Daily Archives: June 1, 2016

30K a Day for Advice, and You Haven’t Even Seen a Solution!?!

the doctor recently learned two very disturbing pieces of information about one of the top analyst firms in the space. And when the doctor says top, he is referring to the type of analyst firm that produces one of the tragic quadrant procurement grave reports that many, many clients pay top dollar for in the hopes of identifying the leaders to invite to their technology RFX. (And the reasons that many vendors pay top dollar for analyst relations in the hope of getting enough notice to not only get included, but featured well.)

What was this disturbing news?

1. The firms is now charging up to 30K a day for dedicated analyst time.

This is disturbing for two reasons. First of all, the doctor doesn’t know any analyst in the space that is worth $3,750 an hour. The top analysts are easily worth $1,000 an hour, but almost $4,000? Top management consultants, like top lawyers, charge a lot, often in the $1,000 an hour range, but when you do the math, that’s already equivalent to a salary of 2 Million a year. How many professionals are worth 2 Million a year, yet alone the 7.5M this analyst firm is implying its analysts are worth? Not many. Secondly, as far as the doctor is concerned, this firm doesn’t have the top analysts in the space. Do you really want to pay that much for advice from a tier 2 analyst?

2. The analysts no longer take demos.

That’s right! All they want now is customer references. And while no firm should make a recommendation without a customer reference (because demos can be misleading in the hands of a slick demo expert when done in front of a non-technical analyst), no firm should be making a reference based on a customer reference alone. Why? If the vendor knows that they are judged entirely on the references, the only references they are going to give are those to new clients where the blush is fresh on the rose and those client representatives who have been bought.

But the company has a no-bribe policy, and we have confirmed from the company that the individual did not violate it!

Irrelevant. There are non-violating ways to bribe a rep at a top-named customers, and the best marketers in the space know the tricks. First of all, find someone who likes to travel but who cannot afford to do to much of it and does not get many opportunities to travel on the company dime. Invite them as a speaker to all your corporate events at desirable locations as well as your presentations at big industry events where they can look good in front of their peers — and cover not only all their expenses, but all of their partner’s expenses as well.

Next, make sure they are on the product advisory team. If their employment agreement doesn’t explicitly forbid outside consulting to your company in off hours, or honorariums for exceptional performance, pay them for it. If not, make sure the product advisory team has to go on semi-annual “retreats”, all expenses paid.

Finally, do everything you can to make them look good. In return, the praise they lather on your behalf will be thicker than the bond between thieves. Much thicker.

In other words, regardless of the product quality or suitability of the solution, all the analyst is going to hear is that it’s the best thing since sliced bread and the vendor performs eight miracles a week.

And when you put these two facts together, it is very, very, distressing that any client who engages the firm for a detailed strategy and recommendation session in the effort to pinpoint the best technology for them is going to essentially spend 30K for a worthless recommendation. That’s a lot of money that could be used for better things, including 3 days of consulting with an analyst who’s actually seen the solution, analyzed its effectiveness and appropriateness, and knows what they are talking about.

And you don’t have to hire the doctor (for a fraction of the price) to get this insight — Spend Matters also has a no play, no promotion policy. Not only is an open demo with one of their (extended) analyst team a requirement for consideration on the 50/50, but while they will mention the existence of a provider with whom they haven’t seen a demo, they will not recommend a client engage with such a provider without a detailed investigation of product capability, and deep, live, demos. (And, moreover, if they have 3 or more other providers to recommend that they believe will suit a client’s need, the existence of a provider they haven’t seen is not likely to be mentioned at all unless you inquire about that provider specifically.)

So why would anyone pay 3X what they should for advice that is worthless? Probably because they don’t know better. So before you pay what could be a ridiculous amount for analyst time, please do your research and know exactly what type of advice you can and can not get. the doctor is sure this particular firm (that will not be mentioned, since this post will apply to any analyst firm that decides to adopt the same stance of ridiculous day rates and no-demo policies and this post is going to be archived as long as SI remains alive) still does a great job at identifying process weaknesses, opportunities for new and established technologies, and strategies for advancement — but the doctor, who barely trusted their version of the tragic quadrant procurement grave reports to begin with, will never, ever trust a technology recommendation from again — and if they hold to this “no demo” rule, neither should you.