The Evolving Advisor Relations Function

•
Deal sizes smaller, contract durations shorter
•
More narrow scope opens the field for the client to consider more providers – especially the more niche providers
•
Marketplace is more competitive, and more providers are investing in their Advisor Relations programs
Number of unique providers invited to ISG-led deals in the Americas in last 18 months
Market Dynamics

ISG Observation: The Advisor Relations role has been evolving over the last couple of years So what did we do about it? We did a survey!

Who
Advisor Relations leads or primary contacts, one per company
What
Online survey, ~15 minutes
When
Survey completed by August 6, 2014
Why
To share insights with the Advisor Relations community & to better understand our clients
35
Results
Completed interviews
30%
Response rate

Four segments
Large Western Heritage
Large Indian Heritage
Small Western Heritage
Small Indian Heritage

Advisor relations teams are growing!
‘13
‘12
‘14
’15e
2.0
2.4
3.4
4.0
Growth is occurring across the globe
0.8
1.7
0.9
1.5
0.3
0.8

1.2
2.7
+133%
0.6
2.3
+300%
3.7
4.8
+79%
1.8
5.9
+236%

Why?
We recognize that the advisor channel is an important sales channel and have invested to reflect anticipated outcomes – new opportunities to complete for business.
Originally we lacked an under- standing of the channel and this led to the under-investment. We now recognize the value of the channel and have to ramp up our investment.

Integrated
Analyst Relations
Advisor Relations
Separate
40%
Analyst Relations
Advisor Relations
60%
Small Western and Indian heritage
Large Western and Indian heritage

Integrated
Why?
Resources for smaller firms are more constrained.
Consistency of messaging to the market.
In both cases we are trying to leverage their influence on end user decisions so the messaging has to be uniform.

Why?
We believe that analysts and advisors have different missions and therefore need separate approaches to yield results.
Separate
Advisor and analyst relations serve different purposes and therefore should be managed separately.

First place to look when building out your team?
43%
No standard approach
39%
External “friends & family”
20%
Internal candidates
3%
Internal candidates
Top 3 Sources
Marketing
84%
71%
Sourcing advisors
Sales
52%

External spend
67%
33%
2012
Analyst Firms
Advisor Firms

External spend
All classes of service providers had
about the same split
Large Indian heritage firms: 38% - highest
67%
33%
2012
Analyst Firms
Advisor Firms

External spend
67%
33%
2012
Analyst Firms
Advisor Firms
62%
38%
2014

External spend
67%
33%
2012
Analyst Firms
Advisor Firms
62%
38%
2014
2012
38%

External spend
67%
33%
2012
Analyst Firms
Advisor Firms
62%
38%
2014
2012
58%
2014
38%

External spend
67%
33%
2012
Analyst Firms
Advisor Firms
62%
38%
2014
58%
39%
34%
29%

External spending with sourcing advisory firms
$201k
average external spend

External spending with sourcing advisory firms
$201k
average external spend
$98k
$744k
$86k
$119k

Sourcing advisors will remain an important channel
Percent indicating external spend will increase
61%
53%
50%
2012
2011
2013
2012
2015
2014
Top drivers for increased spending
•
Increased awareness
•
Internal recognition of channel importance
•
Larger team sizes creates opportunity for more interactions
$

Aggressive large Indian heritage firms
$744k
Strong external spending
Re-allocation of funds
7:1
Outspending competitors
Advisors 58%
Team growth
1.8
5.9
Analysts 42%

Can third party advisors maintain their
OBJECTIVITY

How do you find third-party advisors treat you differently if you invest in their commercial programs?
No difference
Better access
Not clear
Concerned
Treated differently
*~ 2/3 of participants answered this question

How do you find third-party advisors treat you differently if you invest in their commercial programs?
No difference
Better access
Not clear
Concerned
Treated different
14%
55%
14%
18%
0%
*~ 2/3 of participants answered this question

To date, I have not seen or felt like our company has been included or excluded for anything other than our capabilities.

I don’t believe it affects how we’re treated, but it does provide us with a better source of information and access to key advisors in the practice groups.

By the spoken word, NO different. In fact everything is spoken with a high degree of ethics. At the field level I also believe the advisors are widely always acting in the interest of their customers. So I have no hard evidence that one influences the other. Right now, I do not think it is a major problem or one I would call out as a concern, but I will be the first to admit that I am concerned.

The top
2
priorities across all firms
Develop relationships with advisors
Western Heritage
India Heritage
Educate - capabilities & differentiation
Western Heritage
India Heritage
1st
2nd

•
Personal relationships
•
Executive to TPA leaders
•
Deeper penetration within TPA
•
Executives to specific advisors
•
To improve your differentiation
•
To improve your pursuit process
Building relationships to foster invites
Gaining insights to improve win rates
>
higher priority than

79%
# of invites
Measures of success for advisor relations programs
62%
$ of invites
74%
$ of sales win
53%
win / loss ratio
53%
# of interactions

Advisory relations is difficult work!
Managing expectations around frequency, volume, and/or value of invites from TPA
Conveying value proposition & differentiation in a way that resonates with advisors
Everyone has challenges
the top
3
hurdles
Identifying advisors critical to align with specific internal stakeholders

Types of Information to be Conveyed…
•
Leads they have for you
•
Leads you have for them
•
Market wins
•
Regular touch-base type of call
•
Capabilities briefing
•
Discuss market trends
•
Discuss their market positioning
•
Discuss their differentiation
•
New service offerings

Discuss their market positioning
Discuss their differentiation
Capabilities briefing Discuss market trends
Market wins
Regular touch-base type of call
Leads they have for you
Leads you have for them
New service offerings
As they happen…
Quarterly…
Bi-Annually…
Annually…
When appropriate…
Types of Information to be Conveyed…

•
Market trends they’re seeing
•
Value proposition / differentiation
•
New capabilities they’re developing
•
Types of deals should not be invited to
•
Types of deals should be invited to
•
Existing capabilities
•
Go-to-market approach
•
Investments they’re making
•
Client success stories
•
Typical customer profile
•
Company history
•
Certifications / awards / industry recognition
•
Revenue / employee growth
•
List of partnerships
•
Revenue mix by vert / geo / service line
•
Number of clients served
•
SMAC capabilities
•
Global service delivery locations
•
Recent wins
•
Introduction of participants
To cover in a briefing…
Pre-post read information…
Briefing Top Tens…

Change is constant
•
Teams will continue to expand across the board
•
Budgets will continue to grow
•
The role will continue to evolve
Advisor Relations

Differentiation is difficult
# 3
% of advisors disagree that “providers generally do a good job differentiating themselves from the competition”
% indicating “insights to improve how we communicate or differentiate” is a priority
Top 3 challenge is “conveying value prop & differentiation in a way that resonates with advisors”
14%
86%

Education is Important
•
Relationships and education are likely to continue to be top priorities
•
Advisor relations has broad internal reach therefore internal communication to executives and sales teams continues to be critical

Discussion

The Evolving Advisor Relations Function

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