Last week, the ineffable ARmadgeddon flagged that Jim Zimmerman had started a new blog called ’AnalystPerspectives' covering the IT and telecoms analyst firm markets. I've been thoroughly enjoying it so far.
 
Jim's approach of describing smaller analyst firms is both interesting and useful - and essential reading if you're trying to make sense of what can seem a dauntingly saturated market. He's right of course: the Long Tail does apply to the industry analyst marketplace, with what he refers to as a few "big hits" ruling the roost and a large number of more specialised niche players.

Jim's latest post on 'tiering' analyst firms is likely to ruffle a few feathers, not least because it annoys the hell out of some very distinguished analysts. Notwithstanding a few crumpled egos, however, categorising analyst firms into tiers is a logical approach for AR pros and I don't know any practitioners that don't do this. As Jim says, "there are no hard-and-fast guidelines for what constitutes each tier" and everyone does it slightly differently.

Jim has stated a wish to see opinions on the commentary that appears on AnalystPerspective, so here's my two cents-worth:

Personally, I don't think it is useful to drop a firm into tier one, two or three and just leave it there.

Firstly, the relevance of an analyst house depends very much on what you are selling. Working as I do in an agency, I regularly sit down with my various clients to evaluate the industry analyst arena and develop our understanding of who makes an impact in their given marketplace. Just because the analyst firm has close to a billion dollar revenue, that shouldn't guarantee that it gets special attention. It would be daft to underestimate the clout of a firm like Ovum in Enterprise Mobility (especially in Europe) simply because its revenues are a fraction of certain competitors.

Furthermore, measuring a firm purely on size and market presence suggests a focus on getting one's message out. Analyst Relations isn't only about trying to convince analysts that a company's strategies are winning ones (which is hardly likely to be a successful approach) it's also about listening to what the analysts have to say and incorporating this valuable feedback into the organisation. Successful analyst interactions are intelligent conversations wherein both sides give and take counsel. IT vendors that benefit the most from their relationships with analysts have mechanisms in place to channel feedback to the right places within their organisations.

That brings me to my third point, which is that any classification should not be considered permanent. Just like in sporting leagues, there are climbers and fallers. Some firms develop a competence and an influence that belies their size, but for various reasons firms can also lose influence. As I shall try to explain, a categorical tiering of analysts not only does a disservice to analysts, it is potentially counterproductive to the business interests of the vendor engaged in the tiering.

In fact, tiering analyst firms should only be considered a first step in planning a strategy for engaging with analysts. Jim maintains an excellent directory of analyst firms, so I appreciate where he's coming from, but when advising clients I am always on the lookout for individual analysts who are knowledgeable and insightful in my client's space. This may result in my counselling that an analyst in what Jim ranks as a "tier 3" house be prioritised as "tier 1" and vice-versa. In other words, what might be a "tier 1" firm for one client may qualify as "tier 2" or even "tier 3" for another.

Tiering analysts is a meaningless activity unless you tier them relative to a specific PURPOSE. Some analysts, for example, may have extremely high visibility with buyers via private consultation, but may not publish or be quoted in media as often. They would be "tier 1" for sales acceleration and competitive depositioning. Others are prolific authors but can't make time for reporters. They would be "tier 1" for lead generation.  And others may only have a subscription base of 1000 or less, but are frequently quoted in high-profile publications. They would be "tier 1" for media references and PR purposes.

As you can probably tell by now, at H&K we prefer to tier the analyst rather than the firm. Inevitably any analyst gets more weight from being at one of the "big hits" than from being at a smaller firm, but there are other factors that need to go into tiering an analyst; consider things like customer access, customer impact, thought leadership, media visibility, key relationships and so on (I can see another blog entry coming...) In certain cases, the most appropriate person to engage with may not even be an analyst, let alone one who works for a "big hit".