Reference Point

Just got back from an intense 2+ days at our Spring 2007 Forum in Berkeley (with a bit of a detour to southern CA for a little beach time).

Below are some of my more optimistic takeaways from the Forum. Also, here are Jeremiah’s. And here are Steve Ellis’s (on our keynoter Ben McConnell, his red shoes, and "scary" Jeremiah) – three of the most perceptive people I know in and around this space. Jeremiah's presentation on social media and customer references was both scary, as Steve notes, but also filled with opportunities.

1. An strong spirit of collaboration.
We had directors and mangers from HP, Dell and IBM, EMC and Network Appliance, Microsoft, Oracle and SAP – presenting, collaborating in small group discussions and sharing information. Obviously a line has to be drawn – presenters were careful not to disclose proprietary or strategic information. But very few attendees, as far as I can tell, refuse to disclose anything because competitors are in the room. Software engineers form communities to collaborate and exchange ideas. CIOs do it. Doctors from competing hospitals do it. So do lawyers, accountants and other professions. And so, it now seems, do customer reference professionals. It will be good for the profession, and good for the companies who send these professionals.

2. A strong sense of strategy and business results
I observed very few people who are mired in the nitty gritty of tactical activities. They understand how what they do ties to strategic goals and business results. HP’s Billie Abrams is not in the business of churning out x number of case studies. She focuses instead on how to put reference information into a format that prospects will read and respond to when it’s time to buy. Amdocs’ Stef Porter doesn’t present references with a laundry list of activities to check off, or not. She and her team have become expert at building long-term relationships based on providing value. That helps customer loyalty. NetApp’s Holley Garmany is developing a “closed-loop” system to ensure that valuable and often unexpected customer intelligence – which reference managers are in a unique position to gather – is fed back into NetApp sales and marketing, resulting in upsales and cross sales. EMC’s Terri McClure and a workshop full of other practitioners are figuring out how to segment customer references strategically, so that they can marshal their resources and efforts where they will have the biggest businesses impact. And on it went for two days in Berkeley.

3. Steady growth of the profession.
We had about 125 reference professionals in one place for two full days this week. The most we’d had before was about 110.

Of those, 95 were practitioners (the rest were sponsors and vendors). The most practitioners we’d ever had before were 76.

Among the firms who have sent numerous attendees numerous times, you can count most of the major global technology firms, including HP, SAP, Microsoft, Oracle, Intel, Dell, IBM, EMC, SAS, Sun Microsystems, EDS and many others.

We also attracted substantial newcomers. Among the companies who sent reference managers to our event for the first time, we had A&R Edelman, ADP, BEA, BMC Software, Callidus Software, Entrust, Extreme Networks, Infor, Juniper Networks, Nortel, Open Text Corp., Postini, Inc., Rackspace Managed Hosting, Riverbed Technology, Siemens (first event in the US), Teradata and Tripwire.

This profession thus appears to be growing not spectacularly (word-of-mouth and social media events are growing far more rapidly), but steadily. The profession of reference management, as an integral part of customer programs, has the feel of steady, unspectacular-but-strong long-term growth.

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Stephanie Porter is the Director, Customer Programs at Amdocs. What's interesting about Stef is that she has a considerable background in sales and sales management, as do the members of her team. She brings that sensibility -- consultative sales -- to her reference program, and it makes a big difference in Amdoc's ability to recruit customer references. I'm happy to say that Stef will be presenting at our upcoming Spring 2007 Customer Reference Forum. Here, she shares some thoughts on how to acquire and keep references.

Q. Why do you suppose so many reference programs have trouble convincing customers to join?

A. In most cases, there’s not enough in it to be worth the customer’s effort. Having a strong value proposition is critical. Sometimes there’s an issue with joining an official program with rules and commitments – so don’t make it complex.

Q. How has your -- and your team's - background in sales, helped you with
customer reference recruitment?

A. In sales, the goal is to find a win/win situation, and it’s still all about relationships. We take that philosophy into recruiting references. We identify who we want to go after and understand their needs, put a proposal together that meets those needs – and ours – and off we go. We don’t try to fit our reference partners into a mass-market program.

Q. The big push today is to sign up "top-tier" customer references (typically, Fortune 100 firms with global brands who are traditionally reluctant to reference). How are you making headway in this area?

A. With a few exceptions, all the clients in our program would be considered “top tier”. While these may be harder to get at first, they are also worth the additional effort for many reasons. Again, the key is determining the right value proposition for them, both on an individual and corporate level. I’ll explain more on this at the conference.

Q. Some reference managers would blanch at the thought of taking a more sales-oriented approach to reference recruitment. Is it true that selling means cold calls, applying pressure, and engaging in constant spin?:) Or is that just Hollywood's version (Glengarry Glen Ross, for example) of what
sales is all about?

