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December 2012 Archives

Customer Reference Programs and New Marketing, Part 1

Posted by Bill Lee on December 19, 2012 at 02:27 PM
First of a two-part series (stay tuned for Part 2)

Evidence is growing—and drawing more and more attention from the C-suite—that marketing is dramatically changing. It's critical for customer reference programs to keep up with this. 

We're assembling a battery of initiatives this year and next to make sure you do so. This two-part newsletter series is one. Others include:   How Marketing is Changing—And Why Customer Advocacy Will Be At the Center of It

For now, let's take a look at the most influential research that's out there on New Marketing, and its implications for reference and advocacy programs. Following is a collection from Gallup, Nielson, McKinsey and others showing this. You can use this—in your internal communications, in PPT decks and other communications with stakeholders and senior leadership at your firm—to make the following point:  we know a great deal how New Marketing will look, because it's already here. (I'm making this case myself to audiences ranging from the AMA, Forrester's Tech Marketing Council, Satmetrix, the International Association of Advertisers, and others).

Marketing's new focus can be summed up succinctly: "The way buyer's purchase has changed dramatically. We need to stop trying to persuade buyers to purchase. Instead we need to  get our customers to persuade them for us." It's not  just about bringing customer references into traditional sales and marketing processes—it's about increasingly replacing those processes with customer advocacy. 

The Research   

Let's look at key research indicating this change. First, CEOs are increasingly disenchanted with traditional marketing-as evidenced by their disenchantment with their CMOs. In a pair of studies by the Fournaisse Group in London (here and here), over 70% of CEOs believe CMOs lack business credibility, can't explain how they'll grow the business, and can't link their efforts to recognized financial metrics. 

Of course, what matters most is how your CEO views your firm's marketing efforts. If he or she is one of those 70%+, then it's time for a different approach. You can help guide this conversation by showing what New Marketing looks like. 

Studies by McKinsey, Sirius Decisions and the Corporate Executive Board have uncovered profound changes in the "buyer's decision journey." Key finding: buyers increasingly rely on sources other than corporations to gather information and make purchase decisions about products and services. This doesn't mean that traditional advertising or marketing will entirely disappear - but it's safe to say they're not driving growth like they once did. 

Who might those new sources be? Primarily, the buyer's peers. 

Implication: Your company has exactly one set of resources that are peers of your buyers: your customers, of course. And they should be the ones doing your marketing and sales for you, according to studies from some of the top research firms in the world.

For example:

Nielson: 
The source most trusted by consumers when it comes to advertising is, "recommendations from people I know." (92% of respondents named this source). Ads in magazines were about half as trusted. Ads on social media sites, even less so. (2012 Trust in Advertising Report)

McKinsey:
A recommendation from a trusted friend conveying a relevant message is up to 50 times more likely to trigger a purchase than is a low-impact recommendation. ("A new way to measure word-of-mouth marketing," McKinsey Quarterly, April 2010)

Gallup:
Your best bet to acquire new customers through social media is to engage your existing customers, then align your strategy with the wants and needs that encourage [existing customers] to engage their social networks on your behalf. (Making the Most of Social Media, 2011)

Sirius Decisions:
Senior leaders ...consider information from peers ...an important resource at every stage of buying. (Sirius Decisions Blog, June 29, 2012) (summarizing Sirius Decisions' research on the topic)

Implications for Customer Reference Programs  

The research—as well as actual company case studies I'll describe in the next issue of Reference Point—is pointing to an increasingly expanded role for customer advocates. Key elements of this new role include: identifying your top advocates (sometimes called Rockstars, MVPs, Customer Champions)—the ones who can dramatically increase revenues and profits; rolling them in to customer communities; helping them build their social capital (which is often much more effective than rewards, points, discounts and the like); and getting advocates increasingly involved in a broader array of solutions for your marketing, sales and even product development efforts. I'll expand on these in the next issue.

