Forrester Research, Inc.

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 a result of new information, future events or otherwise.

I’ll now hand the call over to George Colony.

Thank you for joining the call. Before Mike gives his overview, I would like to update you on the state of Forrester’s business through the third quarter.

As I referenced on the first and second quarter calls, we are moving the company through series of transitions in leadership, in sales, in the ways that we deliver research to clients, in technology and in the ways that we operate globally.

While these moves are resulting in short term disruptions in the business, I believe that they will put the company in the best position for long-term growth. Now it is customary for me to use the quarterly conference call to update you on our 3 business imperatives; for this call I’m going to depart from my typical outline and instead give you details on the transitions I’ve mentioned above.

I’d like to start by talking on leadership transitions at the company. As you know, I’ve added 3 strong executives over the last year, Steve Peltzman as Chief Business Technology Officer; Ellen Daley as the Head of the Business Technology Client Group; and Tom Pohlmann as Chief Marketing and Strategy Officer.

While Steve joined us from the outside, Ellen and Tom have 20 years of Forrester experience between them. These executives have brought change, progress and renewed energy through our efforts.

Two weeks ago, we announced that Mike Morhardt will be joining the company as Chief Sales Officer, and his start date is November 12. Mike has spent his career selling research services including 14 years at Gartner Group.

As we scale our sales team from 450 to 1,000 we believe that Mike’s experience, process focus and leadership make him the right person to navigate that voyage. The goal is to build a world class sales organization at Forrester, and we have confidence that Mike can lead that effort.

Charles Rutstein who many of you are familiar with from our quarterly conference calls will be leading the company’s post of COO. I am returning to lead day-to-day operations of the company, something I am excited and energized to be doing.

The presence of a highly operations CSO in Mike Morhardt; a proven CFO in Mike Doyle; and a very capable marking and strategy executive in Tom Pohlmann will enable the company to move forward without a COO, a position that is being eliminated.

This streamlined structure will engender faster decision making and a simpler operational model. I feel very good about the newly constituted executive team and believe that we have the right leadership to take the company through this transitional phase, and back to more robust growth.

I’d now like to talk for a few minutes about our sales transition. Aside from the appointment of a new sales leader, we have made 4 other important changes in sales this year.

Structure, technology, compensation and process, and I want to spend a few moments on each of these.

As I outlined on the Q1 conference call, sales was restructured for 2012. Out of the new organization, single sales reps have responsibility for all roles at individual accounts.

There are 3 reasons why we made this change; number one, clients prefer it, two, its simplicity enables the sales force to scale at faster rates, and three, it highlights Forrester’s ability to help marketing and technology executives collaborate.

This was the right move to make, but adaptation to the change has taken longer than we had anticipated. In the transition, 60% of the accounts received new sales reps, and building relationships have taken quarters, not months to complete.

This problem has slowly attenuated as the year has progressed.

Another effect of the restructuring was that sales reps who formerly specialize in selling to a specific set of roles have taken longer than expected to understand the reach of new roles in the portfolio. Increased exposure to those roles and improved training is gradually diminishing this factor.

We did expect attrition in sales to increase due to the new structure, but we underestimated the scale of departures. I can report that the rate of sales attrition did decline in Q3, and we expect this trend to continue through the end of the year.

The technology used by sales has also changed with Forrester migrating to a new cloud based CRM system in the third quarter. Yes, there has been a learning curve for salespeople and sales management, but the ease of use, improved access to client records and enhanced collaborative powers of the system will help Mike Morhardt and the sales leaders improve sales productivity.

And just as importantly, our new CRM will build closer cooperation between the sales force and research teams.

Competition of sales changed in 2012. And in retrospect, we invoked too much change too fast in how we paid salespeople, and this was the contributing factor to attrition.

As the year has progressed, we have modified the comp plan, and we now believe that we have a compensation framework that can carry into 2013 and beyond.

The final transition of sales in 2012 has been moving the sales force to use a codified process. Previous to this year, different sales groups used disparate approaches for forecasting, building pipelines, prospecting and closing accounts.

Subsequently, sales was more art than science. While the move to standard process is not yet complete, this change will ultimately make it easier to higher training and ramp new salespeople.

Yes, the transitions we made in sales were painful at times, but they have laid the groundwork for a more global, effective and competitive sales force, much better able to serve our clients. While Mike will have a lot of work to do, much of the heavy lifting in sales, much structure, technology, compensation and process is now in place.

Now I’d like to switch gears and analyze our transitions in the ways that we deliver research. For the past few quarters I’ve been updating on Playbooks, and this is Forrester’s new method of organizing our reports, tools and consulting to increase client relevancy.

Playbooks guide our clients step-by-step through the life cycle of the most important initiatives, helping them make key decisions along that path.

Ultimately, each role that Forrester serves will have between 4 to 6 Playbooks. The reports and tools in these Playbooks will be continually updated, ensuring that no research in the hands of clients, which includes waves which evaluate better offerings, will ever be out of date.

In Q3 Forrester’s research teams work to build out the collection of Playbooks. We now have 27 complete Playbooks live on our website with 15 to 20 more expected by year end.

Playbooks are a unique offering and they are resonating with clients. The Director of Digital Strategy for a large U.S.

airline is using one of our Playbooks to define the company’s digital strategy across its website, mobile app and kiosks.

She evaluated the step-by-step guidance of our Playbook and loved the fact that there are parallel Playbooks for other roles in marketing, enabling her broader team to construct a strategy along this same framework.

