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March 2010 Archives

3 Pitfalls to Avoid in Building a Customer Reference Pipeline

Posted by Bill Lee on March 29, 2010 at 08:43 AM

Press Release: Dallas, TX March 29

http://www.expertclick.com/NewsReleaseWire/ReleaseDetails.aspx?ID=31289

Following are some tips--based on programs I've worked with and observed at dozens of firms--on common pitfalls firms fall into when building their pipeline of customer references. Plus some guidance on how to avoid them. 

Build a reference pipeline divorced from company strategy 

Tasked with building a pipeline of customer references, reference managers often look to the following customer groups for references: 

•    Your biggest revenue customers 

•    "Marquee" customers 

•    Customers nominated by sales, account management teams, service teams, etc.—people who deal with customers on a regular basis. 

•    Customers nominated by senior executives 

•    Members of your customer advisory boards or customer councils 

•    Customers who participate in online communities or forums 

Some or all of these groups may well provide fertile fields for harvesting customer references, but without strategic guidance and careful vetting process, they might also create land mines. 

For example, your biggest revenue customers may be exasperated with your offerings and looking desperately for ways to replace you. They may also be in markets your firm is strategically moving away from. Sales people who suggest their own clients as references stop checking in once the sale is closed—and may be sending you customers who've become disenchanted. Customer's reference candidates suggested by executives may simply reflect the personal relationship they have with the customer executive rather than any compelling story about your services. Even services teams can sometimes be the last to know of problems with a customer relationship. And even happy customers may not be strategic customers who can provide meaningful recommendations to buyers in the markets you're currently pursuing 

For such reasons, companies often think they know who their references are, but in fact are wrong. Even customers who are currently in your customer reference program may actually turn out to be poor references. 

Key Lesson: Any of those sources can be good for finding references. But always start with your firm's strategy. What are the key markets and key segments we're focusing on now, and will the proposed reference help us gain attention there and close deals? 

Leave performance out of the discussion 

One of the things I've seen way too often are conversations about "how can we get more customer references?" that don't include providing great products and services in the first place. Such conversations happen all the time. Some firms get caught up in whether they have the right legal agreements, or the right approach to inviting the customer into a reference program, or whether they're offering the right incentives. "Should we give nice gifts?" they'll ask. "Should we provide training or service discounts?" 

Such things can have their place at times, but they must not be the basis for a reference relationship. The basis must be grounded in one thing: providing superior performance. It's the only ethical basis for referencing. It's the only basis that will get you the enthusiastic referrals and promotions—the sheer excitement—you're looking for. And, if you build your reference program on the rock of performance (rather than the sand of incentives), it will act as a highly effective mechanism to continue improving your performance. 

What's not to like? 

Assume love lasts forever 

Another mistake some companies make is losing sight of how happy their references are with them. Just because they loved you a year ago doesn't mean they do now. The COO of a once fast growing technology firm whose growth had seriously stalled in the 2009 recession confided to me that the Board had directed him and other executives to ask key customers to provide references for the firm. None—none—would agree to do so. 

Companies with vibrant reference programs build strong relationships with key customers that include a lot of two-way conversation, and a regular formal process to review performance, correct problems, and stay current with the issues these customers are concerned with.  

Making Reality as Exciting as Games

Posted by Bill Lee on March 25, 2010 at 04:38 PM

Expand your thinking by checking out this clip from a presentation at the TED Conference earlier this year by a celebrated computer game designer and Cal Berkeley PhD, Jane McGoniga. Her presentation is called: Gaming Can Make a Better World.

She's researched why online game players are so absorbed and driven to excel at the games they play--and more intriguingly, how to re-create such an environment in the real world (that' a switch!).

Check it out

Key factors are:

- Epic Meaning: the most successful online games present a larger meaning as the ultimate goal. It's not about accumulating the most points, but "saving the world."

- Urgent optimism: create or join an environment that has a healthy degree of competition, and at which you have a reasonable chance to succeed. 

- Tighter bonds: gaming environments build trust with people we've competed with or even against--both of which build tight social bonds.

- Blissful productivity: people are happiest when immersed in meaningful work






Using Live Events To Turn Customer References Into Sales People

Posted by Bill Lee on March 22, 2010 at 04:35 PM

PRESS RELEASE, MARCH 22. DALLAS, TX

The rapid growth of social networking is making it not only more essential, but also easier, to engage with your customers--as well as have them engage with your prospects and markets. But there's nothing like face-to-face interaction at live meetings and events. Combine those two is key to creating powerful customer communities. 

Today we'll focus on the in person, up-close-and-personal interactions, with a case study. Here's how a global software firm turned it's international customer conference into a high-powered sales machine. The numbers bear this out. For years, sales resulting directly from standard pre-arranged meetings between sales people and prospects at the annual conference covered barely a fraction of the cost of the event. 

Then they tried a new approach: at its next conference, the firm arranged for its customer references to meet with prospects. Sales influenced by those meetings covered 100% of the event costs within the first month after the event. 

Here's some lessons learned from the firm's new approach: 

Read more >>

Fortune’s Myopic “Most Admired” List: Where are the Customers?

