When to Listen to the Analysts – While Considering Adjacent Market Entry

In my last post, I expressed the view that companies should not focus on what analysts are saying about their market.  Instead marketing organizations, typically staffed with 10-100X the personnel of analyst groups, should conduct their own primary research about competitors, new products and market trends.  But there are many scenarios in which analysts can create tremendous efficiencies and competitive advantage for marketing departments.  One such scenario is when companies are contemplating entry into an adjacent segment.

Don’t Focus on What the Analysts are Saying about Your Market

It is early December.  And all across the globe technology vendor strategists are busy devising their product roadmaps, marketing programs and strategic priorities for 2011.  One of the sources that almost every vendor will consult is secondary research from the analyst community (e.g. Gartner, Forrester, IDC).  There are numerous companies whose product management organizations heavily depend upon analyst market research to guide their roadmaps.  By contrast, most CEOs I have met have a fundamental skepticism about the wisdom of industry analysts.   Executives question whether the analysts really have a better grasp of market size, customer needs and future trends than in-house personnel.  So where is the biggest value to be gained from analyst relations?  For starters, the most significant value does not come from focusing on analyst opinions about your immediate market.

When Will Technology Analyst Market Research be Free?

There are numerous examples of free services offered in other digital goods markets such as books, movies, music, games and software. Is it plausible that such a change could occur in technology research? Chris Anderson states in his book called Free that “If it’s digital, sooner or later it’s going to be free.” Of course, most products that are “free” are subsidized by some other revenue stream that is dependent upon the item being given away. The model has worked for Google, Radiohead and Skype? But would it work for Gartner or Forrester?

Larry De’Ath’s Top 10 Best Practices for Analyst Relations

Last April, Larry De’Ath, a good friend and colleague of mine passed away. I had the opportunity to work with Larry for a little over four years during his time at GXS. Through my work with Larry, I gained a newfound appreciation for the complexities of AR. And I learned how someone who is highly skilled in the AR trade can generate significantly higher ROI from analyst firms and broader market influence. Having had one year to reflect on the lessons I learned from Larry, I decided to put together a Top 10 list of the Best Practices in AR he advocated. My list is below, but I would encourage those of you who knew Larry personally to add your own comments as well.