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What ELSE Can Your Customer Reference Program Do?

Posted by Bill Lee on September 20, 2010 at 04:32 PM

From the September issue of our newsletter.

Looking to freshen up your reference program, and improve its impact on the business? The ways in which customer advocates or promoters can improve your business are almost limitless--and go well beyond providing traditonal sales and marketing references.

To stimulate your thinking, here are some of the creative ways I've encountered where reference programs are playing new, important roles that are having substantial impact on business results. These are all REAL examples of things reference programs are actually doing.

- Improve demand generation on the Web.

Intel, for example, credits well-designed testimonial videos and other customer content for an explosion in qualified lead generation from their web sites (a tenfold increase).  Within a few years, the firm expects such efforts to bring in 10% of all its new business. The key to this growth is content from its existing customers.

- Build key-customer executive relationships.

The reference team at a major software firm builds their own relationships with such customers, often bypassing account reps. It is not uncommon for reference managers to introduce account reps to customer executives, rather than vice-versa.

- Provide a superior customer engagement experience that improves retention rates.

SAS Canada credits its integrated customer engagement efforts--which include a combination of reference program, user groups, key account management and communities--with restoring its lagging customer retention rates from 88% to a near perfect 98%.

- Automate customer content generation.

A growing number of firms including Hewlett-Pachard, Hitachi Data Systems, EMC, Symantec and others are making rapid progress in automating creation of highly effective yet relatively inexpensive customer marketing content. And they're getting much of the content from "the other 90%" of customers who don't participate in ordinary reference activities.

- Improve early adapter rates.

A mid-sized enterprise software firm's customer reference program recruits key customer references into product upgrade launches. The result has been substantial improvements to new product adoption.

- Help to launch "solutions selling" efforts

One of the most lucrative and difficult transitions a firm can make is from selling products to mid-level technology users to selling solutions to senior decision-maker buyers. A mid-sized engineering software firm is making this transition and its customer reference program is playing a key role in the process. For example, they are using case study development to uncover the financial impact of products on current customers, extract the competencies needed to achieve such impacts, and then use that knowledge to train the firm's sales people to sell solutions to higher level executive buyers.

- Improve strategy through engagement with executive customers

Engaging with key-customer executives can be particularly lucrative for B2B firms. Studies by the Geehan Group show that firms that specifically target decision makers in customer engagement programs achieve customer retention rates of 90% (vs. 72% for those who don't) and account growth of 12% (vs. 4%).  Most remarkably, customer executives who are so engaged are far more likely to participate in referral activities: 94% vs. 28%.  Reference programs can clearly play a vital role in developing these relationships, as for example, CA Technology's Flagship program does.

- Improve R&D and new product development

By skillfully engaging in strategy discussions with key customer executives on its Executive Advisory Boards, Harris Broadcast was able to generate 50% of its revenue from products developed during a difficult 24-month period when the economy was tanking.

 - Gain greater penetration into existing customer accounts

Reference programs can provide considerable value by getting referrals to other key users of their firm's solutions, developing relationships with them, and encouraging them to join the reference program as well. These sorts of referral relationships don't have to stop with acquiring new references.  Why not uncover new buyers while you're at it?

 These are just a few of the creative ways that customer references and reference programs are helping firms improve performance. What are some creative new ways your reference program might make a major impact on your business? By the way, feel free to share these with me and we'll let the community know.




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