Customer Reference Programs

When I was in fourth grade I got an “A” in history class. Later in life I successfully graduated from college (not by much but I graduated – hee hee). Years later I completed a triathlon in the time I had wanted to. I constantly set goals for myself – both personally and professionally – and reevaluate what I’ve been doing when I do or don’t meet that goal. Companies aren’t much different than us as individuals. Companies rely on success.

How do you measure success with a customer reference program? You can measure in different ways, but the key thing is to clearly mark out what success will be for your program and let that set the standard – is it brand recognition or revenue generating or a combination of both?

So you got a customer into the New York Times, but is that success? Can it directly tie into a sale? That might be difficult to measure, unless of course the Sales person put into your CRM tool that the reason the customer called was because of the article. Chances are probably pretty slim that that’ll happen. Based on a revenue generating “success” this one probably won’t fit the bill. For brand recognition, it’ll be huge.

For Marketing references I suggest setting a number of goals such as number of customer press releases announced, number of case studies distributed, number of customers highlighted in articles, types of customer references you want highlighted (specific products, verticals, campaigns supported by press releases/case studies). Success on the Marketing side will generally be much more brand recognition than revenue.

Tracking what references were given to Sales people for prospects at the end of the quarter and year is critical for the revenue generating success factor. If you can say at the end of the year that references you provided were influential in $15 million worth of revenue then your success has been measured. I do this by logging all sales requests along with who the prospect is, what references were given, time it took to give the references and other basic information such as what specifically the Sales person was looking for (ie particular vertical, specific products, specific competitor replacement…)

By creating a form and logging this information, I can then go back at the end of the year and say in January I provided 10 references to Sales that led to $250K in sales and 90% of the requests came from APAC. In October, that number grew to 50 references and led to $4M in sales with 50% from APAC. I can also break it down by region and types of references. This helps me justify the program and let’s me show (and not just tell) in a graphical way the increase/decrease of requests, how long it takes to get an answer to the sales person, how much money is being brought in and the like.

No matter how you run your program, make sure you have a way of measuring success. If you can’t say you were successful (not that you weren’t) then I think you’re in prime picking to have your program cut. And once you were successful, let everyone know!

It’s very easy to run a customer reference program sitting at your desk, writing emails and talking on the phone.

When given the opportunity to meet your customers face to face – don’t even hesitate. Just do it - even if it’s a quick hello and not a lunch or dinner meeting. Like with many other things in life, meeting someone face to face changes the relationship. It literally puts a face to the person you’ve been talking to.

I recently had the opportunity to meet a Fortune 500 customer of my company’s for an analyst briefing. In the end, I spent three hours getting to and from the meeting for what took a total of 20 minutes face to face with the customer. Sounds like a huge waste of time but now I am 100% confident that when I call that customer or email him, he’ll get back to me in minutes. In fact, I sent him an email earlier this week asking him for a phone interview so that I could write a press release on his company being a customer of my company. Within 2 minutes (120 seconds – not even enough time for me to walk to the water cooler and fill up my water bottle) he wrote back and said yes. Did I mention that he’s a director at a Fortune 500 company? That is extremely impressive. And, I have to give all the credit to the fact that I met him face to face a few weeks ago. Otherwise, what’s going to separate me from the hundreds of other emails he gets on a daily basis?

So, even if it takes all day to meet a customer which will end up being a 10 minute meeting…DO IT! The pros far outweigh the cons. The three hours I spent traveling will ultimately be made up in time I won’t have to spend chasing him later on for an interview or approvals. He knows my name and my face.

With the risk of sounding cheesy…

Roundtrip train ticket to meet customer = $15.00
Giving up half a day of work at the office = $400
Having direct access to a customer and a personal relationship with them = priceless!

Somehow this week flew by and I just realized that it’s already Friday and I hadn’t posted anything yet.

