How do analysts influence a decision? :Business Strategy /Financial Advisors

Analyst influence increases with engagement with decision-makers
Influencer Marketing
& Assessment and selection: pure consulting, and a project may take
several months to complete. Usually offered by dedicated consulting
arms of analyst firms.
& Decision validation: may be conducted over days, rather than months,
leveraging the knowledge of a single analyst.
& Price comparison/negotiation. The hardest advice to give, but
arguably the most valuable. Suppliers rarely provide pricing
information (unless required to by regulation), but commodity
prices are available. Analysts are able to aggregate prices from
multiple sources and calculate averages, which can help in
negotiation.

Why analyst influence can be overstated
There is, frankly, a lot of nonsense talked about the influence of analysts.
In some markets they hold near god-like status, with the ability to make
or break deals. This may have been widely true a decade ago. But today
information, expertise and influence is dissipated across a much wider
array of individuals.

We have read that analysts are influential in between 60 per cent and
80 per cent of large sales, especially in the tech sector. The inference is
that analysts are the most important influencers, and/or hold some
position of exclusive influence on decisions. But this high degree of
involvement doesn’t translate into analysts then enjoying 60 per cent
to 80 per cent of the available influence. We can’t think of a major sale
where the winning supplier didn’t influence the decision. Or where a
reference client wasn’t used. Indeed it’s arguable that the greatest
influencers on a decision are the preferred suppliers and the reference
customer.

It’s meaningless to quote percentages of involvement. The range of
involvement in decisions might range from zero to 100 per cent depending
on the market. We know that a big four consulting and integration firm
estimates that 0.5 per cent of its sales are influenced by analysts. No, that’s
not a typo. It’s one half of one per cent. It even uses the figure in its
calculations for ROI on AR. And it’s a figure that’s accepted by the firm’s
senior sales management team.

The important factor is not involvement but share of influence. Our
own data, drawn from more than a dozen studies of influencers, shows
that the average share of influence for analysts is 16 per cent. But it is
highly variable, ranging from 4 per cent to 22 per cent, depending on the
market segment and maturity.