Analysts understand their specialist field of industry or technology better than almost anyone else, which is why cultivating and managing good relationships with analysts is increasingly valuable, particularly in the B2B space and technology industry. Specialist analysts are able to offer business insights, identify the latest and most important industry trends and assist companies in building trust and credibility around their products or brands.
Maintaining good analyst relations with both large global analyst firms such as Forrester, IDC or Gartner and with smaller, niche specialist analysts is essential if you want a deeper knowledge of the latest trends in your industry, key market and technology trends and a better understanding the changing needs of your customers and your target markets.
Analyst relations (AR) operates at the cross-section of corporate communications, investor relations and marketing. An effective analyst relations programme can have a direct effect on the financial performance of a company making this a skilled area of practice. Developing the right relationships amongst the analyst community takes time and can require experience to help manage.
Who needs analyst relations?
Analyst relations are increasingly important in the technology industry and in B2B verticals such as financial services, healthcare, retail, energy, education and many other industries. Establishing and maintaining good analyst relations is a strategic business move, as it will help to improve and inform your overall marketing, PR and wider business strategy.
Analyst relations specialists will be able to offer you expert and insightful knowledge about the best analysts to work with, based on your business needs and objectives. They will leverage their own relationships with analyst firms and individual specialist analysts to offer you the best advice on how to work with the right analysts to achieve your business goals.
Analysts are generally specialised in one or more industries and sometimes entirely focused on niches within certain industries.
As at the end of 2019, there were approximately 41,000 listed companies in the world with a combined market valuation of somewhere in the region of US$ 80 trillion according to the OECD. The growth of financial centres around the world has propelled countries and created economies. The development of the broader financial industry has become the byword for the globalisation of business and industry. While the financial markets in their own right are huge industries, their main and original purpose is to provide attractive financing solutions for companies in all sectors.
For companies looking to raise money in the markets, one of the most important sets of individuals within this are the analysts who work independently, in small niche firms, or in one of the many large international investment companies. Analysts deep dive into companies and provide the reports that investors from all along the scale rely on. From large institutions such as pension funds and right through to individuals, they rely on analyst reports to make their investment decisions.
Working with analysts
When looking into a specific organisation within an industry, analysts are not interested to discover fault. They are trying to understand as much of the way the business works and how the management team is approaching the running of the company as possible, while giving adequate consideration to the context – industry, legal framework, social trends and other relevant details – as well as to how well an organisation responded to change historically.
A key aspect is being able to explain your business so that an analyst can quickly understand and in turn describe it to their clients. Clarity is also important as any business needs to be help against relevant comparable for fair valuation.
Ensuring that a company that is listed or planning to list engages with analysts to ensure that they understand the company and the nature of its business can have a large and very real impact on its valuation. Positive reports are vital for a company’s industry position and corporate communications influencing both share prices and the ability to raise debt.
How an agency can help with analyst relations?
Specialist analyst relations agencies or PR agencies that offer analyst relations as a specialty service will offer clients a wealth of experience in corporate marketing and communications. They will also have a thorough understanding of your target audiences and markets, your corporate positioning and your brand or product messaging.
A specialist AR agency will be able to offer you expert guidance on how to work with the right analysts to achieve your marketing, PR or business goals. Once you’ve established the analysts you wish to work with, your agency will maintain and develop that relationship, providing the analysts timely information on your product or brand development strategy, access to senior executives, networking events and more.
Common services in this area include – but are not limited to – the following:
- Analyst Research and Identification
- Narrative Development
- Development of Research on buyers, competitors, markets and technologies
- Analyst Deck Development
- Executive training and coaching
- Integrated services with public relations
- Analyst Meeting Management
- Analyst Briefings
- Ongoing Analyst Relations
The right analyst relations firm will have strong experience and a deep understanding of the sector in which their client operates.
Trust and confidence
Trust and confidence is absolutely essential for this area of practice and this needs to be in place throughout the delivery. We are also able to develop strategies that cultivate the relations with analysts as well as engage them over time.
Influential analysts are independent and need to have a structured and considered engagement plan that recognises their role and methods of working. An analyst relations agency will provide the services needed by clients to build and manage these successfully over time.
Analysts will want to have the company explained in full and this will include selling the company to explain why they are desirable for investors and therefore in turn why the reports will be wanted. Analyst relations agencies will help develop this narrative and support the pitch with research and case studies as appropriate.
Analysts will want meetings with senior management which need to be handled as a combination of investor and media engagements. Nurturing the right relations takes time and requires consistent contact and information.
What is the difference between investor relations and analyst relations?
Investor relations is a broader range of activities handling the ongoing engagement of shareholders. Analyst relations pertains to communicating with a relevant group of specialised analysts, with each relationship requiring careful management. The latter includes more developing of a corporate story and corporate communications approach.
What is the difference between public relations and analyst relations?
Public relations has its main audience of the media and through them a wider audience. Analyst relations requires more detailed engagement with a much smaller group of people and providing a full story about a company over time.
How is pricing determined?
Analyst relations strategies are longer term initiatives rather than short term campaigns or projects. Agencies would tend to be retained and the fee level would depend on the extent of services needed. Pricing would also vary based on market.
How do you measure success of analyst relations?
Some measures of success can be the number of analyst reports produced regularly with positive sentiment. Equally success can come from the number of analysts engaged or the number issuing buy recommendations.
Is analyst relations only for listed companies?
Analyst relations is most relevant for listed companies. It can also be important for those companies who are thinking about listing in the future.
Can you run analyst relations in multiple markets?
If this is relevant to a company as it is operating globally with multiple treasury centres. Most commonly, analyst relations will focus on the primary capital raising centre for a company.
Analyst relations is an increasingly essential part of many successful public relations campaigns. CMOs and marketing directors looking to shape their business strategies look towards expert industry analysts for insights. Analysts offer deep industry knowledge, often focusing on a specific industry sector, technology or business trend. Analyst relations helps to add credibility and weight to your PR messaging, offers invaluable business feedback and identifies key industry insights.