In addition, Playbooks are helping her marketing organization collaborate with IT executives at the airline. As we’ve talked about before, Forrester is the only company that draws marketing and IT together throughout its research.

Large corporations are most successful when the back office and the front office are on the same page, and that’s what Playbooks do.

Now while the transition to Playbooks is the right strategy, the added effort required by the research desk in the start-up phase has drawn time away from consulting, one of the reasons that consulting revenue was challenged in the third quarter. Once Playbooks move beyond this initial stage, we believe that the consulting research balance overturn.

A fourth transition is our move to new technologies. The new Forrester.com continues to mature.

In the third quarter, there were 780,000 unique visitors to the site, 88% of clients are returning to the site within 14 days of their last visit, and they are more active when they are on the site.

9 out of 10 client visits now result in a document download, and that’s up from the 7 out of 10 last quarter and 3 out of 10 on the old Forrester.com. Our social footprint continues to grow at fast rates.

There are now 88,000 members of Forrester communities, and that’s up 23% from Q2 and 223% year-on-year.

one, to engage non-clients with the goal of ultimately moving them to client status; two, to connect clients to other clients, increasing value and therefore increasing renewal rates and finally, to widen exposure to Forrester’s advice.

The final transition I’d like to talk about is our global effort. Last year, Forrester announced the acquisition of Springboard Research, a company that provides analysis of technology markets in the Asia Pacific region.

Springboard expanded our research coverage in one of the world’s fastest-growing tech markets. Springboard’s offices are in Delhi, Singapore and Beijing.

Our goal of integration was to retain a majority of the research staff, and I’m happy to report that retention in the year one was at 85%, exceeding our targets.

In addition, 100% of the key staffs have stayed with the company. In addition to the retained base of original Springboard personnel, we have expanded total headcount in Asia Pacific by 50% since the acquisition.

We held our first event for CIOs in Singapore, Sydney and Delhi this past quarter to a combined audience of more than 400 executives. Clients told us the content was relevant, thought-provoking and they appreciated our differentiated role-based [ph] approach.

Our Asian events business will expand in 2013.

So to conclude, all of these transitions are the right thing to do for the long term health and growth of Forrester. As the largest investor in the company, I do wish that these changes had been less disruptive to a short term bookings and revenue.

And somebody questioned why we took on these transitions against the tableau of macroeconomic headwinds. However I have confidence that the decisions to proactively change leadership, sales, research technology and our global footprint will ultimately deliver higher value to our customers and higher value to our investors.

We are on the right track, albeit at a slower pace than we had planned.

Thank you very much and I’d now like to pass the call over to our CFO, Mike Doyle. Mike?

Thank you, George. I will now begin my review of financial performance for Forrester’s third quarter results, the balance sheet at September 30, our third quarter metrics and the outlook for the fourth quarter of 2012.

Please note that the income statement numbers I am reporting are pro-forma and exclude the following items, amortization of intangibles, stock-based compensation expense, duplicate lease costs, reorganization costs, acquisition and integration costs and net gains from investments.

Also for 2012, we utilized an effective tax rate of 39% for pro forma purposes. The actual effective tax rate for the first 3 quarters of 2012 is approximately 13%, as we recognized a $5.5 million deferred tax benefit this quarter based on the settlement of a tax audit at one of our foreign subsidiaries.

For the third quarter, Forrester met revenue guidance and exceeded its quarterly guidance for both pro forma operating margin and earnings per share. Our key customer retention metrics continue to perform at healthy levels and our balance sheet remains strong with cash and marketable securities increasing 5% from December 31, 2011.

As George mentioned in his comments, we have embarked on a number of initiatives and organizational changes designed to improve efficiencies, accelerate growth and better serve our clients. We reorganized our sales force to better align sales efforts with client buying behavior.

We reorganized our client group structure to remove complexity from the buying process and increase client engagement. We pivoted our research products to net key client initiatives and issues in the form of Playbooks and we’ve made deep investments in technology, both customer-facing through our new website and internal, through our new CRM systems.

We believe that these changes will result in long-term productivity gains across the business and will improve client engagement and satisfaction, translating in business results through robust top line growth and operating margin expansion in the long-term. However, we are experiencing short-term operating challenges this year and the volume and velocity of changes.

On the sales front, this manifested itself in the form of higher than expected attrition and lower than expected productivity.

Attrition has slowed in the third quarter and we’ve accelerated hiring to continue to grow our sales force. However, we are now seeing the impact of prior quarters’ attrition in the form of lower productivity from our less tenured reps.

In addition, we continue to experience lower productivity from our European region, which is largely a reflection of the macroeconomic pressures.

On the research front, we focused significant attention on the important task of packaging our content into compelling, integrated solutions we call Playbooks. Although we are confident this is critical to driving the success of our clients, we also know that it placed increased demands on our analysts in the third quarter.

This had the effect of decreasing our consulting productivity in the quarter.

We are continuing to invest in driving advisory service productivity as well as ensuring continued reduction in the analyst attrition. These necessary changes have impacted recent performance, but set us up for profitable growth moving forward.

Our core business metrics remain healthy, and our brand remains the premier and trusted source for business and marketing leaders worldwide.

Now let me turn to more detailed review of our third quarter results. Forrester’s third quarter revenue decreased 2% to $68.5 million from $69.8 million in the third quarter of last year.

Net of foreign exchange, revenue would have been flat to the third quarter of 2011. Although our research services products showed growth in the quarter, our advisory services and events business showed declines.