Why Customer Reference Programs Are (or Should Be) Critical to Customer Advocacy

Posted by Bill Lee on December 10, 2012 at 08:55 AM

Customer reference programs can play a critical role in customer advocacy marketing. That’s because reference managers are most skilled at 1) building relationships with customer advocates, 2) understanding and communicating the value such customers receive from your firm, and 3) cultivating the very best, or ‘rock star,’ customer advocates. Our research has identified several critical factors that set successful customer reference programs apart from the also-rans. These include: 

 Expand your horizons. Despite their huge potential, many customer reference programs run the risk of irrelevance when they subsume references into traditional marketing efforts—such as being just a concierge service for salespeople looking to close deals. Today’s savvy firms—like those of the three presenters announced today—position their reference programs at the center of all customer advocacy efforts, such as co-marketing, customer communities, advisory boards and forums, MVP programs and social media programs. Customer advocacy is where the most dynamic innovation and impact are in marketing today.

Make the business case. Customer advocacy trumps traditional marketing in terms of the measurable impact that customer references and advocacy can make on sales efficiency, referral business, lead generation, market awareness, brand building—indeed, on your entire growth engine. 

Build your program around customer preferences, not marketing directives. Reference programs that approach customers only when they need a reference create one thing: reference burnout. It’s a symptom of allowing marketing objectives to guide reference relationships. Smart reference managers build a powerful reference value proposition around customers’ desire—which can be huge—to tout their mutual success with you, often in a wide variety of ways.  

Disrupt. Customer reference and advocacy efforts are the most innovative areas in marketing and sales today—indeed, they’re reinventing these processes. Embracing this requires smart, passionate and forceful senior executive support. Reference managers who have this thrive.  

Always be selling - both internally and to potential new customer references. Internal stakeholders like marketing, sales and social media—who are often bogged down in traditional marketing thinking—need reminding of the powerful impact customer advocates have on sales, lead generation and market awareness. Potential customers need reminding of the tremendous mutual value they can gain from co-marketing.

Create high-value data. Reference managers learn exceptionally valuable things about customers that is otherwise lost, such as how customers actually use a product or service, and what value they actually get from it (both of which are invariably different from what R&D or sales expect). Smart reference managers capture such high-value knowledge and make sure it’s acted upon.  

Update on the 2013 Summit

Posted by Bill Lee on December 7, 2012 at 08:55 AM

We've just added three new breakout presentations at the 2013 Summit on Customer Engagement (March 5-6, Redwood City, CA). Pretty exciting stuff. Notive the level of executives who are participating.

Participants who register now can ensure a spot with a limited-time $200 discount.

 The new presentations include:

 Creating Apple-Like Customer References and Advocates by Rob Meinhardt, Founder and CEO, KACE (acquired by Dell)

 Aligning Customer Reference Programs with Corporate Strategy by Abby Atkinson, Senior Director, Infor Ambassador Reference Program, Infor

 Measuring—and Increasing—the Full Value of Brand Advocate Programs by Deena Zenyk, Marketing Manager, Customer Advocacy Programs, SMART Technologies 

As a reminder, keynoters at the 2013 Summit include: 

  • Chuck Ball, Senior Vice President of Health Systems, AmerisourceBergen
  • Sean Geehan, Author, The B2B Executive Playbook
  • Lisa Arthur, Chief Marketing Officer, Aprimo, and
  • Katharyn White, Vice President, Marketing, IBM Global Business Services

 


Customer Reference Programs and New Marketing

Posted by Bill Lee on December 5, 2012 at 05:05 PM

From Reference Point (our Newsletter)

First of a two-part series

 Evidence is growing--and drawing more and more attention from the C-suite--that marketing is dramatically changing. It's critical for customer reference programs to keep up with this. 

We're assembling a battery of initiatives this year and next to make sure you do so. This two-part newsletter series is one. Others include:

- Presentations & workshops at the 2013  Summit.

- The Master Class Series on Customer Reference Programs.

- Exciting research we're doing with Sirius Decision and the CMO Council (stay tuned). 

