A
Case For The Customers: Addressing Strategic Issues That Face Your
Customer Reference Program
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The last article
in my six-part Customers Are the SolutionTM series presented a wealth of proof
points, experiences and anecdotes about the asset value of customers to
your organization, showing just how critical customers are to enabling and
accelerating sales.
The
initial purpose of this second article was to provide a how-to for
building a successful customer reference program; a tactical piece that
would have educated and empowered marketing and communications vice
presidents, customer reference program directors and managers, and those
who create tools that enable reference selling and marketing. After
serious consideration and debate among the Phelon Consulting team, we
decided to change this article’s focus.
Through
both our consulting practice and the research and analysis arm of Phelon
Consulting, and from feedback on our past articles many of you provided,
we realized that the value of customer referencing is gaining momentum and
visibility among higher ranks within large enterprises. As a result, in
this article, I will instead focus first on strategic-level issues faced
by the executive who is in the process of assessing the value and success
of his or her company’s current reference activities; tactical details
will follow in a future article.
To
potentially influence your thinking and help you make decisions about your
reference program’s fate, I begin with a fundamental question: Is your
customer reference program designed to be successful? If you answer
‘yes,’ no need to keep reading this article. Enjoy your afternoon. If
you answer 'no,' or if you’re not sure, please consider these four
questions and responses designed to spawn more thinking and to guide your
decision:
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Is your reference organization
staffed for success? Since managing a reference program is not
easy, placing the right person at its helm is a critical success
factor both in the short and long terms. Oversight is best handled by
someone who understands the art of relationships -- specifically the
program’s relationship with the sales, marketing and product
organizations, as well as the company’s relationship with its
customers and strategic partners.
Further,
this individual should be comfortable with the science of references to a)
tackle the analysis required to assess reference inventory versus demand
so that high-value customers are not burned out; b) tie target customers
to sales forecasts and marketing activities; and c) identify tactical
alternatives to 1:1 reference activities where demand for a certain
reference category exceeds supply.
In
essence, a reference manager should be comfortable establishing friendly
relationships with customers, while at the same time, being able to direct
the reference team so it’s proactive in its thinking about its
stakeholders’ needs, as well as the reference inventory and pipeline.
Characteristics
of the ideal reference leader include a wealth of sales, business
development and services experience, as well as knowledge of traditional
marketing concepts and marketing-centric customer reference requirements.
The person running your reference program doesn’t necessarily have to be
an analyst relations expert, but should be knowledgeable enough to
understand the drivers and impacts of customers to the various
organizations existing under the marketing umbrella.
A
colleague of mine who runs the reference program at a large company has
most, if not all, of the aforementioned qualities, as well as one rarely
considered -- several years experience in the services side of large, enterprise
technology companies. Need I say more? This senior reference manager
has been “the” company face for vendors delivering enterprise-wide and
business-critical billing, supply chain, application development and
security systems. She fundamentally understands that customers’
successes are requirements for building solid reference relationships.
As
I’ve mentioned before, referencability cannot be found in contracts or
obligations. Your experiences of working overnight with customers making
the Y2K transition or helping them resolve Web-based viruses enable a
greater understanding of which references to pursue and how to
build a quality portfolio of best customer successes. The most
compelling case study, nine times out of 10, does not come from your
company’s 85th financial services deployment. Instead, it comes from the customer your
technical support organization saved when his e-commerce system crashed in
the middle of the holiday shopping season because of another vendor’s
technology. Not only is the customer more excited, but their story is more
compelling and believable.
