Customer Reference Programs Lack Resources

Currently, most customer reference management programs are one-sided and are measured by traditional tactical metrics, according to a new study conducted by Phelon Consulting Services. All that could change, however, in the very near future. According to the study, 2004 could be the year that customer reference management is used more widely as an interactive tool between organizations and their customers. "There's a lot of upside for reference programs to become much more strategic and enable sales efficiency and effectiveness," says Promise Phelon, principal and cofounder of Phelon Consulting. Phelon says that if companies shift their reference programs from underneath a marketing umbrella and into a larger customer care program, the program will lead to more fruitful relationships with customers. The study says customer reference management can fit well into the following value equation: successful, loyal customers + market-centered technology + efficient sales = sustained revenues. "While a vast majority of smaller businesses participating in the study said they were extremely understaffed, everyone who participated said they would devote more resources this year into a customer reference management program," Phelon says. She adds that larger enterprises have the most evolved management systems, more in line with customer affinity programs than the one-sided systems in place at smaller firms. One large obstacle in getting reference management programs up to speed is that no single technology that helps organizations foster a strategic program exists. "One major issue we found compiling the study was that respondents said an integrated and comprehensive reference-management system was impossible to find, " Phelon says. To circumvent the obstacles Phelon recommends that companies generate program interest among their customers. "Companies need to create a value proposition for their customers, more incentives for them to reference the company to others," she says. Smaller firms tend to have some sort of incentive in place, as the report found that 80 percent of midsize firms had a reference incentive program in place, while none of the larger firms had any incentive program. And although all participants in the survey said they would be adding additional resources to their reference management programs, Phelon says careful budgeting is important. "Companies need to budget strategically, but also accurately, based on where they are going with their program."

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