Our third quarter research services revenue increased 2% to $50.3 million from $49.2 million last year and represented 73% of total revenue for the quarter. We continued to see growth in our largest syndicated products, RoleView and Leadership Boards.

Third quarter advisory services and other revenue decreased 11% to $18.2 million from $20.5 million in the third quarter of 2011, and represented 27% of total revenue for the quarter. Approximately half of this decrease is attributable to planned declines associated with more targeted events we ran in Q3, and moving certain events into Q4.

The remainder was primarily attributable to shortfalls in consulting productivity. Our international revenue mix was 28% for the period ending September 30, 2012, which is down from 29% in 2011, due to foreign exchange rates.

I’d now like to take you through the activity behind our revenue, starting with research. As George mentioned, we rolled out 11 Playbooks in the third quarter, bringing the total year-to-date for 3 quarters to 25.

We plan to continue expanding the number of Playbooks available to our clients with a goal of more than 40 by year end, placing it half way towards our ultimate target.

In the third quarter, 308 new research documents were added to RoleView and we hosted 42 webinars with a total attendance of 1,315. At the end of the quarter, the top 3 research roles were Market Insights with 4,168 members, Technology Marketing with 3,845 members and Applications Development and Delivery with 3,719 members.

Forrester Leadership Boards, our peer offering for senior executives, continues to improve, achieving year-over-year revenue growth of 6% in the third quarter. At the end of the third quarter, the Forrester Leadership Boards had 1,973 members, up 5% from September 30, 2011.

Our data business continues to be a critical part of our value proposition. Our continually refreshed data covers more than 75% towards the global GDP.

This gives both our B2C and B2B clients current and actionable insights on 1,400 brands and 300 attributes. It also gives our analysts the most accurate and timely facts they need to drive their research forward.

We continue to add and renew an impressive list of accounts with the addition of 24 new 1B+ companies in the third quarter, including National Bank of Canada, Rolux [ph] and Cox Media Group.

In our consulting business, we saw a growth in the total pool of business booked, but not delivered. Despite that, we saw our consulting revenue decline 6% for the third quarter of 2012.

Attrition in our research organization has contributed to some of the decline in revenue. Activity associated with our Playbooks contributed as well.

And we attribute the balance of the decline to the internal realignments within our sales and delivery organizations. We continue to focus attention on our consulting productivity and structure moving forward.

Our Events business in the third quarter of 2012, we hosted 3 role-based events for business technology professionals in Asia Pacific. It’s important to note that unlike our more established events, these gatherings were intended as brand building efforts with CIOs in this critical growth region.

As such, they were intentionally smaller in scale and not focused on driving short-term events revenue. We succeeded in attracting 359 business technology leaders across the 3 events, and met our financial objectives.

In the fourth quarter of 2012, we are hosting 8 role-based for business technology in M&S, and co-located at 5 locations in the U.S. and the U.K.

I’ll now highlight the expense and income portions of the income statement. Operating expenses for the third quarter were $59.3 million, up 4% from $57 million in the third quarter of 2011, due predominantly to increases associated with higher travel and entertainment expenses and higher depreciation expense associated with technology and real estate investments.

Total company headcount decreased less than 1% as of September 30, 2012 as compared to the third quarter of 2011. As of September 30, we had a total staff of 1,218 including a research staff of 440 and a sales staff of 446.

Operating income was $9.2 million or 13.4% of revenue compared with $12.8 million or 18.3% of revenue in the third quarter of 2011. Other income for the quarter was approximately $400,000, which is consistent with the third quarter of 2011.

Net income for the third quarter was $5.8 million, and earnings per share was $0.26 on diluted weighted average shares outstanding of 22.9 million, compared with net income of $7.9 million and earnings per share of $0.34 on 23.1 million diluted weighted average shares outstanding in the third quarter of last year.

And now, I’ll review Forrester’s third quarter metrics to provide more perspective on the operating results for the quarter. Agreement value, this represents the total value of all contracts or research and advisory services in place without regard to the amount of revenue that has already been recognized.

As of September 30, 2012, agreement value $221.6 million, an increase of 5% from the third quarter of 2011.

For client metrics, as a reminder we streamlined and improved our client count methodology beginning in the second quarter of this year. Our refined system count as a single client counts the various divisions and subsidiaries of a corporate parent, and eliminates duplicate references to the same corporation.

The system also aggregates separate instrumentalities of federal, state and provincial governments which differs from our past practice for government entities. The change resulted in the combination of entities that were previously treated as separate clients.

As a reminder, it did not change the overall trend, and we provided revised historical numbers in our second quarter 10-Q filing.

At the end of the third quarter, our total for client companies was 2,498, essentially unchanged versus the same quarter last year. Client count, unlike our retention and enrichment metrics, is a point-in-time metric at the end of each quarter.

As of September 30, 2012 Forrester’s retention rate for client companies was 78%, which is down 1% from June 30, 2012 and our dollar retention rate during the same time period was 91%, unchanged from the prior quarter and at historically high levels.

Our enrichment rate was 96% for the period ended September 30, 2012 versus 98% at June 30, 2012. We calculate client and dollar retention rates and enrichment rates on a rolling 12-month basis due to the fluctuations which can occur between quarters with deals that close early or slipped into the next quarter.

The rolling 12-month methodology captures the proper trend information.

As of September 30, 2012, there were 2.6 roles per client down from 2.7 roles on June 30, 2012. Now I’d like to review the balance sheet.

Our total cash and marketable securities at September 30 were $238.4 million up $10.8 million from our yearend 2011 balances.

