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Financial performance

Our 1996 financial results showed growth at all levels. We measure the business on four key metrics, and all of these accelerated as well.

1) Agreement value (the value of all core research and advisory services contracts in force) grew from $17.8 million at year-end 1995 to $30.0 million at year-end 1996.

2) Our average contract size increased for both core research and advisory services contracts.

3) Our client retention rate improved from 71% to 74%.

4) The number of client companies increased from 799 to 885.


Our long-term goal is to penetrate the largest corporations worldwide - the "Global 2,000." Within these large organizations, there are increasing opportunities for Forrester to cross-sell our products and services between IT groups, marketing, and executive management. In 1996, we also continued to build our base of new media clients.


In 1996, Forrester's research teams made significant calls about the future of the industry. These include:

1) The Full Service Intranet, how large corporations will use Internet standards to build internal systems.

2) Technographics™, a new way to understand consumers better based on their posture toward technology.

3) Personal broadcast networks, how the Internet will move from a "pull" to a "push" media model.

4) The fourth channel, which sees the Internet as a two-way channel for reaching customers, taking its place beside face-to-face interaction, mail, and telephone.

5) Internet Computing, the technology that will replace the dead Web and enable true Internet commerce.

We launched four new research services in 1996 and also broadened our electronic delivery options. Clients now access Forrester thinking through Lotus Notes®, Forrester Internet, and Forrester Intranet. Not only have all of our new services proven successful, but we've also learned a lot more about how to launch new products, a skill that is central to our growth strategy.

A number of experienced and creative people joined our staff, an excellent testimony to our ability to attract top talent. In addition, we instituted a comprehensive and rigorous training program at all levels of research -- an effort that will help us grow faster while maintaining the highest level of quality.


Two themes will drive our growth in 1997. The first is "simplicity."We plan to build clean, fast processes and avoid bureaucracy by finding simple, straightforward ways to do business. The second theme is "quantum leaps." As our operation scales and our client list grows, we will look for revolutionary (and effective) business changes that can yield amazing results. We plan to launch two new services in 1997 -- Entertainment & Technology and Business Trade & Technology. These service launches are indicative of our strategy to broaden our research coverage into new areas, rather than slice existing services into smaller segments.

Events are an increasingly important part of Forrester's business, and we will be hosting several new Forrester Forums in the coming year. These events will expand our geographic influence and expose more clients and prospective clients to the company's ideas and analysis.

At Forrester, we think of hiring as "strategic growth." The search for the best and brightest is part of everyone's job and remains our No. 1 challenge as we grow the company. Incidentally, it's very difficult to be hired at Forrester, especially on the research side. A prospective analyst must navigate multiple interviews, give an oral presentation to the research team, and present a written sample. The really strong candidates welcome the challenge.