Had this book been written only a few decades ago, it’s likely that the entire 60,000+ word manuscript would have detailed a playbook for influencing industry analysts to recognize your new category. Ever since the rise of independent research and consulting firms in the mid-to-late 20th century, buyers at companies across major industries have looked to these organizations for research and advice on trends to pay attention to and which vendors were leading the markets behind those trends. Analysts have become such an important part of influencing market leadership and purchasing decisions that companies (especially in B2B) have built dedicated teams around an analyst relations function to ensure that their brand and value proposition were front of mind.

The Institute of Industry Analyst Relations (IIAR) defines an industry analyst as “a person, working individually or within a firm, whose business model incorporates creating and publishing research about, and advising on how, why, and where information and communications technology (ICT) related products and services can be procured, deployed, and used.”¹ Typically each analyst firm will have their own set of services or offerings, but in general, the following activities are core to the business model for most:

• Retainer or Subscription-Based Advisory. Research access (typically incorporating an agenda), conference seats, and the right to speak to analysts for a certain amount of time. Access to analysts are typically referred to as inquiries and address any questions about published research.
• Numbers and Research. Data gathering and research services for either strategic planning purposes or content development aimed at an end-user audience.
• Vendor Consulting. An opportunity to update the firm about strategic developments such as new product releases or acquisitions—typically referred to as briefings. Note that in some cases, you do not need to be a paid customer of an analyst firm to conduct a briefing, as analyst participation is based on interest and availability.
• Marketing and Opinion. A number of “outbound” services that work in support of vendor marketing, including conferences, white paper production and delivery, and presentation and speaking opportunities.

The “gorilla” in the market is Gartner Inc., with annual revenues exceeding $3.9B annually and over 15,000 customers around the world. As of 2013, more than 62% of revenue for the overall industry was attributed to the “buy-side” (end-users seeking advice) rather than “sell-side” analysts (vendors influencing the research). Analyst relations teams in most organizations spend their time building relationships with sell-side analysts through a combination of briefings, inquiries, and other engagement modalities, with hopes of influencing their research agendas. For market disruptors, this means showing up favorably in research pertaining to the relevant category that they operate in. For category creators, this means being recognized in research as a credible market at all. While this practice is accepted and well understood today—the world is indeed starting to change.

How Customer Voice Is Challenging Industry Analysts

The rise of the Internet—particularly with the rampant popularity of social media—has given customers more voice than ever before. These media properties have given society permission and the enabling channels required to speak openly and freely on whatever comes to mind, without the need for a broker or intermediary. Surely there are damaging effects of dialogue when restricted to 280 characters or less, but on the more optimistic side, customers have ample opportunity to share their experiences with brands for all the world to see, whether positive or negative. We’ve seen evidence of this impact on our consumer lives—whether that’s turning to Yelp over the Yellow Pages, or TripAdvisor instead of Frommer’s to make decisions on places to shop or travel. Within our very humanity, we have changed the way we make considered purchases, giving more authority to the general populace than to the experts who weigh in from the sidelines. We look to our peers for information regarding the latest trends, who the trendsetters are, and how we can participate at the best price. This expectation is standard practice in our consumer lives, and it’s starting to make its way into the office.

But even the most scathing customer opinion or review of an enterprise product never really made a dent in the success of that vendor. For decades, multi-year deals were struck between vendors and clients with the full contract value paid up-front. The vendor would then ship the product to the customer, and whether or not the customer ever plugged it in, the vendor would recognize that revenue and move on to the next sale. With a full assumption of good intent, customer voice technically did not matter to the financial success of the vendor until 45 to 60 days before that multi-year contract was up for renewal. At that point the phone call would come in, and the red carpet would be rolled out, only to find that the customer had never received value from the purchase in the first place and was already on to the next provider. That was the world we were living in, with customer success completely disconnected from business success, until the rise of the subscription and pay-per-consumption business models of the 21st century.

Today, customers have all of the power over vendors in the economic equation. Customers are far more educated about who you are, what you stand for, and the value of your products before they ever engage you in a sales cycle—having conducted their own research online and with what others have said about you. If customers are not realizing the outcomes desired with your products and services, or those outcomes have come at the cost of a great experience, they will churn and leave your brand for the competition. Beyond that, they will likely share their voices online and complete the circle, either contributing to the negative chatter about your brand or advocating on your behalf for all the world to see.

