Few other areas of marketing are evoloving more quickly
than customer reference programs. Here, in no particular order, are some of my takaways
from the last week’s 2010 Customer
Reference Forum. These will provide a good gauge to see if you’re program is
keeping up. These are based on presentations at the Forum, led by keynoters Julie Tung, VP of Global Customer Programs at Oracle, and Laura Brooks, Vice President, Research and Business Consulting, Satmetrix, along with case studies from top reference programs at Intel, Hewlett-Packard, Lexmark International, Red Hat, Adobe Inc, Cisco WebEx, together with some compelling researcg from Forrester Research, Eccolo Meda and Beeline Labs.
- The collapse of the sales funnel: Customers are
engaging with firms later and later in the sales cycle. Before they ever engage
with you, they’re getting information from other outside sources. This makes
participation by your customer references in these outside conversations more
- McKinsey study: 60% of buying decision comes from
information not provided by the company—which makes information shared by your
- The question isn’t “how do we get more references?” The
question is, “how do we get more happy customers?” If you’re organized around
the first question, you’re on the wrong track. If you’re organized around the
second question, then references, positive word of mouth, referrals, etc. will
all take care of themselves.
- If you can go through a reference story or case study,
cross out your company’s name and replace it with your competitor’s and it’s
still true—then throw the story out.
- If your reference program—or at least some program at
your firm—isn’t building a vibrant community of customer executives, then
you’re falling behind. There is too much evidence of their impact on
profitability, and too many examples of companies successfully doing so, to
- How to do build communities of customer executive: identify a target set of customers. Find
out who their executive-decision makers are. Approach them executive to
executive. No need to rely on the account manger for this unless he or she
already has that relationship. (Notice this changes you’re value proposition to
sales for the better.)
- One key to changing how your company organizes around
customers: “customer focus lifecycle.” This means a closed loop process that
includes all three of these: Listen to customers. Respond to customers.
Collaborate with customers. Most firms listen, but don’t respond. Or respond
but don’t really collaborate. Do all three, and you’re ahead of the game.
- Another key: unify these three things by either
bringing them under a single executive, or under a virtual team of the key
players needed to make the process work.
- A big step to take in getting ahead in the race to build a high value reference program quickly: Stop playing a “butler”
role in fulfilling reference requests from sales and marketing. Move to some combination of
a self-service platform or outsourcing to a low-labor cost region. Then deploy your reference managers in relationship building.
- The evidence that customer references impact key
indicators including revenue and profit is growing—and I’m talking about
evidence that will persuade CFO’s. At many firms, across many industries,
Satmetrix has found strong correlation between increasing your percentage of
customers who are promoters (or
“enthusiastic references”) and financial performance.
- Satmetrix is also developing research on “networked
promoters”—those promoters who are particularly well connected to let a broad,
influential network of contacts know about you. It’s worthwhile thinking
through, how do you find these customers, whom do they know, and how do you
connect with them?
- It goes without saying. Reference must play a big role in your community efforts.
- Another thing that goes without saying. it’s very difficult to attempt
to build a community on your own site and expect customers to come. The best
community builders, such as Intel, IBM and Xerox, use a combination of their
own platform mixed with outside community participation.
- And when building a community on your own site, the most
successful firms give customers as much freedom as possible: IBM allows
community members to build their own platform, for example.
- To build or successfully participate in B2B business
communities, understanding "Human 1.0" (our long established traits)
is much more important than understanding Social media 2.0.
- Vibrant customer communities contain a mix of virtual and
face-to-face interaction. Let “Human 1.0” guide how these communities are
- For example: practice reciprocity. Create a social framework for
evaluating community interactions and issues, rather than a market framework.
Appeal to people’s sense of fairness and altruism, not just their narrow
- Successful companies thin differently about communities
-- --Think tribe, not market segment: find people who have
something in common based on their behavior, not their market characteristics.
So it may not work to create a community of reference customers: are they a
-- -- Think knowledge network, not information channel
(customers provide knowledge to each other, your marketing dept provides info).
-- -- Think customer centricity, not company-centricity
-- -- Think emergent messiness, not hierarchical fixed
processes. People want to see responses to their requests fast, even if it
doesn’t fit your company goals.
- For example, scissors companies usually form communities around
scissors. Fiskars had a better idea: form a community around scrapbookers.
- Content is critical to communities. People are better at
responding/ reacting than they are at generating it.
- When it comes to getting a community and social media
strategy for customer references to engage in, don’t start with in-depth study
of all the social media tools out there. Start with a vision and a clear
strategy of how to get there. This will keep you focused—and you’ll need that.
You have to know what to say “no” to.
- As you develop a community strategy, think of what you
can let go of. HP is using biomimicry to help them think anew about how to make
community efforts that will strongly appeal to people
- When a group such as product marketing says they want a
customer community, they must provide a manager who’ll monitor it and provide
content. Send the message, “community, done well, can create many benefits for
us. But less work isn’t one of them!”
- Getting communities to work requires teaching people to
change habits. No more email for example—community communications should be
redirected through the community platform.
- Customer reference content can provide a treasure trove
of content for your community sites—provided it’s relevant and “repurposed” in
a way that meets the informational needs of members. Every company will have
communities with their own unique needs, so figure on spending time to figure
these out. Some will prefer short videos. Others may want podcasts (some of the
Forum attendees felt that enterprise customers preferred videos while SMB
customers preferred the podcasts).
- Video is now the second most influential collateral type
among technology buyers.
- Between 2008 and 2009, there was a 75% increase in the
use of video by prospects considering a technology purchase.
- Also, videos are substantially more effective at getting
high SEO page rankings on Google.
- Video also improves retention: people who can both see
and hear information retain 70%, versus 30% for those who just see and 20% for
those who just hear.
- Videos are downloaded far more often than written case
studies, and are more cost effective on a per download basis.
- “Flip” HD camcorders can provide an exceptionally cost
effective way to get video testimonials from customers. (Some firms actually
send Flips to their customers and let them keep them after the recording). It’s
important to think through, of course, when the Flip recording is appropriate
and when a higher production quality is needed.
Tips on expanding a reference program globally
- Think carefully about who is best person to lead a global
effort. (hint: this person’s interests must be strongly aligned with success of
the overall global program.)
- Think through how executive sponsorship can best be
- Think through who has the best skill set to document
processes and establish guidelines globally.
- Determine which geos are “ready” for globalization. Not
all will be ready at the same time. Staggering the roll out is OK.
- Understand and respond to the priorities of the various
regions (and they will be different).
- Establish a common language quickly (different geo’s will
have different definition of case study vs. success story, private reference
vs. public reference, etc.
- Do an extensive review of your RMS (reference management
system) and what it will need to make the rollout successful. Examples include
labeling changes, language capabilities, CRM system integration, etc. Single
sign on is important also.