Advisory Insider: Your AR/Influencer Strategy Is Not Ready for 2023
Your AR/Influencer Strategy is Not Ready for 2023.
Labor shortages, historic inflation, chronic pandemic slowdowns, disrupted supply chains, climbing interest rates, souring consumer sentiment, unsettling stock declines, domestic discord, and global conflicts and war. While the National Bureau of Economic Research says there is no “fixed” rule about what measures define a recession, a growing consensus is that all the catalysts are in place to start one.
Deutsche Bank and Bank of America are predicting that a “recession shock” is on the horizon. NPR reports a growing consensus among economists that we are headed for trouble. The Washington Post cites The Fed's current policy trajectory will likely lead to stagflation and ultimately to a major recession. A recent McKinsey report notes that a vast majority of CEOs have not managed through an economic downturn like what we are facing. And many AR teams have never experienced one either.
The IT industry, like every other industry, needs to prepare and their Analyst Relations teams need to lead the change by providing access to critical custom listening systems, competitive insights and solutions strategies. For AR leaders, waiting will only make a difficult “lift” even harder, higher and longer.
What happens when recessionary pressures hit IT buyers? They slow, re-direct or reprioritize spending. They hoard cash. They delay or reduce investments. They stretch lifespans of existing systems, platforms and applications. Many IT vendors simply hunker down and brace for the impact, but some take advantage of the disruption, aggressively reposition their customer value strategies and lay the foundation for growth now and even faster growth when we come out the other side.
In preparing for the next 1-2 years of tumult, Analyst Relations/Influencer teams need to think about their strategies in the context of how analyst organizations change in times of recession and how they can use that to their advantage. How do analysts change their engagements, coverage and recommendations for IT buyers? How do their companies adapt their go-to-market strategies to drive differentiation and growth?
Leading advisory services firms announced impressive revenue and earnings growth in 2021 and Q1’22. Mid-double-digit expansion is their norm – and one might think that those heady growth levels would be at risk as recessionary trends take root. Not necessarily. And if AR organizations understand how advisory firms change strategies during recession, they can help their organizations better position solutions, retain and grow revenues and differentiate from rivals.
Advisory organizations have a natural business model advantage when pivoting from growth markets to recessionary markets. For them, it’s often a simple change in the focus of their written research, inquiry, advisory sessions and consulting from recommending technical/solution leadership investments to cost containment strategies. Resources are directed away from new and emerging technologies to providing expertise in areas like price benchmarking, contract negotiation, and pricing analyses. Do advisory firms stop reviewing new tech? NO. But they do change their coverage to a include a shaper concentration on helping buyers negotiate more sharply and spend less. The value proposition in times of economic uncertainty is pretty compelling: “Would you be willing to spend $X if we can save you $Y?” And as an independent voice it resonates with buyers. Like the CEO’s referenced in the McKinsey report, many CIOs have also not managed through a major recession. In their entire careers they may only see 2 or 3 major, enterprise-level, investments in systems, infrastructure, applications and services. The Siren call of an advisory firm that sees hundreds or thousands of enterprise-level contracts a year can be irresistible.
As AR teams take a visible role in helping their firms prepare and then manage through a recessionary market, there are two things they need to avoid:
The Echo Effect - Does your value perspective represent the past or future? How sensitive is your customer listening system? Are you reacting to what analysts said was critical/compelling during your advisory session 6 months ago, or are you focused on future value? Wayne Gretsky once said that his strength was his ability to skate to where the puck was going to be. Are you engaging your analysts and advisors as an early warning system focused on future direction? Are you asking analysts to look over the horizon and provide insights about what is likely to happen? Are you asking the analysts about the types of questions they are getting from buyers now and how that is changing as economic uncertainty builds? Are you positioning your value in that context?
The Flocking Factor - Do you approach value the same way your rivals do? Does your firm react to or drive change? Are you focused on the capabilities, functionality and outcomes your rivals (and analysts) tout? In the absence of clear and differentiated value, price and availability become the sole drivers of decisions. This is the definition of commoditization and mimicking your rivals in a time of recession is a blueprint for decline. Ross Perot nailed it when he said, “Eagles don’t flock. You have to find them one at a time.” Are you asking analysts about the gaps they see in the market and the bets they think vendors need to place to drive differentiation? Have you asked them to paint a picture for you of the “ideal” customer requirements where they would recommend you and only you?
Look for a new article next month on sales strategies for AR teams. There is a transaction that takes place between AR and analysts, and time is the currency. If your AR team doesn’t have training in strategic selling, you are at risk.