We generated $43.2 million in cash from operations during the first 9 months of 2012, which is down from $46.5 million from the prior year, primarily due to an increase in the amount of cash taxes paid in 2012. We received $8.5 million in cash from options exercised and our employee stock purchase plan in the first 9 months of the year.

During the first 9 months of 2012, we repurchased 820,000 shares at a total cost of $26.2 million. In the first 9 months of 2011, we repurchased 527,000 shares at a total cost of $18.4 million.

We also paid our third quarterly dividend with amounted to $3.1 million or $0.14 per share in the quarter. Year-to-date, we have paid $9.5 million in dividends.

Accounts receivable at September 30, 2012 was $44.1 million compared to $43.2 million as of September 30, 2011. Our day sales outstanding as of September 30, 2012 was 59 days up from 57 days at September 30, 2011.

And accounts receivable over 90 days was 12% at September 30, 2012, up from 8% at September 30, 2011.

Our capital spending for the third quarter of 2012 was $1.6 million compared to $7.1 million during the third quarter of 2011. Capital spending for the first 9 months of 2012 was approximately $4.8 million versus $33.2 million in the first 9 months of 2011.

The 2011 capital spending reflects the investment in our resolved improvement associated with office re-locations, primarily our new headquarters building in Cambridge.

Additionally, the prior year spending includes the investment related to our new website and other customer-facing technology. Deferred revenue as of September 30, 2012 was $124.9 million, up 6% over September 30, 2011.

Deferred revenue plus future AR, a key indicator of future performance, grew 8% year-over-year. Our future AR balances are amounts to be invoiced in the future for clients with multi-year deals or scheduled payment terms.

Before I discuss the outlook for the balance of the year, I would like to talk about our capital structure and our plans to leverage our balance sheet. We believe the long-term prospects of this industry and the company are extremely healthy.

As such, our first priority continues to remain our organic investment. We expect to grow sales capacity at 15% in 2013, positioning us for growth moving forward.

In addition, we will continue to focus on productivity improvements across all aspects of the company.

Finally, we will complete the rollout of Playbooks, and our enhanced attendee experience at Events. We believe these efforts will be critical to the long-term success of Forrester and the 17 roles we serve.

In addition to organic investment, we continue active exploration of inorganic opportunities. We have a strong pipeline of high potential acquisition candidates, but as we have said before, we believe in the importance of strategic fit and sensible valuation.

At present, we believe our balance sheet is more than sufficient to support our short- and medium-term organic and inorganic efforts. The fundamentals of our business are strong, and combined with structural changes we put in place this year to ensure long-term growth, we believe our share price is undervalued, based on recent performance.

We intend to repurchase up to $100 million of our shares by the end of 2013, subject to market conditions, business opportunities, and unanticipated events. To support this buyback, our Board of Directors has authorized an additional $50 million for the stock repurchase program bringing the total current authorization to $100 million.

We plan to begin aggressively buying back shares immediately. Before I provide more detailed guidance on the fourth quarter and full year of 2012, I wanted to make a few comments about 2013.

We typically don't provide a perspective on the upcoming year until February. However, I wanted to provide some insight into our outlook.

We talked a lot about the changes that have occurred during 2012 and their impact on performance. We’re beginning to see real progress on these initiatives, however, with attrition and the soft bookings year-to-date, we will see the impact on revenue in 2013.

You should expect revenue growth that is in the single growth range with some margin compression as we invest in additional sales reps and analysts. As we progress through the year, the most visible measure of financial success will be on the balance sheet with growing deferred revenue.

We’ll provide more detail on our 2013 outlook in our next call.

Now I'd like to review our business outlook for the fourth quarter of 2012. As I discussed at the beginning of the call, we have implemented a number of significant initiatives and organizational changes.

Productivity gains expected from these changes have taken longer than expected to materialize. Coupled with abnormally high attrition in the first half of the year, this has resulted in third-quarter sales and consulting performance falling short of our targets on top of a softer than expected first half of the year.

As a result, we expected in the fourth quarter to be lower than planned. Although we're within revenue guidance for the third quarter, we did fall on the low end and the cumulative impact of that combined with lower fourth quarter projections, results in the full year revenue being 1% to 2% below the revised guidance we provided last quarter.

Amortization of intangible assets, which we expect to be approximately $600,000 for the fourth quarter and approximately $2.4 million for full year 2012; stock-based compensation expense of $1.4 million, $1.5 million for the fourth quarter and approximately $5.3 million to $5.4 million for the full year 2012; reorganization cost of $1.4 million for the full year 2012 and investments gains and losses.

For the fourth quarter 2012, we’re aiming to achieve total revenues of approximately $72 million to $76 million. This range reflects to minus 4% to plus 2% change versus prior year.

Pro forma operating margin of 12.5% to 14.5%. Pro forma income tax rate of 39% and pro forma diluted earnings per share of approximately $0.24 to $0.29.

At this time, we’re revising our pro forma full year revenue and EPS guidance. We are targeting total revenues of approximately $290 million to $294 million, pro forma operating margin of 13.5% to 14.5%, other income of approximately $1 million, a pro forma income tax rate of 39% and pro forma diluted earnings per share of $1.07 to $1.12.

We provided guidance on a GAAP basis for the fourth quarter and full year 2012 in our press release and 8-K filed this morning.

Thanks very much, and I’m going to ask Kelley Hippler, one of Forrester’s Senior and most successful sales leaders to join George and I for the Q&A portion of the call. Kelley has 14-plus years with Forrester, and currently runs our emerging sales team in addition to be an acting CSO, which targets accounts with less than $1 billion in revenue.

