Outsourcing Analyst Relations: A viable option?

Last week I participated in an interesting discussion regarding influence and the role of analyst relations (AR) – specifically around the issue of how AR staff could increase their influence through a variety of different mechanisms or channels. But one key point that kept creeping into the conversation was one of limited resources: “we simply don’t have the staff to aggressively pursue everything that we would like to accomplish” (a point echoed by many in smaller or fast-growing firms).

After a bit of digging, two basic issues kept making their way into the discussion: a lack of full-time resources and a lack of “R”-level funding (which is often split between Analyst Relations, Investor Relations, Public Relations and Marketing).

That said, there seemed to be a general consensus that yes, there are “parts” of the AR function, regardless of the size of the firm, that could be outsourced based on the size/type of organization, the goals that need to be accomplished and the availability of “outside” resources (or more importantly, funding) – all with the understanding that there must be an accountable person in-house to properly manage and drive the effort.


Here are three basic examples where outsourcing of AR activities might make sense:

  • The Introduction: Sometimes finding the right analyst, or getting in front of the right analyst, can be a challenge. This can be difficult in situations where a firm is moving into a new market sector (product and/or geographic) and may not be familiar with the most appropriate information analysts to reach (think of a US firm trying to move into ASIA/PAC as an example). Using an outside resource (an agency, advisor or perhaps even another industry analyst) to help find the right “connected” or “influencial” person can be extremely effective.
  • The Event: Outsourcing clearly makes sense whenever the word “event” is involved. In fact, the bigger or more important the event, the more outsourcing becomes a viable option (especially for a staff-constrained AR team). Much of the event coordination and publicity can (and should be) handled by hired guns (working under your direction, of course) and free up an AR pros time for more 1:1 analyst “relationship building” activities. This is also a great opportunity to involve PR and Marketing (see below).
  • The Startup: For firms that are just entering into the market, the ability to recruit – and pay for – a quality AR team may simply be beyond their means (CAPEX vs OPEX in a manner of speaking). In this situation, outsourcing the entire AR function to an outside “professional” team, under the control of a “C”-level or Senior “R”-level person my be the most cost-effective approach (especially if the level of work activity will fluctuate considerably over the first year or two).

Now let’s take a look at “insourcing” as a means to leverage in-house budgets and expertise to your advantage.


As I mentioned above, AR typically competes with IR, PR and Marketing for budget allocation. Interestingly, all of these functions tend to be a bit cyclical in nature and feed off of each other: it is not uncommon to find periods where one group is more “active” than another (that is not to say that any of these groups have “time off” or have any idle time on their hands). But depending upon the situation, the best outsourced resource for AR may actually be an insourced resource in the form of IR, PR and Marketing. This type of in-house insourcing, or collaboration, is something that most organizations could, and should, benefit from if properly executed (different roles, but working to help each other out by lending their own expertise).

This is not to say that every time AR needs a helping hand that they should look to an internal corporate ‘R” function for support, but rather that part of any company’s “R” strategy should include a dose of cross-function support. This not only helps with resource and budgetary issues, but can also be part of a much larger integrated marketing campaign (IMC) that can best get solid, reliable results when IR, AR, PR and Marketing are all working in sync with each other (notice I’ve left out sales – that is a separate function for a different discussion). Remember that while all of the “R” functions have very different responsibilities and areas of expertise, coordination of effort is critical to the success of any firm.


There are clearly times when outsourcing AR/Influence-related tasks can make sense – certainly the number of established PR, Marketing and Investor Relations agencies show that this model can work extremely well if executed properly. There are also times when, do to the nature or sensitivity of the work, outsourcing may not be a viable option. But if you are a small firm, or branching out into new market sectors, outsourcing certain AR “outreach” functions can definitely work (from both an access/influence and a financial perspective). And if you are a larger, more established firm, a combination of outsourcing and cross-function insourcing should definitely be part of your overall strategy.

One important item to keep in mind in both of these scenarios is “expertise”. Before you outsource anything related to corporate “influence”, make sure that you are selecting the right person (or team) for the job. Going with the lowest-cost option is almost always the wrong approach, while overpaying for “bloated reputation” can often be a waste of time, money and opportunity.

If you are in a position (or think that you might be at some point in the future) where in-house insourcing is a viable option, make sure that there is an established cross-training program and a solid team focus in place as part of the corporate culture before you start to rely on other groups for support. And remember, if you ask for support from one of your other in-house “R” functions, don’t be surprised if you are asked to return the favor – that’s what teamwork is all about.

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  • Phil Hassey

    Hi Fred, Interesting post as ever.
    Outsourcing of AR happens of course regularly in the Asia Pacific region. Whilst any AR is better than no AR, and there are some great examples here where it has worked well, the biggest problem that you see with outsourced AR is the lack of ongoing engagement. The outsourced AR functions are typically part of PR companies, so this can cloud the experience. However, I tend to take the view that any engagement is better than no engagement ….

    • http://fredmcclimans.com Fred McClimans

      Phil – I understand exactly where you are coming from (and I don’t mean Australia). Firms that move into new, different or emerging regions (especially if there is a cultural or language barrier) are doing themselves a disservice if they do not leverage the expertise of a local firm – even if for nothing more than basic advice or business credibility. Perhaps many are shy about this due to the point you raised – AR often gets PR advice in this area. But I agree with you: any engagement is better than no engagement….!

  • Julie

    Nice post, Fred. Getting the in house team who handles “-R’s” to work together (aka “cross-function insourcing”) sounds like a smart and sensible move.

    • http://fredmcclimans.com Fred McClimans

      Thanks Julie – The problem is that the “R” teams are often separated by more than just function, by chain of command (the “C-suite”) as well. I think that this has, along with competition for Corp attention and funding, led to an ongoing turf battle that only reinforces the wall between AR, IR, PR and MKTG. I think it is about time we started seriously looking at all of these functions as part of a larger “Integrated Marketing” function – the benefits could be amazing.

  • Marcduke

    Great piece, nice summary, in my experience never outsource the value, but outsource the execution where time/resources are limited. As for the AR outsourcer just be aware of where the lines are to ensure you maximise value on all sides.

  • Cece Salomon-Lee

    Fred – you raise an interesting question about the role and value of AR. I’ve previously been involved in AR as part of a PR agency and as an in-house function. I think another component is what emphasis does the company put on AR? Generally speaking, if they place emphasis on PR, AR tends to be highly rated as well. This makes going in-source or outsource easier.

  • http://www.margieclayman.com Marjorie Clayman

    Seems like integration is the answer to everything, eh?

    I’m still waiting for my “AR for Dummies” post, but this was a very good perspective. Thanks!