A. While selling can mean cold calls and such, references are customers – people we know. If we, or the account team, don’t know them, they shouldn’t be targeted as a reference until we do. It still requires basic sales 101:

- Do your homework to determine who you want to target.
- Learn what is important to them and understand their needs in this area.
- Get an understanding of what they can and cannot do.
- Develop a value proposition unique to their specific needs and discuss it with them.
- Confirm that it meets their needs and adjust as needed.

It is certainly more work than simply saying “here’s our program, do you want to join it”, but the rewards we get from our high-impact references are worth every bit of effort we put into this. Applying pressure and engaging in constant spin? Absolutely not. A client backed into a corner isn’t going to give a good reference so why go there? Further, we want our reference partners to understand what is involved since the overall reference experience depends on setting expectations and, ideally, exceeding them. We cannot afford to recruit clients into the program who are “oversold”. It would kill the credibility and trust that we work so hard to build.

Q. A couple of years ago, CIO magazine ran a story -- that is still widely
cited -- which was critical of rewarding customers for participating in reference programs. How do you feel about rewarding customers? Where do you draw the line between appropriate rewards and inappropriate?

A. First and foremost, never include product or services discounts – to me, those seems like a bribe. We also don’t get the account teams involved with making requests (once we’ve earned the right to manage the reference relationship ourselves), as that is when inappropriate and quid pro quo requests often occur. We never use the term “reward” – we show appreciation instead. Yes, it’s a euphemism to a degree, but there is a difference between the two. We try to focus on things that are of value to the reference partner that they could not otherwise get. This is unique for each of our high-impact references and might include involvement in an advisory board or focus group, networking events that are social and/or project-related, employee recognition assistance, personal exposure, marketing their projects internally, the helping to reach additional areas with their corporate messaging. We shy away from gifts or anything that might conflict with a company’s ethical guidelines, and we would never want a customer to be less than truthful.

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Since 2001, Ben McConnell has been researching the effects of word of mouth on customer loyalty. Forbes calls his work (along with partner Jackie Huba) in this field "the word of mouth gospel." In his newest book, Citizen Marketers, Ben and Jackie examine the social media explosion: the ever-growing communities of enthusiasts and evangelists using videos, photos, and animations, as well as the "user-generated media" of blogs, online bulletin boards, and podcasts.

And I'm happy to say that Ben will be keynoting at our Spring 2007 Customer Reference Forum on April 24. Here, he takes a few minutes to talk about the implications of citizen marketing for customer reference managers.

Q: The phenomenon of Citizen Marketers has sparked a number of great stories in the consumer and small business world -- as the little guy takes on and sometimes wins against the giant corporation. Where do you see the trend going in the stodgier world of B2B business?

A: The examples in the B2C world often involve customers taking the reins of participation and leading the way for others like themselves to get involved with a company or its products. They create pathways for conversations, which lead to alleys of influence and ultimately, the doorbells of
referrals. For people in the B2B world, the burgeoning world of social media -- participatory media -- can be a rich source of conversations between customer and company, customer and other customers, and customer and prospects. Social media also expose companies to the influence of customers'
opinions. Then it's a two-way street. Better be prepared for the traffic.

Q: If you're a marketing manager in a high tech firm, how would you map out
a strategy to find and engage the citizen marketers relevant to your firm?

A: First, build a listening strategy. That may be a big step for companies used to dictating the rules. Understand what's being said on blogs, forums and social media sites and by whom. Rank the opinion leaders and their ability to lead conversations. After that, decide whether your engagement strategy will be out in the open or more reserved like shuttle diplomacy. The answer probably depends on the size of the company, the number of prospects involved and the company's culture. About the only rule to engaging the citizen marketers is: Each one is different. Treat them like
guests in your home.

Q: If you're a customer reference manager (our group), should you try to
encourage your most enthusiastic references -- what Fred Reichheld calls
"promoters" -- to engage in some citizen marketing on your behalf?

A: Yes, but it's important to observe what's already being created in the marketplace by everyday citizens about your company, product or sector and build on top of that. By keeping close tabs on existing "creation trends" within your sector, you'll avoid the mistake of trying to push citizen
marketers down a contrived path that's unfamiliar to them.

Q: How do we marketers avoid the tendency we all have -- to control the
conversation?

A: By now, every marketer in the world has probably heard the admonition to
"give up control!" It's a scold, and it creates a natural resistance. I think the better frame to use is: "Create more ownership." Give the early adopters and the content creators -- the one percenters -- the keys and
tools to take ownership of your company, product or brand. The nature of their emotional investment increases their long-term commitment. A housing analogy works pretty well here: In your neighborhood, would you rather have your neighbors be renters or owners?

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