I’ll now turn the call over to Ellen, our operator to begin our Q&A.

First, I want to ask about the weakness in the consulting business. I was just trying to understand your comments, it sounded like the volume of business book was up, but you just couldn’t deliver on that.

So I’m trying to understand if the volume was up, how much of the impact or least of the booked business was macro-related versus how much was related to some of the challenge with the research analysts being busy working on Playbook and things like that?

Tim, it’s Mike. Yes, I would say that it’s primarily, I think the challenges are a couple of places, one would be our analyst headcount is below where we had targeted, right.

So we’ve had analyst attrition that both analysts and sales attrition began to subside in Q3, but from a planned headcount standpoint, we’re still below where we expected to be. So literally a capacity deliver is a little constrained.

Then through our existing analysts, I think that they’re incredibly busy, but they’re being pulled with Playbooks and that’s stretching their time a bit. So that’s certainly impacting.

We are seeing some macro -- I would say primarily in Europe that’s affecting us, and that seems to be the case both in consulting and in our normal syndicated businesses. So more the macro I would say outside the U.S.

but within the U.S. I think it’s more primarily a combination of existing analysts’ productivity due to Playbooks and just the sheer numbers of analysts being lower than what we had targeted.

Is the macro environment worse than it was, say 3 to 6 months ago or is it kind of more the same of what you’ve seen?

In Europe, I would say it’s just more of the same. I think it has been a soft environment all year.

And it has been difficult, I think it’s been a difficult environment to sell over there.

We’ve not observed a change in the domestic market -- in the U.S. domestic market, despite all of this earnings mess that are coming out right now from companies but we did not observe any major change.

Do you have any comments here, Kelley?

No, I would second that, George.

Okay. And as we think to your comment towards next year, the margins specifically I guess I was going to ask about.

Was that a full year comment or was that more related to the first part of the year? Just kind of curious and then I’m assuming the big issue is if revenue is not up but you are going to accelerate sales force growth, that, that is going to depress the margins.

But any more color on kind of what you are talking about?

The comments were relative to the full year. I think what will happen as you think about the way the model went up working, Tim, is that, I think that revenue will build as the year progresses.

Because what is happening now is we are hiring salespeople, we are getting them back in and they are going to ramp. And then figure 6-plus months to ramp, so they will start booking business.

That revenue, we’ll start to see, but you are going to start to see it beginning really in Q2 and then rolling out. It will continue through our hiring [ph] process.

So revenue will grow relative to prior year over time. But I think for the full year it is going to be a single digit number.

So that would suggest obviously first half softer than second half and we will continue to invest in the sales force. So what’s going to happen is, you are going to have headcount continuing to be added as we build out the business.

And honestly this was not where we expected to be in the model, I think we expected this year to be the rebuild year and that next year we would lever up. I think the thing that hurt us is the high levels of attrition.

So what’s happening is we’re having to hire a lot more and later than we ever anticipated and therefore it’s impacting up our ‘13 numbers, which is why I’ve said that I think success process is going to be looking at balance sheet numbers like deferred revenues, a steady growing headcounts on the sales front and the analyst front and that to me is going to signal that we’re doing absolutely all the right things. And you’ll see the revenue and the P&L progress in a meaningful way as the year progresses, and we’ll obviously going more detail in February, but I wanted to, if nothing else, shade the conversation so you get some senses how we’re thinking about next year.

Okay great. And my last question which is the repurchase authorization, can you talk about how aggressive you plan to be on that and within that context, the limitations, I guess that the trading volume puts on you.

I mean can you, just buying day-to-day in the market, can you buy $100 million of stock in the next year, and I guess is that the intention?

Yes, I mean I think, first of all, yes it is our intention, absent as I said material change, material can beat things like a great acquisition comes along and we decided that should preempt and would be a better investment than even buying back shares, that certainly would be one, if we believe float [ph] becomes materially smaller than we would obviously have to rethink it. What our feeling is Tim is that we’re going to be out there, we will be buying in the regular market, but we also have the ability to buy blocks, and we’ll be looking for block activity, if there are folks who want to rotate out, we certainly want to be there to absorb it, we believe our shares are undervalued, but we understand there might be some shareholders who aren’t going to be patient, and I think it’s the Board’s feeling that at this pricing level, this is -- it’s a great buy.

And so we will be ready to buy in block. To some degree, if we can’t buy all of it, that’s a good sign.

I mean people are holding on to their shares, and they believe in the long term piece of the business, and frankly I’d take that probably as a positive. And then, we will look to actively deploy that cash in other ways perhaps to reward shareholder value so.

And as the year progresses well, and as the quarter progress, we will be updating you on the activity. Obviously be visible in the balance sheet.

You will be able to see what we can buy, and we’ll try on a very timely basis to keep you folks abreast of everything we are doing.

George, could you talk a little bit more about the comp plan changes that you talked about making and kind of what changed in the quarter. Help us understand both the impact to the expense base, but also how you were able to help stem the tide on the attrition.

I’m going to actually pass the answer over to Mike. He is very close to this.

Yes, Dan, I’m going to give you my take on the specifics then I think Kelley can give you some color particularly in terms of how they have been received by the sales organization. So I think that to the points George made early, we took an approach on comp in the beginning of the year that I think conceptually was -- head us in the right direction.

This concept of base versus growth and rewarding growth more than base, but some of the -- I would say material changes we made, particularly more recently, get around to when do we begin rewarding reps. Do we reward beginning on dollar one, that’s not how we started the year.

