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Your Customers are Gold in a Down Economy
The best risk mitigation for a prospect is a satisfied customer.
Posted Sep 22, 2003
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The ever-skeptical Dilbert, talking with what looks like an enterprise sales rep. Dilbert asks, "Can we speak with your customer references?" The sales guy says, "Sure," and hands Dilbert a list of customer contacts. In the next frame Dilbert dials the first reference, and the sales rep's cell phone starts ringing. After a while, defeated, Dilbert says, "No one answers." The sales guy replies, "Why don't you wait until I get into the parking lot and try him again?"

Funny? In today's economy customer references are more than window dressing or nice-to-haves. The best risk mitigation for a prospect is a satisfied customer. Not just any customer reference, but one in a similar market that has successfully deployed your product or service, and experienced a positive ROI.

"When a company is trying to sell me enterprise technology, my first question is, Who else is using your solution and what was their return on investment?" says Didier Arnaud, CFO of Monarch Beverage Company. "Most of the time the sales rep avoids the question. I'm skeptical about their product when they have no other company with a similar business challenge to provide a recommendation."

Buyers cannot afford to acquire a such large B2B purchase as technology with low or no return on investment. And where risk is perceived buyers wrangle for hefty discounts or require multiple product demos or proofs-of-concept, which significantly raise the cost of sales. Customer references, at all points in the sales cycle, mitigate that risk and allow your company to validate its solution and reduce fear of the unknown. The result? A shorter sales cycle, less pressure to discount your product or service, and higher margins.

To make sales and marketing easier most companies have some sort of customer reference program in place. These programs range from a loose compilation of spreadsheets and case studies to complete organizational processes and support systems. No matter where your company is on the spectrum, incorporating these key features into new or existing reference programs will bolster your ability to meet corporate goals.

Diversify your reference base. Build your reference base so that selected references represent the market space your company hopes to dominate. Develop references that cover the entire spectrum of industries, company sizes, business challenges, product lines, and partner offerings that sales might encounter. Also, match reference representatives' roles and titles with those of your prospects, so questions and concerns will be addressed in a manner most meaningful to them.

Whether your prospect is a banking IT manager addressing straight-through processing or a telecommunications line of business owner with order management portal requirements, keep in mind that prospects prefer to speak to their own. References in a similar role, and at a similar professional level, from a company with a similar business problem (ideally, in the same industry), will give you the best results. To simplify this task select and educate multiple representatives from each reference account. This should enable you to match a reference account representative to your prospect.

Create a customer resource once. Leverage repeatedly. Reduce wear and tear on sales reps and on your references by following a one-to-many reference method. Develop a core set of marquee references once, and then leverage the information you gain from them repeatedly by creating internal tools and external collateral that describe their unique situations, from business challenges and opportunities to ROI. Enable reference seekers, whether from sales, marketing, public relations, product management, or engineering, to brief themselves, their prospects, analysts, or journalists using these reference tools. By any means, avoid repeatedly calling sales and your customers to get the same, or additional, background information. Capture it once, codify it, and enable greater return on references.

After all, when prospects ask for references sometimes it is enough to provide a name, background, and proof of a successful deployment. Often, written success stories meet all reference requirements. By having reference information and collateral on hand, you will find it easy to support a large number of reference requests, and you will enjoy lower reference attrition. As a bonus you will notice your sales team is more willing to broker reference calls when there is a validated need.

Leverage technology for an accurate, complete view of your customers. According to industry analysts, integration is one of two top concerns on the minds of CIOs. It is not surprising when you consider that customer information is often widely dispersed across an organization. To get a 360-degree view of any customer, the person on the end of the reference request likely has to access revenue databases, technical support and call-center applications, accounts receivable programs, and shipping and receiving systems. And chances are good that if he or she takes the time, and goes through the trouble to gather that information, it is going to be redundant, inconsistent, and often, inaccurate. Building enabling technology is critical to a reference program's success. When doing so consider issues from system integration to data integrity, as well as ease of use for sales and marketing audiences.

Implementing a successful customer reference application does not mean spending eight months deploying a multimillion-dollar, enterprisewide system that uses hordes of IT resources and requires hundreds of user-acceptance testing and training hours. Microsoft Access databases, low-end and hosted CRM applications, even homegrown solutions can be and are effective. It is not so much what you implement, but how you implement: How users interface with the system; how the information is captured and displayed to meet all stakeholders' needs; how the system is managed and maintained; and how it integrates with other key systems across the enterprise.

Communicate, communicate, communicate. While information supply and access is critical to the success of your customer reference program, communication is the most vital component of a successful customer reference program. Clear, consistent communication internally and with your customers is key.

Start by practicing good internal communication. If your program users don't know how to engage the reference team, or don't know where to find and how to access information, your program will have little to no value. Companies that follow four communication guidelines will experience optimal effectiveness in their customer reference program:

1. Provide information in advance about the program's rules of engagement and devise creative incentives for internal groups to support the program. Consistently provide members of your company with updates on the program's usage and success. Information about the number of available references is useful, but what is truly valuable for executive management, and should ensure the long-term survival of customer reference programs, is to tie your program to influenced revenue, to analyst and press mentions, and to downloads of success stories/case studies. Usage is important, but results provide real program justification.

Encourage users, especially sales, to provide your team with feedback and input about the process on a regular basis. Reference programs like corporate strategies, change due to economy shifts, size of customer base, new product introduction and other variables. Inform users about updated or new information, new internal tools and external collateral on a monthly or quarterly basis.

2. Consistently communicate with your customers to keep them engaged, informed and interested. There is no need to develop elaborate communications tools or long-winded messages. A simple email newsletter or customer update monthly or quarterly engenders loyalty.

3. Use your successes with other customers to keep your long-term customers excited and engaged with the market adoption of your products. In practice, this has been an effective means to introduce new product and service offerings, as well as a way to keep the customer relationship alive. Beware: a certain degree of elegance is required to do this well. Provide customer success information to existing accounts in terms of best practices, as well as in the form of helpful information on improving how they currently use your product or service.

4. If the goal of a communication is to encourage customers to take an action, carefully divide and target. If your customers currently use a certain version of a technology product, for example, and you want them to buy the upgrade, divide the customer list into specific segments (e.g., by business challenge, region, or industry). Then develop specific success stories for each segment that demonstrate how an almost identical customer achieved significant ROI. Taking the direct approach is a powerful persuasion tactic.

If you're part of a good company with good technology, share your customers' successes with the world. After all, the value an objective customer provides is higher than that provided by any sales or marketing tool or tactic--it's gold.


Promise Phelon is founder and principal of Phelon Consulting Services. After a decade of developing customer-centric strategies within enterprise software companies, she launched Phelon Consulting with the sole objective of enabling enterprise software companies to leverage their sales and customer assets for improved marketing and more effective selling. Prior to founding Phelon Consulting, Phelon held a senior product marketing and strategy position at BEA Systems and has held strategic positions at SAP and D-Communications. She holds an MBA in strategic marketing from Pepperdine University and a BS from Southern Methodist University. Contact her at promise.phelon@phelonconsulting.com.

John Sommerfield is a senior consultant Phelon Consulting. Contact him at Johns@phelonconsulting.com.


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