledge about the firms’ research methodology and analyst culture
- Knowledge about the true business value of […]
Controlling spending is a high priority for most vendors during a recession. For analyst relations (AR) teams this mandate causes angst because it means cutting spending with analyst firms, usually a big part of AR’s budget. Discussing this issue has become an increasingly common inquiry for SageCircle strategists as clients work through budget cutting scenarios.
One of the main sources of anxiety is the perception that analysts will start bad mouthing the vendor to prospects, making negative comments in the press, and cutting off AR’s ability to brief the analysts. This is usually an overblown concern as reputable firms will not damage their standing with vendors – a significant source of information and market insights – over short term contract spending changes. Analysts at the largest firms often do not know the size of a vendor’s contract with the firm and will not notice if the vendor cuts the contract by some percentage.
Unfortunately, there will be individuals who do resort to threats and making overtly negative comments about vendors in the press as pressure tactics to get contracts. Typically these individuals are […]
Inquiry: SageCircle received the following inquiry via e-mail: “Is our use/cost of the major analyst firms at about industry standard or better – especially as it relates to analyst contracts?”
“Are we spending the right amount on analyst contracts?” is a common question that SageCircle receives. This is one of a group of “standards” or “benchmarks” inquiries (see The Size of the AR Team [AR practitioner question]) that many AR managers wrestle with, often in response to their management’s demands for justification for budgets. While clients want us to provide a simple rule-of-thumb for analyst contracts (e.g., as a percentage of vendor revenue), we cannot provide it. Through our research, we have discovered that comparable vendors (in terms of markets, total revenues and number of employees) can have dramatically different analyst contract requirements.
The more important questions that need to be answered are: “Are the contracts providing us the services we need to reach our defined goals? Are we managing the contracts to get full value?
For end users clients, usually IT managers at large enterprises, the answers are much more clear cut. Even though enterprises use analysts for a variety of purposes (see Why technology buyers use the IT industry analysts), these purposes basically fall into either strategic and tactical decision support. Thus, spending can be focused on active topics and activities, especially where internal expertise is not available.
How much IT and telecommunications vendors spend on analyst contracts is dependent on a variety of factors. In this SageCircle blog post, we will focus on identifying the factors.
Breadth of usage – How many different functions in the company will analyst research and advice be supporting? The broader the usage, the more […]
Part 6 of the Purchasing Analyst Services series does not directly address buying, but what happens after the contract has been signed. By taking into consideration how you are going to drive usage of the services you buy, enterprise and vendor buyers of analyst services can feed that back into the purchasing process to ensure that you will get the right services from the right firms at the right price and maximize business value from the contracts.
One of the key purchasing mistakes buyers make is not examining past contracts and determining if the services were adequately used. While some larger clients of the analysts will survey users on whether the firms under contract had responsive client service, timely access to analysts, and maybe ask a subjective question about usefulness, they rarely evaluate usage patterns to see if seat holders actually use the services at an optimal level to get business value. If usage by particular seat holders is low, buyers need to reconsider whether or not these seat holders should receive seats at contract renewal time. One of the best ways to save money is to not buy services that do not get used.
In addition to analyzing usage patterns, analyst clients need to evaluate their training programs and their processes used to encourage usage of […]
In the past the way to avoid the price increases that Forrester and Gartner are initiating on a regular basis would be to use the usual purchasing best practices. These include waiting until the last minute before the end of the quarter or better yet end of the fiscal year to finalize a contract, playing one firm off another, signing up for a multi-year contract, and consolidating purchases to obtain a larger discount.
Alas, these techniques are not as effective now with Forrester and Gartner as they were in the past.
While there are hundreds of analyst firms, with some large ones like AMR Research and IDC, the unfortunate reality is that when it comes to the market for end-user advisory analysts, Forrester and Gartner have achieved a de facto duopoly. Because the market for […]
One method for avoiding the price increases that Forrester and Gartner are initiating on a regular basis is to diversify your sources of analyst research and advice. The one usual negotiating trick of playing one vendor off another probably won’t work with Gartner as CEO Gene Hall has been quite emphatic in his quarterly earnings conference calls that discounting by sales reps has been and will continue to be sharply curtailed. This means you may be better off looking to “boutique” firms for some services. There are hundreds of analyst firms in the market, many with very smart analysts and interesting research. Besides a lower price, there are other potential benefits to going with other firms including: flexibility in service delivery, better customer service, and unique insights.
The difficulty of purchasing from a smaller firm is discovering them in the first place. Forrester and Gartner (as well as the vendor-centric IDC) have tremendous mindshare from tens of thousands press quotes and growing sales forces that drive their brand equity. Very few firms outside of the Big 3 invest in marketing and sales that would give them the market visibility to become a regular addition to buyer short lists.
The next issue is finding alternative firms that can deliver services that meet your needs. Many analyst firms specialize in advising […]