February 04, 2013

Forrester Research

We hear about Forrester Research ... often.  You might feel like a fossilized trilobite after spending time reading their content!

How does Forrester Research market to their customers?  Is it all digital, all omnichannel, as we're told we have to be?  Or is it a different and potentially more effective strategy?

Click here and check out the 10-K from the year ended December 31, 2011.  They'll tell us what they do!

First, you come away with the realization that this is a well-run business.  Who wouldn't want to earn 13% pre-tax profit?  Kudos to Forrester for running a profitable, healthy business.

The 10-K tells us that "Forrester inspires customers to live in the future.

Here's a few tidbits from their 10-K, about the way they view the future.
  • Jim Collins' book, Good to Great, has been their bible since 2007.  It's not some modern whiz-bang text by a social media expert, is it?
  • Did you know that 36% of Forrester employees are sales people?  438 out of 1,208.  They employ more sales people than researchers.  Or digital strategists.
  • Did you know that Forrester wants to grow their sales force by 15% to 20% a year?  They do not talk much about their digital / omnichannel future.  They talk a lot about growing by adding to their sales force.
  • Digital / Omnichannel activities are largely for lead generation, not immediate sales generation.  Think about that for a few moments.
  • Four tactics are listed to promote brand awareness ... website, events, worldwide press relations, and direct mail (gasp) campaigns. 
Their analog-focused strategy works.  Net sales are growing at a 7.5% compound annual rate.
  • 2011 = $283.6 million.
  • 2010 = $250.7 million.
  • 2009 = $233.4 million.
  • 2008 = $240.9 million.
  • 2007 = $212.1 million.
And pre-tax profit?  Growing at a 4.9% compound annual rate.
  • 2011 = $37.0 million, 13.0%.
  • 2010 = $30.8 million, 12.2%.
  • 2009 = $32.4 million, 13.9%.
  • 2008 = $38.0 million, 15.8%.
  • 2007 = $22.7 million, 10.7%.
Nice numbers, huh?  Not stunning growth, but better than many of us, right?

Forrester sells us a digital / omnichannel vision of the future.  As they say in the 10-K,  "Forrester inspires customers to live in the future.  

Forrester's future, however, looks bright due to an analog strategy fueled by a large, human-centric sales force.

Fascinating!

We know why this happens, right?  Forrester isn't stupid, they're employing smart people.  Executives and CEOs tend to be in "Judy's Generation" ... baby boomers, by and large.  You reach these folks via relationships ... actual in-person relationships.

Keep this in mind the next time somebody belittles your business model for being old-school, analog, and relationship focused.  Use Forrester as a role model!

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