With another quarter completed you now have or should have a whole new list of customers to chase – and hopefully that list is long. If you haven’t already been talking to your Sales team about getting customer references, now is the time because they probably aren’t pulling their hair out this week since it’s a new quarter.

You now have two tasks…

1 – talk to Sales and see what accounts they won over the past quarter (if you don’t already know)

2 – get it in their head that you won’t leave them alone until you get a press release, case study, media opportunity, logo usage, name usage, etc. out of some of their customers.

It may take a while for the customer to deploy or install or do whatever they have to do to your product to get it up and running/used, but the sooner you have the Sales person asking for stuff, the better chance the customer will agree to it.

So get out there and start bugging your Sales people!

I have heard a lot of mixed reviews on if incentives programs work for customers. I personally have never had a point system for my references so my viewpoint may be a bit slanted. But let me explain my positioning.

It’s a lot of extra work. Having been the only reference person at my last three companies, I’d rather spend the time making sure customers were happy than having to add notches to their files every time they speak to someone. At the same time, because I was the only reference person, I had all this information in my head. I’m not saying it’s not important to keep track of how often you use your customer, because it’s very important so that you don’t overuse them and burn them out. I think that it’s just not important to give value to each type of reference because there are many more ways you can add value to your program.

How do you put value on references? Is a sales reference call worth more than a customer speaking to an analyst or speaking to the media? What if the media is BusinessWeek and considered a top tier publication for you? Would you give the same amount of points to a reference who speaks to a mom and pop shop as one who speaks to a Fortune company you’ve been trying to win for years?

Do this and I’ll give you free training or free products. Larger bonuses such as free training or products generally come from Sales. Have you ever told a sales guy you want to give part of his/her paycheck to the customer for free? Unless Sales suggests the free training or products, I’d stay out of this discussion. (But, do work with your sales people to get it in purchase contracts that the customer will do a press release or case study with you – that generally costs the Sales person nothing.)

There are better incentives than points.

What I have found through my years of running customer reference programs is that customers want to be appreciated. It’s not a matter of sending them shwag with your company logo but they want to know that what they’re doing makes a difference. Let them know they are important by giving the good reference customers access to your executives or product roadmaps or inviting them to special events or simply, sending them a thank you card for helping you out (yes, a thank you card, not an email, an old fashion hand written note!). Letting them have access to your company is much more valuable then having them walk around with a t-shirt with your company logo on it - that’s branding not loyalty.

One of the best experiences I had with a customer was when I wrote a press release and after it got published, my contact’s boss saw it, realized what was being done and how much money was being saved and promoted my contact. How can it get better than that? Not only is my contact happy, getting paid more, being recognized and rewarded for his hard work, but I was a step closer to creating a loyal customer – not just a happy one.

I’ve started reference programs at a few companies now and on my first day I always ask “Can I have a copy or access to the customer database?” The answer, in all the companies, has been “No – we don’t have one!” Can you believe it? Besides the standard support database and possibly an application like Salesforce.com, I have found that most companies don’t have access to a master customer list. This is shocking to me. But, the shock eventually wears off.

How do you go about finding the customers? Talk to people outside of Marketing. I’ve spoken to sales people, sales operations people, customer support, contract owners. Anyone that would have any information on a customer is valuable. Granted, sometimes that information is just a company name but at least it’s a starting point.

It’s not uncommon for me to spend the first week of a new job talking to these folks and then combining lists and lists and lists of customers – all in different formats. Spending a week or so going through 100,000 Excel lines might not seem like the best use of your time, but in the end it’s invaluable.

Although somewhat archaic, I keep my customer list in an Excel spreadsheet. Not ideal, but the companies I have worked at haven’t wanted to invest in the money for tools such as Boulder Logic or haven’t had the budget to do so and for me, Salesforce.com doesn’t have all that I’m looking for. It’s an easy tool to use and sorting generally isn’t a problem. It’s also nice to be able to send new sales guys a list of his/her customers in the area when they start – a little brown nosing goes a long way.

