Forrester Research (
Q3 2010 Earnings Call
October 28, 2010 11:00 am ET
Karyl Levinson - VP of Corporate Communications
George Colony - Chairman & CEO
Charles Rutstein - COO
Mike Doyle - CFO & Treasurer
Laura Lederman - William Blair
Dan Leben - Robert W. Baird
Brian Murphy - Sidoti & Company
Bill Sutherland - Boenning & Scattergood
Brian Murphy - Sidoti & Company
Previous Statements by FORR
» Forrester Research, Inc. Q2 2010 Earnings Call Transcript
» Forrester Research, Inc. Q1 2010 Earnings Call Transcript
» Forrester Research Q1 2009 Earnings Call Transcript
» Forrester Research Inc. Q4 2008 Earnings Call Transcript
Good day, ladies and gentlemen, and welcome to the 2010 Third Quarter Forrester Research Earnings Conference Call. My name is Janine, and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of today’s conference. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.
I would now like to turn the call over to Karyl Levinson to read the Safe Harbor statement. Please proceed.
Thank you and good morning. Thank you for joining our third-quarter call. With me today are George Colony, Forrester’s Chairman of the Board and CEO; Charles Rutstein, Forrester’s Chief Operating Officer; and Mike Doyle, Forrester’s Chief Financial Officer.
George will open the call and provide a strategic update on the business and our role-based strategy. Mike will follow George and provide detail on our financial results for the quarter. After Mike completes his review, we’ll open the call to Q&A.
A replay of this call will be available until November 4, 2010 and can be accessed by dialing 888-286-8010. Please reference the pass code 63306950. This call is also available via web cast, and will be archived in the Investors section at forrester.com.
Before we begin, I’d like to remind you that this call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expect, believe, anticipate, intend, plans, estimates, or similar expressions are intended to identify these forward-looking statements. These statements are based on the company’s current plans and expectations and involve risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements.
Some of the important factors that could cause actual results to differ are discussed in our reports and filings with the Securities and Exchange Commission. The company undertakes no obligation to update publicly any forward-looking statements whether as result of new information, future events or otherwise. I’ll now hand the call over to George Colony.
Thank you, Karyl, and I’d like to welcome everyone to the call. I will cover five topics this morning: Forrester’s three business imperatives, Forrester’s differentiation, the economy and tech spending, company capitalization and finally acquisitions. I’d like to update you first on Forrester’s three business imperatives. These are the long-term operational priorities of the company, and they are: number one, driving the role-based strategy forward; two, increasing the size of the sales force; and three, increasing the percentage of Forrester’s business that is syndicated.
Looking first at role based. As I mentioned on the Q2 call, the company is in the midst of launching role based online communities; sites enabling clients and non-clients to engage in ongoing discussions. Previous to the third quarter, we had been beta testing the communities for the application development and delivery, interactive marketing and technology product management and marketing roles. In Q3, another 10 communities went live. We expected all 19 roles will have communities by year-end.
As of yesterday, we had 13,000 members in our 13 communities. During Q3, an average of 50 people joined daily. Since the launch of the 10 new communities, this has jumped to 88 new members per day. Community activity is on the rise as well. More than 300 new discussion threads have been created since mid July and the top 10 have accumulated more than 15,000 viewers.
Social informs Forrester’s works on several fronts. It brings a diversity of views to our clients. It sharpens and accelerates our research process and finally it enables our clients to share and learn from a broad range of best practices. Social naturally augments the role-based strategy.
The company’s second business imperative is to expand the sales force 15% to 20% per year. There are approximately 4 million executives worldwide in the 19 roles that we address. Expanding our sales channel enables the company to reach more of these potential clients.
Sales attrition is running at less than half of 2009 levels. Lower attrition has helped increase sales productivity. The sales force had grown 16% by the end of the third quarter and this puts us on a path to reach our expansion targets for the year.
The company’s third business imperative is to increase the percentage of our business that has syndicated and we call this metric Q. Q is running at levels commensurate with 2009 and we believe that we are on track to achieve our Q targets for 2010.
A key element in Forrester’s future growth is differentiation, and I wanted to say a few words on this topic. Forrester is different from its competitors in five ways. Number one; roles, staying relevant to our clients by relentlessly focusing on what they need to be successful in their jobs; two, the range of roles, we cover roles in IT and roles in marketing and strategy, the interplay between these sets of roles can have an outsized impact on clients’ business performance; three, unparalleled global consumer and business data; four, social media leadership, Empowered, our best-selling work on the subject was published by Harvard Business School Press in September; and finally, five, our focus on how companies are moving from IT to BT, that is how they are applying technology to their business. As Michael Porter has written, a successful strategy rests on defensible differentiation. Forrester’s differentiation will ensure higher renewal rates and faster new business win rates.