Top 5 Myths About Analyst Relations

5 Common Myths and the Hard Truths about Analyst Relations

In the media universe (owned media, earned media and paid-for media), Analyst Relations (AR) activities generally fall under the “earned media” category. Industry analysts play a key role in shaping perceptions, and in the cases of Magic Quadrants and/or Waves, analyst reports can literally swing sales one way or the other. Therefore, having a solid AR program in place is crucial to building trust with your customers, driving thought leadership, and growing sales. 

Unfortunately, many executives harbor mistaken beliefs about analysts and their services. And, because of these misplaced assumptions, leaders make poor decisions about how to best maximize their AR programs. In order to combat this and set the record straight, here are five of the most common misconceptions about industry analysts and analyst organizations.

#1 – Analysts are “pay-to-play” (aka “coin-operated”).

Without doubt, this is the most common myth about analysts and their firms. Making headlines was a lawsuit claiming in part this very issue. (See Vendor Sues Gartner over Magic Quadrant ‘Pay to Play’ Model) Ultimately, the case was dismissed, but the mistaken belief lives on with many in leadership positions.

The truth is, reputable analyst firms, such as Gartner, IDC, Forrester, Frost & Sullivan, and many more are influenced by what companies do, how companies communicate and how the market responds. None of these analyst firms are influenced by how much an organization pays them (or doesn’t pay), nor can a ranking in a report be changed by how much money a vendor spends.

By recognizing this myth, executives should focus AR budgets to be effective without having to be wasteful. Additionally, this helps properly set expectations, knowing that you can’t buy your way into an analyst report or leadership category. To be clear, coverage in any major, non-sponsored analyst report is EARNED media.

#2 – All you have to do is “wine and dine” an analyst to win favorable commentary.

If an executive believes an analyst firm is pay-to-play, then they likely believe in this myth – all you have to do is take an analyst out golfing, to dinner or some other entertainment venue, and they will write wonderful things about your company.

Not only does this myth cross all sorts of ethical lines, but it is simply not true. That being said, yes… analysts do enjoy a nice dinner, and a gift bottle of wine never hurts anyone. But, that is where it stops. Reputable analysts have a duty to be forthright and honest to their customers – not any specific vendor. Trust is the currency analysts deal in; without it they fade away and become noise.

Executives, along with marketing and communications professionals should focus on building positive relationships with key analysts, rather than push an ulterior agenda that they can just buy their favor.

#3 – More briefings!

A common misconception is that a vendor should be briefing their key analysts ALL the time. In fact, “number of briefings” is an often-used AR reporting metric. The problem is, analysts are bombarded with briefings all the time, and guess what? They all sound the same. No vendor is going to stand out with an analyst by conducting a myriad of one-dimensional briefings, especially when done for the sake of having a briefing versus having a substantive discussion.

What most vendors fail to recognize is the fact that analysts talk to numerous customers, subject matter experts, channel partners and other vendors in ways that a single vendor simply cannot do. Analysts are a wealth of knowledge, yet their knowledge often goes untapped because a vendor just wants to talk about themselves. “Look how great we are!” Do you think that’s strategic or memorable for the analyst?

Without a doubt, briefings have their value, but what executives need to focus on is building a rapport based on inquiries. Successful AR programs are built over time around smart questions that tap into the analyst’s psyche.

#4 – Only the most senior executives should talk to an analyst.

Sorry C-suite, but you’ll need to check your ego at the door for this one. Sure, analysts want to hear from top executives (often for strategy), but that is often not where they go for the good stuff.

The reality is, many C-suite executives believe analysts are nothing more than sales targets. Management just need to sell the analysts on why their company and product is the best. This does not lead to substantive conversations. Polished BS gets a vendor NOTHING when it comes to building trust, and in many situations, this approach backfires leading to analyst distrust and vendor disdain. Give an analyst great data or compelling information, and you’ll have an extraordinary relationship.

Successful AR programs incorporate top executives when needed, however best AR practices will regularly utilize subject matter experts who can educate and arm an analyst with what they need.

#5 – To be a magic report “leader” you must have the most market share.

This myth is specifically related to stack-ranking analyst reports that everyone loves (or hates). The belief follows an assumption that if you are the biggest vendor (by measurement of revenue or market share), then by default, you must be the “Leader” in your target Magic Quadrant, Wave, etc.  

The truth is market share or vendor size does play a role in vendor placements, but this is one of MANY factors taken into consideration. What’s more important to the analyst community is showing growth, demonstrating innovation, driving compelling messages that resonate with the market.

Sadly, the belief in this myth drives some vendors to “fudge their numbers” when reporting to analysts in order to appear bigger than they really are. Not only does this lead to unethical behavior and complications down the line, but it can also drive lawsuits for fraud and misrepresentation.

When providing analysts with revenue or shipment numbers, executives should focus on accuracy and factual reporting. Knowing that market share does not equate “leader,” AR programs should be free to focus on actual matters instead of smoke and mirrors.

These are the top 5 myths relating to analyst relations. And, without question, there are many other challenges and misconceptions about analysts and analyst firms. However, leaders who recognize and positively address these top 5 myths will most certainly benefit in earning positive analyst coverage and commentary.