So we looked at that. And I think the plan we rolled out also was too complex.

It had a series of linkages in it that we unbundled and made simpler. And I think the result is, and the feedback we are getting from reps is that these are meaningful changes, it’s -- I better understand how I make my money, there’s a clear path to reward and when it’s simpler and easier to that, we think it's going to drive business.

So we got simpler, we focus more on dollar one, we still have leverage on growth. You still make more money, if you sell more syndicated, the basic core concepts are in place, but I think we took away some of the complexity, and I think it made it easier for reps to see how they make money, and find a way to reward sooner.

So that's sort of the overview, I let Kelley talk to the color in terms of how it’s being received, because we’ve made a number of changes Q2, Q3, but the meaningful ones in Q4 as well.

Sure. So Dan, this is Kelley and to Mike’s point, I think that the sales force understands and is in line with the philosophy that was rolled out earlier this year, where we want to be driving a sales compensation plan that incents growth.

And I think that the additional improvements that have been made over the course of the last quarter have been very well received, is certainly a contributing factor to the decline that we've seen in attrition and to help motivate us in the fourth quarter and beyond.

Is there any kind of net change in the overall sales expense from the changes or how should we think about that?

What was the question, Dan?

So I'm just trying to get about the complaint changes, how is that going to show up in the financials in terms of the overall sales expense is that we see gotten more growth in that and lower growth levels or help me understand how that's going to play out on macro basis?

Yes, a fair question. Yes, there is a little bit more cost associated with it, I don't think it's meaningful, it actually falls within what we would have deemed to be our targeted ranges.

So I don't think that the dollars are meaningful. I mean, as I look at the cost piece, where we really suffered from a cost standpoint was losing reps, because then we have to bring in folks and they have to ramp.

So to me, this is a better trade-off. I think the changes in the comp plans net-net are going to result in lower cost, because attritions are going to come down.

So I think the dollar trade-off is actually a pretty easy one and as I look at it, we don’t need much of an improvement in attrition to get a payback on these comp changes. So I’m very comfortable from a cost standpoint that these things are the right thing to do and actually are not going to adversely impact the overall P&L in any meaningful way.

All right. and then just to follow-up on Tim’s question around the consulting side of the business.

Are you at the point now where you are actually having to turn down some engagements, just because there is not the availability, are you able to book these and give them in backlog, and we’ll see in fourth quarter and more in 2013?

Yes, I give you my view and Kelley can give hers. I’ve not heard of anything where we’re turning down engagements.

I don’t think that’s an issue. I think that we can manage our way through this, and I’m comfortable that we’d be able to do that.

But we’ve not turned down any engagements. Kelley you add...

No, none that I’m aware of.

The pool is large enough to support the revenue.

Okay, great. And then last one just on the dividend if we do get meaningful tax law changes, any thoughts about what’s the right mix between your purchase dividend et cetera?

Yes. I would say we did talk about at the Board Meeting, and I think clearly, we would -- the Board plans to look at where we sit obviously is we’ve declared a dividend for this quarter, and that would get paid out.

And when the Board meets in February, they’ll have a decision to make about what we do with the dividend going forward. And I don’t think there’s a clear answer there, because one of the board members made the right observation that many companies have been paying dividends when dividend tax rates were a whole lot higher.

So the question is, and a number of people hold our shares, half of that is probably in 401(k)s, so it’s -- we’ll have to evaluate that when we get to that point, Dan. Share repurchase activity at $100 million is a pretty big piece.

So if we, just to give you a perspective, we paid a little under $10 million to date in dividends. If we were to modify that in any way, it doesn’t -- it’s not like it adds a huge pool of money back into the repurchase.

So I think those become really 2 separate events, and that’s how I would think about them right now.

I was hoping to get some color on conference attendance. I don’t know if you or how many events you had in October, but maybe give us some color on sort of actual attendance or forecasted attendance, what that looks like for 4Q events?

We forecasted tenants; the events we have that are scheduled are little smaller for fourth quarter. So I don’t know if any appreciable difference there?

In terms of event attendance to date, our events business, off a bit, but not significant, right. So it was definitely a delta for us during the course of this quarter, but I think it tends to be so mixed by event too, Brian.

We have some events that continue to be incredibly popular and well attended and some that are little bit softer. So I don’t think there is any meaningful trend yet.

I mean we typically look at that. I think George historically sort of labeled that, one of the canaries in the coal mine as you think about our business, but I don’t think the clear picture that is emerging there.

I would say not appreciably up, but not appreciably down, I was just at the Orlando event, which was 5 DT roles and that event was very well attended FLBs were, I think, at the highest point they’ve been at, as far as attendance goes. The CFP [ph] event I think I talked about on the Q2 call, was one of the largest event Porsche’s ever held.

So I think it’s inclusive at this point. Not really down -- sort of in the middle.

I would make a comment because we referenced it briefly. We are looking at our events business and that’s more of a strategic look, not an operational sort of fix it.

Look, it’s really trying to take our events to the next level and that’s something that I think George has been pushing to say, how do we take events to sort of this next place. So more to come on that, but we plan to look at them in a more strategic way and think about taking them to a different place.

In the world of TENEX [ph] , in the world of TED, in the world of South by Southwest and the World Economic Forum, our forums, I think look a little bit long in the tooth and so Cliff Condon has taken over events over the last several months and we are going to be really changing the way we do them, what is on the stage, there is a -- there is a renewal events which I’d call kind of Phase III of events which will be undertaking next year. So we will improving the events as an experience for the clients.

