The brouhaha has subsided, but for a while Wall Street analysts were considered Public Enemy No. 1. The entire industry was tarnished after several tech analysts, including
Salomon Brothers' Jack Grubman, the one-time poster child for all those frothy tech stocks in the late 1990s, were forced to resign after being accused of recommending stocks they
knew to be dogs.
Even before the scandals, however, analysts were looked upon with suspicion by investors and the public alike, the major question on peoples' minds being: Just whom do these
guys work for? With several different masters to please - their employers, clients and investors -- it's a fair question.
Cultivating analyst relations requires patience and not a little finesse, a totally different animal than dealing with members of the media. And with the introduction of
Regulation FD three years ago -- a Securities and Exchange Commission mandate that public companies make their financial information available to all investors simultaneously --
analyst relations demand even more attention and investment.
Still, it's crucial for communication executives to reach out to those analysts who cover their particular industry. A couple of good, unbiased quotes from analysts about your
company in a newspaper, magazine or Web article can drive sales and put the company in a favorable light with investors.
Building bridges with analysts was the topic of a recent virtual seminar sponsored by PR NEWS titled, "Best Practices in Analyst Relations." Both analysts and PR execs tackled
a wide range of topics, including the stark differences in dealing with analysts as opposed to the media and how to avoid any pitfalls when pitching the analyst community. (See
tables).
Roberta Carlton, VP for SparkSource, a marketing/PR firm specializing in high-tech firms, says it's important that communication execs centralize management of analyst
relations.
"If everyone owns analyst relations, no one owns analyst relations," she says. To make sure everyone is on the same page Carlton has created a "Communications Board" that
includes AR, PR, IR, marketing and human resources executives. After devising an overall strategy for analyst relations, board members huddle with the company's sales team to find
out what role analysts play in the sales cycle: Do prospects use a particular analyst report to identify the players? Are analysts directly involved in making recommendations?
Carlton adds: "When talking to sales, don't forget your partners. Often they are directly connected to prospects and sales."
Another key to successful analyst relations is committing to the long haul. Shooting an embargoed press release to analysts about a new product or service a few days before
launch doesn't cut it. Even a pre-launch meeting several weeks out is too late. Indeed, the first meet-and-greet should be at least a year from launch. During the process trade
shows, events, analyst forums and joint Webinars are some of the other ways for communication executives to maintain ties to analysts. Targeted newsletters are another way to keep
them in the loop.
Claudio Marcos, Research Vice President - CRM at Gartner Group and Research Area Leader - Technology-Enabled Marketing, addressed how PR execs can leverage analyst relations to
enhance external communications. "It's important to identify the most suitable analyst to make it clear that more is not better," he says. "It's far important to get the A-list
analysts truly engaged and understand their specific research coverage and how you can collaborate in terms of providing insight" about your company.
During briefings, "you have to be relevant and provide information," Marcos adds. "Analysts don't like to be sold to but the reality is we need to digest the information so we
can have a dialogue, which pays off in the long-term."
And, oh yes, be honest.
"If you are found not to be candid, it will harm your opportunity to establish credibility with analysts," Marcos adds.
Rebecca Wettemann, VP of Research, Nucleus Research, a Boston-based analyst firm, says currying favor with analysts is not unlike what your mom taught you about making friends
in first grade: be nice, share and play well with others. But Wetteman says it usually doesn't work out that way. "It's amazing how many adults we see still making mistakes," she
says, adding a series of suggestions on what not to do when dealing with analysts. "Don't tell me I can't talk to your customers. In all likelihood I'm already taking to your
customers. And don't come to me without a value proposition. We want to see how you expect to deliver value if you're talking to us."
Wettemann also addressed strategies on how to deal with negative publicity from analysts. First of all, coming down on analysts is a no-win proposition; so is contacting
counsel. "They may be able to uncover some weaknesses on what you're marketing," she says. "Don't threaten them with a lawsuit, but call and ask why they wrote what they did" and
develop a conversation.
Andy Gilman, president of CommCore Consulting (and a PR NEWS columnist) talked about the differences between analyst relations and media relations, which are often subtle. To
both parties, PR execs "have to keep going back to both sets, stay current and keep advancing the messaging...You need to talk about your competitors somewhat but then bridge back
to your own issues." On the other hand, PR people need to give analysts as much information as possible about future prospects while providing the media with too much speculation
could get you burned.
What the Fish Like to Eat
- Differentiation
- From what you've done before
- From competitors
- Examples/Case studies
- What's next, trends
- Confidential information
- Source: CommCore Consulting
|
Media vs. Analyst
|
|
|
Media
|
Analyst
|
| 5Ws | 5Ws |
| Q&A to make the points | Presentations first |
| Sound Bites | Data before sound bites |
| More Spin | Less spin |
| 2 + 2 = 5 | 2 + 2 = 4 |
| Bridge to other topics | Bridge on the topic... |
| No bashing | Polite comparisons |
| Source: CommCore Consulting | |
5 Steps to Preparation
- Overview positioning statements
- Key Messages
- Prepare for Difficult Questions
- Last Question Response
- Offer to provide more information
Source: CommCore Consulting
Contacts: Roberta Carlton,VP, SparkSource, [email protected]; Andy Gilman, president, CommCore Consulting Group, [email protected]; Claudio Marcus, Research Vice President - CRM at Gartner Group and Research Area Leader -
Technology-Enabled Marketing, [email protected]; Rebecca Wettemann, VP of Research, Nucleus Research, [email protected].