-
Have you clearly defined key
stakeholders, priorities and organizational values for the customer
reference team? We begin most of our consulting engagements by
searching for a consistent and cohesive definition of a reference
program’s priorities and stakeholders. For instance, if you ask ten
heads of household across the country what three expenses they would
prioritize if their paychecks were cut in half, responses from Los
Angeles to Dallas to Greenwich Village would be similar if not
identical. To illustrate, I conducted a quick, informal survey of
seven, and found the responses to be absolutely identical: 1) rent or
mortgage, 2) utilities and 3) food. Sure, a few of us might prioritize
high-speed Internet access and the Sopranos over food and electricity,
but undoubtedly, we’d be in the minority. The point is, few customer
reference programs have clearly defined priorities based on specific
key stakeholders and their respective requirements.
While
every company has its unique politics, customer reference organizations as
a whole are working with fragile and limited resources, and are often
understaffed. Stakeholder groups, priorities and corresponding goals and
objectives must be in place or the customer reference organization will be
100 percent transaction-oriented; resulting in burned out customer
relationships.
How to
get to where you need to be? List
the program’s likely stakeholders and their corresponding internal or
external customers. Prioritize them. Which are the top three? Knowing your
stakeholders will impact the rules of engagement; it will dictate the
types of customers your program targets and how long those customers are
‘managed’; and, most importantly, it will significantly influence the
values and guiding principles of the organization(s) with which the
reference program is aligned, as well as the organization(s)’ subsequent
requirements.
-
Does your customer reference
organization have the resources and support it needs to be successful?
A reality with which many reference programs are faced is that they
are often over-tasked, over-criticized and under-funded. Separate from
the team headcount issue, it is important that reference management
consider the gravity and importance of a group providing the sales
team with quality customers -- customers that influence multimillion
dollar deals and place your company in the upper right-hand quadrant.
This
reference group, which has the potential to save your company a
significant amount of sales-associated costs and elevate its marketing
messages above the noise, also requires IT resources in addition to the
givens of money and headcount. Why? Reference programs have tremendous
value; however, data integrity is fundamental to getting it right.
Unfortunately, many reference programs are forced to work with single-user
spreadsheets. The ability to systematically and centrally manage customer
references and their information is critical to the long-term success and
effectiveness of the reference organization.
Organizationally,
the customer reference program, although it lives almost exclusively with
marketing, straddles a very dangerous fence as the ground between sales
and marketing is sometimes …contentious. I will simplify the situation
by saying that the most successful customer reference programs are not
only those with customer-hugging executives, but those with a senior
management willing to stand up on behalf of the reference team in its
efforts to protect valuable customer references from overuse and outright
abuse.
-
How do you define success? In a
recent engagement, we were asked to help improve business operations
of the customer reference program within a large organization. After
interviewing many of the program’s stakeholders, customers and the
reference team, it became apparent that the group had no baseline or
set of metrics by which we could study historical patterns, or
something upon which we, or they, could identify specific issues
within the program.
Kick
off your new year by devising five metrics and performance measures that
will clearly, and consistently, gauge the success of your company’s
reference program. While you’re
at it, identify four senior executives in the company who are in a
position to participate in the program as advocates. Engaging executives
across the organization not only raises visibility, support and awareness
of the program, it creates sensitivities to cross-company impact on
customer referencability.
CONCLUSION
In summary, the
importance and impact of customer references is undeniable. However, as
most reference programs have evolved from the event-driven and tactical to
significantly influencing sales, product development and marketing, they
have lacked the executive and senior-level attention necessary to truly be
successful. The objective of this article is to present questions and
information that attempt to uncover whether your company’s customer
reference program is designed to be successful. The goal is, ultimately,
to change the way your organization views the customer reference program.
So,
before you keep that customer reference budget flat or not add additional
headcount, consider the aforementioned questions, as well as the history
of your program’s evolution. Maybe an infusion of executive power,
headcount and resources toward the program is in order. Worst case, your
company would have a better relationship with its high-value customers,
greater emphasis on reference-based selling and a bent toward customer
marketing.
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Promise Phelon is the
founder and principal at Phelon Consulting, a consulting firm focused on
enabling enterprise software companies to shorten their sales cycles by
leveraging sales and customer successes. She may be contacted at [email protected].
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