Okay, great. Also, Mike I know you changed the methodology on how you count clients, but that client count has been stuck in the 2,500 range for the past 5 years and I think in aggregate, the sales force is probably up 50% over that time.

I mean on the historical numbers if you made the adjustments I’m guessing it would just be a single digit percentage modification. So I’m just wondering how to think of it -- does that say anything about the number of addressable clients for you guys and as you think about scaling the sales force from 450 to 1,000, I’m wondering what you think the client count looks like with the FAS in reps?

It’s a really good questing, Brian. A couple of things.

When we went to the new structure this year, we consciously said that other than the vendor world, we were no longer pursuing clients less than $500 million of revenue, so that’s a conscious shift. So by default, what we're trying to do is concentrate our efforts very much in larger companies and that is a smaller universe when it's all done, but the idea was to penetrate and grow within those companies.

And so that's our by design piece, I think it’s fair to say and I let Kelley give some color, we have a lot of opportunities just within the clients that we have today. It’s not to say we aren’t still going to add a lot, we have a new business team, they’re out actually adding clients and with small companies, too, small vendors, is a natural level of churn that create some noise in client count, but there’s no question I think as we go forward, and we move to a 1,000 reps, it’s not -- I don’t think it’s a doubling of our clients, it’s really going to be a growth within the clients that we have in a meaningful way as well as adding more and Kelley I don’t know what’s your thoughts are, but you’re closer to it than I am.

Sure, absolutely so just to add to that, I do think that we’ve tried to refocus a lot of our energies into driving up the spend within some of the accounts that we have. That was a key driver behind the move to segments, and we do expect to get there over the fullness of time.

We do have a new business team that is focused, to Mike’s point, on the net new logos of clients that are about $1 billion, which are in a specified target market that we have, but those tend to have longer sales cycle as we move forward. So that's a contributing factor to why the needle hasn’t moved much on the client count front, but we’ll continue to focus on both growing and spending our existing clients and bringing on more net new logos as we move forward.

It really a potential market, some of our larger competitors, their client had, as you know in the 10,000, 11,000 range so we have a lot of problems, but this is not one of them. There are many, many companies who are still to be clients of Forrester.

Okay, great and Mike, with deferred revenue up, is it fair to say that bookings picked up a little bit in September quarter?

No, I would say, no. I think they actually I think deferred revenue because it runs out a bit, I think syndicated bookings were okay.

So I think consulting bookings, I think we are seeing a little bit of a lag there. So it was not, from our perspective, I will say, we weren’t happy with the quarter.

Again we are not, I think, being down even in single digit land on deferred revenue is not great. So we are not super thrilled with the quarter.

So we didn’t see an uptick quarter-over-quarter from Q2 to Q3. So...

Okay and George, you referenced some pretty impressive metrics in terms of better engagement on Forrester.com and in terms of document downloads et cetera. Curious if you have if you’d seen any improvement in the metrics a little further down the funnel, maybe on the conversion side?

I would say that when we went very social and I talked about the social numbers are pretty impressive. We did that to -- ultimately to gain more clients, to create more leads.

I would say that we are seeing some of that but not as much as we want to see. I think there is a linkage between our social content and our content behind the pay wall could be better.

There is -- Tom Pohlmann, our new Chief Marketing and Strategy Officer, is very focused here. He is actually just hired a #2, Jeff Ernst, who is a technical marketer who is spending lots of time on trying to understand exactly how we are getting hard conversion rates from social over to clients.

So what I will say is lot of potential here, not as tapped as it will be in future.

One comment I would make, Brian, just in general, I mean we -- this has been the year really of learning. I mean just as these sales folks have to master all roles, the analysts have to master all salespeople, in the old world, they sort of had a smaller subset of sales folks to work with, now they have a whole lot, so there’s a transition in terms of how we operate to George’s point, where we’ve made a number of improvements at the front end, where clients are coming in, and we’re working our way through to the back end to take that into something that’s very actionable, so once we get this process to really nailed down, it’s going to be interesting in a very good way in terms of what the potential is.

Yes, George I’m curious, have you seen any competitive response to the introduction of Playbacks?

No.

Okay, this one is for you Mike, did I hear you say that operating margin will decline next year or...

Yes, I think that we get see some compression, I’m not going get into how much, Vince, so I mean I don’t -- again I don’t think it’s traumatic, because we haven’t finalized our plan, and we haven’t made a lot of final decisions, but I just look at just trying to give you a macro view of how we think about next year, and think about how revenue is going to roll out, and also looking that the sales investments we plan to make and analysts investments and some remaining technology investment. It’s my view that is potential the margin could compress a bit from where we are today in the near term, and then obviously expand it as we move out, and again thinking about the year is going to be more pronounced in the first half and then the second half of the year should -- progress and get better, so.

Again, I wanted to talk in generalities, normally I don’t like to talk about the upcoming year until we’re new in the beginning of February, but I think it’s appropriate, given all that went on, just so people really understand that -- there’s whole cycle of attrition has a very real impact, and we’re starting to come out of that now, and that’s a good thing, and we’re starting to move forward. But it is just the nature of the dynamics of how this business works, particularly with the bulk of our revenue being syndicated and deferred.

So as people come out and start booking business, it spreads out over the 12-month tail.

Okay, George, another one for you. I think as you said, you lost more senior salespeople than expected over the past year, which impacted productivity.

Did that trend continue in the quarter?