Posted by Bill Lee on March 15, 2010 at 07:09 PM

Quick question: What’s wrong with this list of criteria Fortune Magazine uses for determining its vaunted list of the world’s Most Admired Companies?

http://bit.ly/aibA5Z

1. Innovation

2. People management 

3. Use of assets

4. Social responsibility 

5. Management quality

6. Financial soundness 

7. Long-term investment

8. Product quality

9. Global competitiveness

First, it's remakably inward looking. Only two of the criteria deal with external impact (social responsiblity and global competitiveness). And none—zero—deal with customers. Remarkably, Fortune pays no attention at all to how much—or even whether--its Most Admired firms are admired by their customers, an amazing omission. (Fortune surveys only peer company executives who rate competitors within their industries to determine its Most Admired lists.)

Neither does Fortune look at how willing its Most Admired’s customers are to provide references, how passionately their customers promote or spread positive word of mouth, how skillfully these firms engage in customer co-design efforts or customer co-marketing. Nothing about how well companies engage customers in increasingly critical social media efforts whose success depends, increasingly, on getting customers into the online conversations about them. Nothing about how well these firms develop the most important of all their assets: their customers.

So here’s my question for Fortune and it’s survey partners, the Hay Group: which group can do more for your firm, your competitors or your customers? And therefore, whose admiration would you rather have? 

Tips for Implementing Significant Changes to your Reference Program

Posted by Bill Lee on March 15, 2010 at 05:51 AM

Reference programs are changing rapidly. The internet and social media in particular are changing the landscape, and opening up both big risks and big opportunities for your firm's sales and marketing efforts. How can you make the changes your reference program needs to stay abreast? Here are some tips to think about:

1. Avoid the strategic vs. tactical pitfall.
Start by taking your list of things you want to change and asking, which of these are strategic and which are tactical? Strategic items are the "what" you want to accomplish, tactical items are the "how" you'll get to the what. For example, "our team needs to build better and closer relationships with our references is strategic" On the other hand, "we need to host more face-to-face events for our references" is tactical. One of the best ways to derail a change initiative is to mix those two up. Start with getting clarity on the strategic items you want to implement. Then put together a tactical plan.

2. Put your strategic items to the test.
Just because you think they're great ideas, doesn't mean your boss or key stakeholders will. You'll need to open or re-open dialogue with them on your program's strategic goals, and the best place to start is by getting clear on what their goals are, first.

3. Work with your boss to identify key stakeholders to enlist.
They might include the head of global sales, your head of demand generation, social media programs, PR, AR, and/ or product marketing. Who can likely most benefit from new tools, processes, ideas in reference management that you've learned about?

4. Don't ask stakeholders what they want from your program.
Well, you can ask the question and you might get lucky with a specific and well thought out answer. But be prepared for a blank look or a very general and unhelpful answer. In any case, don't start the conversation with "we have this great new idea for our reference program that I want to tell you about." Trust me, it will get you nowhere. You have to prepare the ground first.

5. Do ask stakeholders what their priorities are.
For example, if one of your key stakeholders is the SVP of Global Sales, you need to get clarity on what her primary goals are--what she wakes up thinking about every day--that your reference program can have an impact on. This isn't as easy as it sounds, by the way. Once you're as clear as possible on her goals and those of other key stakeholders, then it makes sense to put together a first draft of your program's new strategic goals, to make sure they support those of your stakeholders.

6. Don't bite off more than you can chew.
Before finalizing on new strategic goals
to pursue, prioritize. Which will make the biggest impact, quickly, and with a clear impact on objectives that are important to your key stakeholders and to the business. Start with just one or two of these. As uber strategy consultant Alan Weiss says, don't move a hundred things an inch, move 2 or 3 things a mile.

7. Now you're ready for tactics, the "how's," to get you there.
And a critical part of this discussion should be "what things can we stop doing?" For many of you, it will be important to get away from "butler" services for your sales and marketing people--that is, taking phone calls and chasing down references for them at the last minute. It's time wasting, inefficient, and not the best and highest use of your talents.

2010 Customer Reference Forum: Top Takeaways

Posted by Bill Lee on March 8, 2010 at 03:44 PM

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 important.

- McKinsey study: 60% of buying decision comes from information not provided by the company—which makes information shared by your customers critical.

- 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 ignore.

- 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?

Customer Communities

- 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 structured.

- 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 self-interest.

- 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 tribe??

-- -- 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

- 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 obtained.

- 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.

 

Oracle's Julie Tung Knocks it Out of the Park

Posted by Bill Lee on March 3, 2010 at 09:36 AM

Day 1 at the 2010 Customer Reference Forum (#2010CRF): During her presentation, Oracle VP of Global Customer Programs Julie Tung brought a combination of excitement and common sense to the issue of building a dynamic customer reference program. And the challenges she and her team face are considerable, making their achievement all the more impressive: 60 acquisitions in recent years, and some 9,000 products the firm now offers.

First, the common sense. Oracle has transformed its customer reference program to a customer focus, changing the approach from "we need references" to "we need happy customers, and the references, referrals, word of mouth, etc will take care of themselves.

The key to happy customers? Listen, Respond, Collaborate. Pretty basic stuff, but anyone working in an organization of any complexity knows this is not easy. You have to form a closed loop cycle by either bringing the relevant stakeholders under the a single powerful executive, or form them into a working virtual team.

 A very powerful tool for creating happy customers and the referrals that go with them is to build close relationships with customer executives. Oracle is doing this by identifying a target set of customers, finding out who their executives are, and starting to build relationships between them and Oracle executives. If sales has relationships with executives, they'll enlist their help. If not, they'll devise other approaches. Approached in the right way, with the right relationship, customer executives want to have such relationships with suppliers and vendors.