The Evolving Advisor Relations Function

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• 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

© 2014 Information Services Group, Inc. All Rights Reserved © 2014 Information Services Group, Inc. All Rights Reserved © 2014 Information Services Group, Inc. All Rights Reserved

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


Small Indian Heritage

1.2

2.7

+133%


0.6

2.3

+300%


3.7

4.8

+79%

Large Indian Heritage

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



External spend

67% 33% 2012


62% 38% 2014


External spend

67% 33% 2012


62% 38% 2014

2012

38%



External spend

67% 33% 2012


62% 38% 2014

2012

58%

2014

38%



External spend

67% 33% 2012


62% 38% 2014

Large Indian Heritage 58%

Small Western Heritage 39%

Large Western Heritage 34%

Small Indian Heritage 29%


External spending with sourcing advisory firms

$201k average external spend


External spending with sourcing advisory firms

$201k average external spend


$98k

Large Indian

Heritage

$744k Small Indian

Heritage

$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

Business

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