No, that trend was down in Q3. We expect it will down in Q4, Vince.

What kind of level is established attrition running at, Mike, relative to where you normally see it?

Without getting too specific, overall research attrition is typically runs us, I would say mid to high teens and we’re breaking the 20% barrier. And that's overall research ranks.

Now embedded in there is usually and is very much in this case, typically higher numbers with our research associates, our most senior people. And those folks tend to run higher, and analysts tend to run lower.

Analysts, right now, are on an annualized basis, running below a 20%. So we're not too far out of range, but I think in the year where some of our analysts are offline, working Playbooks, it's exacerbated, Bill.

And so any little incremental, coupled with the Playbook activity, we really feel it. And so I think that's what's pressuring a bit.

And so I put it out there, just because we are really, we’re watching it closely. Again, I don’t the numbers are terrible.

The downside to analysts, it's a good news, bad news. We tend to higher really, really good people but it tends to take longer to hire analysts and it does sales folks.

And it’s not that -- our sales folks are bad, our sales folks are great. The ones we’ve been hiring are great, it’s just the analyst recruiting cycle is longer than the sales recruiting cycle, so.

That’s why I look it my highlighted again. I don’t think it’s terrible but it is different than what our run rates have been.

Okay. Can you give us a little more feel for the difference -- I know attrition in sales is been more of an issue.

I think it’s been more of an issue in Europe, complicated by the, obviously, headwinds in economy over there. So are you closer to normal attrition in North America than in Europe?

I think it’s society and I would say couple of things to, when we built our plan in ’11, Bill, going into ’12, we actually hired -- we had a -- for the most an across-the-board hiring plan that was almost equal as a percentage basis by region, right? And in hindsight, given what happened and has been happening in the macro, we would have been better served probably putting fewer new reps in Europe and putting more in North America and Asia Pacific.

So we definitely feel that pain so it’s a resource allocation issue that will rebalance and we are rebalancing as the years progress, right. So that’s a big piece of it.

So as we've seen some attrition, we are hiring some back, Bill, but we're not adding net new in Europe right now. We're going to wait and see how that situation progresses.

So yes it's been a little better and I think that it continues to get better in North America and that’s encouraging. And again, we are continuing to watch it.

I'm not yet ready to say this is a permanent trend, but I do believe it's going to subside in Q4. There could be some noise in Q1 as there always is as people sort of roll into the New Year, hiring picks up, but by and large I think we’re moving in the right direction, and I feel like all the things we’re doing are sending the right signal to the selling organization that we want to make the necessary changes and keep people on board and make things perfect.

And maybe this is for Kim (sic) [Kelley] , as you think about where the sales force is in terms of coming up the learning curve on the new CRM, is it going to be pretty much everyone there this quarter?

Hi, Bill, this is Kelley. I would say -- no, no problem.

I would suspect that by early Q1, we should be fully leveraging a lot of the tools and capabilities, because Q4 is our busiest selling season, we try to focus our efforts and energies on those core functionalities that are needed to get the jobs done right now, and I think that there are other things around collaboration as George mentioned earlier in the call, that will help us see an uptick in productivity once we get into 2013. The good news is, a lot of my reps are younger than I am, so they are picking it up more quickly than some of the sales managers.

I know how you feel.

Now Bill knows it [ph]. Mike Morhardt is coming out of 2 sales force environments, and so he is very familiar with the tool, that the processes and he will be the great advocate for the use of the tool.

Yes, the timing might be right too, because I think Mike is going to come in with ideas about what he wants to do with the tool. So I think if we get a foundation complete to Kelley’s point then lot of the enhancements that Mike's got a very strong view about where he wants to go, and I think that's going to be -- it will work out quite well and it’s all said and done.

Last one maybe for you George, I think the key differentiator for Forrester certainly is -- one of them is certainly the focus in marketing strategy, it really stands out there as our consulting firm. And how are you thinking about maintaining or maybe expanding on that competitive advantage that you have?

Yes. We are shifting this strategy somewhat on the sales side, in the sales process, Bill, where we are now entering companies in the marketing -- with the marketing strategy roles being called on first.

And we call that fleeting with the customer, I mean essentially our unique value proposition is that, in a world where technology is changing your customers, we can help you make better decisions. And every company, I don’t care whether you sell pills or tires or insurance, your customer is behaving in a very different way.

So we are finally changing the way we sell in entering with the marketing strategy roles first and then moving to the BT roles second, then we call that leading with the customers. So it’s an obvious advantage we have.

And by the way, it’s also highly resonant advantage that we have. As you know Ginni Rometty took over CEO of IBM.

In the first conference that she -- that IBM put together and the first one that she spoke at was a conference for marketing executives, and not for IT executives. And in fact, we have [indiscernible] analysts spoke at that event for IBM.

So we think it’s a great advantage, it’s one that we are going to leverage. And Tom Pohlmann, as the new Head of Marketing Strategy, is pushing this very, very strongly and we already, as an example that I actually gave you on Playbooks was a marketing executive at in airline, and again, I’ll just reiterate what she said was she loved about it, was it connected her to the IT executives of the airline and that made her job easier.

So has the Playbook rollout kind of been disproportionate in the marketing strategy roles?

It’s been about equal both BT and market. I mean you need Playbooks on both sides.

So it’s been about equal for the 2 sets of roles.

Great. Thanks very much, Ellen.

First of all thanks everybody for joining the call. We do appreciate it, and in short time we’ll be out on the road, and we look forward to seeing many of you in the very, very near future.

So thanks very much, and have a great weekend.