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In Europe, Customers Do the Selling

Posted by Bill Lee on October 27, 2006 at 06:50 AM

We just finished our first Customer Reference Forum Europe, in London on October 23-24. What an engaged, passionate group! As in the states, several of the world's top technology firms sent representatives -- including SAP, Hewlett-Packard, EMC, IBM, Dell, Intel, Microsoft, Business Objects, Lucent Technologies, SAS, Hyperion and other major firms -- thus confirming the growing importance of references to sales and marketing efforts in EMEA.

Takeaways? People left with a lot of specific ideas to implement. I saw pads of paper filled with lists of strategies for tackling tough issues.

Here's what my newest UK buddy and Metia CEO Steve Ellis took from the event.

Here are some highlights and pics.

Here's my take. For comments by participants, please stay tuned and see below.

Get validation.
That sounds like something you’d find on Oprah (and let’s not pooh-pooh the psychological boost one gets from knowing we're not alone in our struggles). But validation is also a powerful tool in getting what you need from senior management. One participant is going to ask her head of sales to require sales people to support the reference program, complete with clear objectives that get reviewed and enforced. And she’ll have more than the usual arguments for this. Now she’ll be able to show that top firms like SAP are doing it. That gives credibility. I can vouch for that, because I know of other reference managers who’ve gotten action after one of our events by telling senior execs that "we should do X" because 1) it makes sense and 2) SAP or HP or Intel or EMC or other respected companies are doing it.

Consider a reference book.
Why not just pick out your leading, most strategic references – based on solid input from sales – and publish it in a book? SAP did it and it became the most popular downloaded item on its entire website.

Engage Net Promoters
If you don't know what Net Promoter Score (NPS) is, learn. NPS is the strategic underpinning for your program. It says, in effect, that the company with the highest percentage of enthusiastic references wins. Your senior executives are likely reading Fred Reichheld's best-selling book on the subject. Research from the London School of Economics verifies Reichheld's thesis in the UK, as Metia's visionary Steve Ellis pointed out. Perhaps the most advanced reference program out there, SAP's, is implementing NPS through its reference program. Learn what NPS is about. Educate your senior executives if they don't already know. Start proposing ways in which your reference program can leverage this concept. You'll be glad you did.

No more throwing it up on a wall and seeing what sticks.
Effective reference programs are well beyond the phase of going for quantity in the number of references they can land and success stories they can write. That’s too expensive and often a waste. The clear emphasis is on quality and getting engaged in the sales process. Which means:

  • Select references who provide a genuine sales and strategic boost.
  • Learn what references activities work best at which point in the sales cycle. Every firm is different, but it’s likely that your sales people don’t close with a success story, for example. Instead they need a live interview or site visit (or at least a recorded reference that answers the prospects questions). That's pretty obvious. As Point of Reference COO Darren Smith points out, advanced programs are digging into the details of what works and when throughout the sales process.
  • Develop training to show your sales people how and where to use references. Don’t assume they know this! And make sure they take the training, by getting sales management to require it.

    Stop begging:)
    OK, that’s a little harsh, but leading reference programs are moving beyond the point of regarding reference activities as a favor you ask of customers. Instead, approach customers as an expert consultative sales person would. You’re learning their needs, and providing value that meets them. Presenting at an event raises their professional profile. Same for getting quoted by the press. Talking to buyers increases their knowledge of what’s going on in their industry.

    Tap the power of internal collaboration.
    Why not use the same consultative sales approach inside your firm? Reference programs have little formal power. But on-point references can provide great value to lots of groups in your company. So sell your program. Communicate its benefits to groups like sales, marketing, professional services, product development. It wouldn't hurt to grab a copy of Neil Rackhams legendary book on consultative sales. And by providing value to other internal groups, they in turn can provide lots of value (including new sources of references) to you.

    Gain control of your program.
    Have too much to do and worry about? You can’t do everything and please everyone, so stop trying. Here’s a couple of ideas for gaining control: (1) Segment your customers. Pick the most strategic and go after them. Ignore the ones who aren’t being used by sales or marketing. (2) Acquire a reference champion and enlist his/ her active support every step of the way. One motivated senior exec who can get things done is worth hours of persuasion and politicking. (3) Pick your targets. Focus on activities that result in highly visible deliverables.

  • The Value of Getting Together with your Peers

    Posted by Bill Lee on October 13, 2006 at 06:37 AM

    When she came to the San Francisco Customer Reference Forum last March, Carol Blumberg was just getting ready to launch Epicor Software’s new, formalized customer reference program. “We had just completed setting up our database infrastructure with IT, as well as the "EPICvalue" Survey that profiles customers joining the reference program. I was at the point of rolling out the program to the Sales Field." But she had several issues that were concerning her and that she didn’t have clear answers to.

    “I knew we were going to get some resistance from sales by mandating their accountability of a more formal process around references,” says Carol. "Another part of this resistance was their sharing with me their good references. Because Sales had kept their good references close to the vest and were not sharing, I knew that I needed to gain their trust. I wasn’t sure how I was going to deal with that. I also wasn’t clear on how to measure the effectiveness of our program or how to report on it.”

    At San Francisco, Carol picked up several ideas that helped her solve these issues.

    Find the Right Champion

    “One of the presenters talked about the importance of finding a champion at an Executive level, a decision maker. That made a lot of sense. The impetus for our program came from both the Executive VP of Worldwide Marketing as well as the EVP of Worldwide Sales. I went right back to them and told them of what I’d learned from other programs in San Francisco, and that for the program to succeed they would need to stay directly involved in supporting it. By understanding the importance of a strong and formal reference program and the potential of greater sales "wins", they immediately supported my proposal and have been strong supporters ever since. Telling them about the experiences of other programs gave credibility and weight to what I told them”

    Focus on Impact on Sales

    A light bulb turned on in San Francisco on the reporting and measurement issue as well. “The key with programs like SAP and Lucent is to focus on a program's impact on sales,” says Carol, which she proceeded to do. “Each quarter, senior management issues a win/loss report. I take the report and, using our database, analyze how many of the wins used some sort of reference activity, such as a sales call or a site visit. When we started out, 16% of wins included reference activity. Now, that figure has more than doubled to 33% and rising. Sales people are increasingly using our references to close deals. That gets attention.”

    Assume Everyone is a Stakeholder

    A third critical insight was to assume that everyone in the company is a stakeholder in the reference program, and to organize stakeholders into a community of interest. “That’s just what I did,” says Carol, who built bridges to other groups at Epicor such as consulting, tech support and product development. “Consulting, for example, had never been involved with references, but now I’m included in their meetings because they know if they recommend a customer where things are going well, I’ll pursue the lead and get the reference. In addition, they’ll refer to our reference database to see whether a customer they’re working with is in the program and make sure to treat them accordingly. It’s a clear win. I get invited to the meetings of these groups and get a steady supply of fresh leads, and then I get recognition for bringing new references into the fold.” A similar story can be told of Carol's "Alert System." "For each customer who joins the Reference program, I add a note to each of the CRM Database records to alert everyone in the company who accesses the database that this company is part of the Reference program. When Tech Support sees these alerts, for example, they know to escalate their issues even quicker!"

    Carol is excited, too, about how the Executive Vice President relies on her to give him the most credible customers to be briefed by Analysts such as Gartner and Forrester. "I love it when the EVP calls me monthly to advise him who I believe our best customers are to do an Analyst Briefing! Very exciting to be closer to the pulse of the company...and the EPIC value reference program has done just that."