So take the time to find out who knows what in your company. It might be a long process but a customer list that you can work with needs to be created and then updated daily when you find out new information.

There are many different groups within a company that benefit from a Customer Reference Program but generally there are two groups that have the most impact – Sales and Marketing. These are the teams that tend to raise the most amount of noise as it benefits them the most.

On the sales side there are two main reasons for a Customer Reference Program. The lesser of important reasons is to promote customers “like us”. Prospects generally want to speak to a customer who is in the boat as them – same IT budget, same network setup, same employee size, same industry. By giving them customers to speak with who are like them, they can better see the value of your solution.

But, by far the most important reason for a Customer Reference Program from a Sales perspective is to let Sales focus on selling. It’s not always easy finding a customer to fit the need of the prospect and sometimes it takes 5-10 emails and 5 calls – and that’s just for one reference request! Now figure out how much time it takes to do each of those tasks, multiply it by the amount of time it takes to actually find the correct person to send the emails to or make the calls to. That, over the course of a week or quarter or year, can add up to a lot of time. Now, if you were the VP of Sales would you want to be able to hand over that task to someone who is specializing in finding reference or would you want your Sales person to waste valuable selling time looking for customers? (I hope if you’re a VP of Sales that that wasn’t a difficult question.)

Marketing folks tend to like reference programs because it helps to build brand recognition. By announcing customer via press releases or case studies or media opportunities, people start to find out more about your company. And, there’s no better way to promote your company than through third party validation. Me saying that I’m the coolest person I know doesn’t really hold a ton of value. But if Joe Shmoe tells everyone that I’m the coolest person he knows, then there’s more credibility there.

Having a person focus solely on customer references also reduces the chance of a customer being overused. If Sales person 1 and Sales person 4 are using the same customer for a reference call and then the Public Relations team jumps in and asks for a press release and the Field Marketing team asks the customer to speak at a seminar, there’s a good chance that the customer will become tired or irate. It is easily forgotten that you are not the only vendor the customer is working with so you have to be mindful of his/her time.

A centralized Customer Reference Program also allows for the most appropriate customer to be used for the most appropriate opportunity. With one person, or a team, focused on references it’s easier to keep track of the critical details of the customer so that all references given are the best references for that specific opportunity.

At the end of the day, the benefit of a Customer Reference Program is increased brand awareness and sales which then lead to increased profits. Are you sold on it?

Doing a quick search on the Internet for blogs regarding customer references, I noticed that a majority of them ask how to find a reference for a particular software application or some other product. Most of these are from the perspective of the person (generally sales or a consultant) looking for answers for their customer/prospect. Very few of the blogs talk about how to run a Customer Reference Program and how to pull one together from scratch. I’m hoping to help answer some of these issues with this blog.

Types of customer references
When starting your reference program it’s important to realize the many different types of references. Start with basic 101…is this is sales or marketing reference? Although they might seem like they are the same and ultimately will affect one another, they are generally two very different types.

Sales references include:
Customer speaking with a prospect over the phone/email
Prospect wanting to visit a customer to see how the product works
Name dropping in a prospect call/meeting

Marketing references include:
Press release
Case study
Speaking with analysts
Speaking with the media
Website listing
Use of name and/or logo in Marketing material

In general, it’s usually easier to find a Sales reference than a Marketing reference for one basic reason…Sales references are generally not going to be made public. It’s that simple. Marketing references are used for..well, marketing reasons which means letting pretty much the world know that customer XYZ is a customer of vendor XYZ.

Because it’s a public reference, most customers will have to get approval by their Legal and/or Public Relations team if not more people. This extends the approval process and scares some people away as more time and effort is needed.

Rule #1: When using a customer for a public reference such as logo use on a Website or in a press release always get the customers approval at least once before doing so. If a customer has approved a quote and you want to re-use it, that’s generally okay. But for the first time usage, make sure to get approval!