For the first time in history, customer voice is now inextricably linked to how businesses realize financial reward, and the pressure is on vendors to earn and maintain that trust. As that trend follows into the professional context from our consumer lives, customers are showing preference to turning to peers and trusted networks for advice on buying products rather than paying for brokered advice from the analyst community. It’s not to say that this is happening at an absolute basis, or that industry analysts do not have their place in the modern world, but the level of transparency available for free online and completely absent from industry analyst processes is helping accelerate this transition. Beyond social media, online review platforms such as Capterra, G2, and TrustRadius have created a destination for this type of conversation, validating hundreds of thousands of user reviews to help professionals make smarter decisions about what software or services they buy. Customer voice is by far one of the most powerful forces of influence in early markets and, in my opinion, the right strategy to lean on in the early days of category creation.

The Challenge of Analyst Relations in Modern Category Creation

In Chapter Six, we explored the social psychology of early adopters and how category creators can harness their motivators of information, novelty, and status to capture interest and drive participation in the new category. Later, in Chapter Eight, we explored how the early days of new markets can be quite lonely for participants, who self-identify into a tribe and community bound by common cause in the purpose and vision articulated by the category leader. And finally, in the last chapter, we shared how making early customers successful with your products and services and then activating them as brand advocates and ambassadors can validate, define, and advance the interests of the new category. These forces all come together to give ultimate authority to customers—above anyone else—to dictate what is and is not a valid category.

One of the primary issues behind this trend is that analysts need to see a lot of dots in order to form a line. Most firms will only begin to pay attention to a trend once the volume of inquiries they receive on the buy-side becomes substantial. This pattern-matching principle leads analyst relations teams at vendors to influence on the sell-side by mobilizing several early customers to set up briefings with the firm. While this strategy may work well over the long run, it’s very difficult in the early days of creating a new market. When you’re in the early innings of creating a category, only you can see the line without all the connecting dots. You’ve observed the problem in the market before anyone else has, or at least are the first to popularize the problem you’ve discovered. Being first will require you to start connecting the dots on your category before any analyst can be helpful. It’s a universal truth that’s engineered into their business model.

Within the very first month of joining Gainsight, our CEO Nick signed contracts with two of the major analyst firms with the intention of getting help navigating how to position the company from trusted sources who understand the market. Looking back, Nick jokingly refers to that decision as “big company instinct,” but the reality is that what the analysts told us—or didn’t tell us—ultimately put us in a position to create a category around Customer Success. We got to work setting up briefings with our customers (all eight of them at the time), as well as conducting product demos of how our solution fit into the market that we saw developing. Once we shared the entire vision, we were surprised to see the feedback from both firms steer away from our vision and toward the research agenda already in flight (see Figure 10.1).

According to both firms, the best path forward would have been to position Gainsight as a proactive customer support solution, a next generation CRM (customer relationship management) provider, or even a platform for modern account management. Don’t get me wrong: this advice was research-oriented, data-driven, and surely a viable option for our young business. However, it was not consistent with our vision, which we started developing more conviction for when we prioritized listening to our customers rather than the analysts. That conviction led us to a small, but passionate group of early adopters who carried the Customer Success job title, but no company in the industry was championing or paying attention to in a meaningful way. We became obsessed with finding ways to serve them, and in the process, developed the very philosophy and playbook contained in this book and the creation of a promising new profession and software category in Customer Success.

I would be remiss if I did not disclose that these were expensive contracts that we signed pretty early on in our company operations—years later, I wouldn’t advise new startups to sign agreements with analyst firms right away. Remember that most firms will let you conduct briefings for free, which could be a worthwhile endeavor to better understand how these firms work. However, once you’ve made the decision to create a category, and perhaps forgone any analyst recommendations on positioning around an existing market, there are several ways to engage with them down the road in order to leverage their brand equity:

1. Sponsored Research for Content Development. As I mentioned earlier, certain firms will allow vendors to hire them in order to conduct research that can test a hypothesis in the market. That research will typically be output into a white paper, or other long form piece of content that the analyst firm will license for a fee. Oftentimes, they’ll offer services that wrap around the research effort, such as hosting a webinar. Although these programs can often be quite expensive, they represent a direct way for vendors to influence analysts in order to create research under their brand surrounding the problem discovered in the new category. Promoting content that will bear the logo of a credible, third-party analyst firm that features your category name in the headline can be well worth the investment. One of the major firms that offers this service is Forrester Research, who calls the offering a “thought leadership paper” (TLP).
2. Analyst Speaking Opportunities. As you develop your event strategy—be it field events or industry conferences—analysts from tier-one firms are available for hire to speak to your audience. These programs are typically worth a look as an extension of any sponsored research investments you’ve made with them, as the content will likely be far more impactful to your audience if led with data. Similar to the rationale behind sponsored content, having an analyst from a major firm speak at your events can add some credibility to your program, signaling to your community that the “mainstream research community is starting to pay attention to what we already know.” If you’re considering an analyst to speak at your conference, I would run their candidacy by the same speaking criteria that we discussed in Chapter Eight in order to ensure that both the quality of their presentation and their ability to deliver is high.
3. Regular Cadence of Briefings and Inquiries. Eventually, and only when your category starts to gain traction, it may be the time to start “playing the game” and develop a true analyst relations program. While having your category formally recognized on a Gartner Magic Quadrant or Forrester Wave will certainly be a company milestone worth celebrating, it is by no means the definitive proof point of a category created. But in order to build toward that milestone, companies need to prepare for the multi-year process of regular briefings with analysts on upcoming product releases, customer stories, positioning development, or any other relevant company updates that may impact the analyst research agenda. Remember too that firms will only pay attention to categories that have demonstrated volume of inquiries on the buy-side, so mobilizing your advocates to engage the analyst firms with inquiries about your category will certainly help your cause.

Analysts will ultimately be more helpful further into your company lifecycle once your category is more defined. Their influence can help potential customers make purchasing decisions within your category, especially if you sell to clients in the Fortune 1000 or where the deal structure is complex, changing, costly, or critical. But in the early years of category creation, your time is better spent with customers—although some of the lessons previously mentioned can be applied more broadly if we can expand the definition of analysts in the classical sense.

Expanding the Definition of “Analysts”

The muscle that a good analyst relations program will build for you is this idea of influencing the influencers—a notion that involves program building and regular engagement with individuals who can provide trusted third-party validation to their respective audiences that back your claims. In most cases these are either individuals within your customer base or extended members of your community who are not yet paying customers of your product. However, there are cases of individuals who will likely never be paying customers of your product but have a certain degree of influence in your young category. It’s important to get them on your side. Here are the three types of analysts that may emerge throughout your category creation journey:

1. The Subject Matter Expert. Also regarded as “thought leaders,” subject matter experts are independent bloggers or advocates who have developed some type of following that garners attention. They typically are not employed by any competitors and are seen as one of the first-movers in building community around the pains and needs of your market. You would likely engage with these individuals to market through them and to their following, as they typically will not charge you for an engagement (since they are usually willfully employed). Rather, they are more focused on growing their own sphere of influence and rising to the top as an independent, vendor-neutral player in the space.
2. The Super Consultant. Similar to a subject matter expert, super consultants are independents who have gained notoriety in your young market. Unlike them, however, they will charge you for their services. These are the individuals who offer consulting services for speaking engagements, content partnerships, workshops, and other bespoke programs that focus on more than just amplification of your own content efforts. You may consider working with super consultants to add credibility to your cause, especially when the market has yet to tip toward our next class of analysts.
3. The Majors. These are the tier-one organizations that we’ve described at great length in this chapter. Working with any one of “the majors” means fighting for the support of the loudest voices in the industry.

At the end of the day, no voice will be more relevant or important to your success in category creation than the voice of your customer. Whether expressed in the traditional way and brokered through an analyst firm or delivered through modern and direct channels such as online review platforms, the vote of confidence delivered by customer voice is the final word on which categories are credible and which companies lead them.

One of the companies helping usher in this new era is G2, a real-time and unbiased user review platform that helps buyers objectively assess what is best for their businesses. G2 leverages more than 700,000 independent and authenticated user reviews read by more than three million buyers each month, bringing transparency to B2B buying—and changing the way decisions are made. I’ve asked Michael Fauscette, chief research officer at G2, to share his perspective on how categories are created in this new and transparent world where customer voice is king. As chief research officer, working with vendors on category definition and positioning is literally in his job description. Beyond that charter, Michael spent almost a decade at IDC (one of the majors) leading the enterprise software research group, where he helped companies navigate category positioning in the traditional sense. No one is more qualified than Michael to speak from experience—and from the other side—on how companies can maximize customer voice to create new categories.