- My book, The Hidden Wealth of Customers and articles I'm publishing on HBR's Blog Network.

Two of the most popular are:

Customer Reference Programs At the Tipping Point (Read why reference programs are becoming increasingly important. Share with your sr. leaders.)

Marketing is Dead ("Marketing is Dead" haa profoundly impacted how our marketing leadership views the work I do." Deena Zenyk, Marketing Manager, Customer Advocacy Programs, SMART Technologies)

How Marketing is Changing--And Why Customer Advocacy Will Be At the Center of It

 For now, let's take a look at the most influential research that's out there on New Marketing, and its implications for reference and advocacy programs. Following is a collection from Gallup, Nielson, McKinsey and others showing this. You can use this--in your internal communications, in PPT decks and other communications with stakeholders and senior leadership at your firm--to make the following point:  we know a great deal how New Marketing will look, because it's already here. (I'm making this case myself to audiences ranging from the AMA, Forrester's Tech Marketing Council, Satmetrix, the International Association of Advertisers, and others).

 Marketing's new focus can be summed up succinctly: "The way buyer's purchase has changed dramatically. We need to stop trying to persuade buyers to purchase. Instead we need to  get our customers to persuade them for us." It's not  just about bringing customer references into traditional sales and marketing processes--it's about increasingly replacing those processes with customer advocacy. 

The Research 

Let's look at key research indicating this change. First, CEOs are increasingly disenchanted with traditional marketing-as evidenced by their disenchantment with their CMOs. In a pair of studies by the Fournaisse Group in London (here and here), over 70% of CEOs believe CMOs lack business credibility, can't explain how they'll grow the business, and can't link their efforts to recognized financial metrics. 

 Of course, what matters most is how your CEO views your firm's marketing efforts. If he or she is one of those 70%+, then it's time for a different approach. You can help guide this conversation by showing what New Marketing looks like. 

Studies by McKinsey, Sirius Decisions and the Corporate Executive Board have uncovered profound changes in the "buyer's decision journey." Key finding: buyers increasingly rely on sources other than corporations to gather information and make purchase decisions about products and services. This doesn't mean that traditional advertising or marketing will entirely disappear - but it's safe to say they're not driving growth like they once did. 

 Who might those new sources be? Primarily, the buyer's peers. 

Implication: Your company has exactly one set of resources that are peers of your buyers: your customers, of course. And they should be the ones doing your marketing and sales for you, according to studies from some of the top research firms in the world.

For example:

Nielson: The source most trusted by consumers when it comes to advertising is, "recommendations from people I know." (92% of respondents named this source). Ads in magazines were about half as trusted. Ads on social media sites, even less so. (2012 Trust in Advertising Report)

McKinsey: A recommendation from a trusted friend conveying a relevant message is up to 50 times more likely to trigger a purchase than is a low-impact recommendation. ("A new way to measure word-of-mouth marketing," McKinsey Quarterly, April 2010)

Gallup: Your best bet to acquire new customers through social media is to engage your existing customers, then align your strategy with the wants and needs that encourage [existing customers] to engage their social networks on your behalf. (Making the Most of Social Media, 2011)

Sirius Decisions: Senior leaders ...consider information from peers ...an important resource at every stage of buying. (Sirius Decisions Blog, June 29, 2012) (summarizing Sirius Decisions' research on the topic)

Implications for Customer Reference Programs  

The research--as well as actual company case studies I'll describe in the next issue of Reference Point (which will be posted to this blog in a couple of weeks) is pointing to an increasingly expanded role for customer advocates. Key elements of this new role include: identifying your top advocates (sometimes called Rockstars, MVPs, Customer Champions)--the ones who can dramatically increase revenues and profits; rolling them in to customer communities; helping them build their social capital (which is often much more effective than rewards, points, discounts and the like); and getting advocates increasingly involved in a broader array of solutions for your marketing, sales and even product development efforts. I'll expand on these in the next issue.