On Friday, a colleague in another division asked me “How do you measure the effectiveness of analysts relations?” It’s an unanswerable question we’ve all been asked 1000 times about a wide variety of topics (even a marine terminal gate). As I said then, every time someone asks you to show them the measures, be sure to quote Stacey Barr:
These are not measurement questions. These are questions about strategy or direction. If you know what results your work should produce, then the measurement is almost obvious.
After a brief discussion, my colleague determined that he really wanted to measure the efficiency of his analyst relations team so as to benchmark them with other organizations’ size and budget. We agreed that it would be better to use operational metrics rather than strategic KPIs.
This weekend it occurred to me I never really answered the original question. What are the strategic KPIs for analyst relations? Rather than trying to come up with the answer myself, I did a bit of research and found SageCircle – a firm that positions itself as “analysis of the analysts”. They have this promising description:
When building AR measurement programs, AR practitioners must distinguish between performance and operational metrics. Performance metrics help AR teams measure progress against strategic goals while operational metrics measure utilization and productivity against plan.
However, their specific examples of performance metrics (i.e. KPIs) are not as illuminating: “analyst opinions by market, product, etc. or number of sales opportunities supported by the AR team.” These still seem like activity metrics, not outcomes.
I found a more appealing idea in an article by Katie Paine entitled “How to Measure Relations with Opinion Leaders in the Media“. In a section on successful analyst relations, she says:
As with journalists, the ultimate measure of a successful relationship is if they recommend your product to reporters, editors and customers.
The idea is to apply the customer loyalty concept of Net Promoter Score to analysts. It measures the desired outcome, has a well-defined grading system, and is easily benchmarked with other organizations. This makes sense to me.
What do you think?
I agree with your assessment. I think it has to be a joint project and shared responsibility between the marketing and analyst relations teams.
Thanks for the shout out. A couple of things we’ve added since i wrote that paper is to look at the presence or absence of key messages in analysts reports — coding for whether the message is impacting the analysts opinion, and looking at what elements of the messages are actually getting picked up. We also look into the blogosphere to see what quotes from analysts are being picked up as well. Just a few more thoughts to fuel the fire 🙂
Most AR teams fail to link operations to strategy and, as a result they end up doing the wrong things – but increasing efficiently. By focussing on improving operational outputs only, AR managers turn their attention away from hard-to-shift analysts who advise their clients, and focus on easily swayed analysts who are often funded by vendors and are less influential on buyers.
The Net Promoter approach is a very solid one, and you can use it looking at reports and in surveys of analysts. However, the issue is how to look at causality: what things make analysts more positive? That’s why the most effective AR measurements aim to correlate inputs and outputs.
Look out for the free white paper, ‘Measuring the effectiveness of analyst relations outreach’, at http://bit.ly/L9Da
Thanks for the link. We have a variety of posts on AR measurement (see http://sagecircle.wordpress.com/category/measurement/) with more to come over the next couple of weeks that might provide more detail on KPIs than the post you saw. However, there is only so much we can put into our blog. The blog’s measurement content is only the tip of the iceberg versus what is in the Online SageContent(tm) Library, workshops, training, advisory, SageTools(tm) and so forth.
What is critically important for AR is that measurement has to be a core part of the Strategic & Tactical AR Plan. Then AR has to develop an integrated balanced scorecard with distinct metrics for strategic performance and operational excellence, including practical data collection strategies.
BTW, a key and perhaps most important metric that many AR teams do not even attempt to measure is the impact on revenues (e.g., leads generated by analyst recommendations and sales deals influenced by positive/negative commentary). While gathering this data would require more work than merely counting mentions in research notes or analysts quotes, it is a true measure of AR’s business value to the company.
Cheers, Carter Lusher
SageCircle, experts on the analyst ecosystem and AR best practices
http://www.sagecircle.wordpress.com
http://www.sagecircle.com
As I discussed in my last post: http://postioningpower.blogspot.com/2008/12/should-analyst-relations-focus-on-sales.html
in today’s economy–AR must focus on their impact on Sales by working to educate the Sales Team on how analysts can affect the sales process and document the process.
KCG-the Knowledge Capital Group holds free webinars and Audit Sessions to measure your AR program:
https://www1.gotomeeting.com/register/848019794
A new webinar with our partners Apollo Research to talk about the why and when of measuring analyst’s connection to journalists and the media and how to apply relevant metrics.
Thanks everyone for your feedback. I’ll post our metrics in Jan once their finalized.
Now then here’s a question – how do you measure the effectiveness of employee communications? You could make an argument that its value can be found in the results of a company’s CSAT score, the quality of a company’s products, financial results and even its share price. But I have not found a concrete way to measure the effectiveness of such internal programs. Not sure if anyone has.
Of course, the first step to improving employee engagement and simultaneously measuring it, comes in the title of your blog.