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Tracey E.Schelmetic

[September 8, 2004]

Beyond References

By Promise Phelon & Steven T. Nicks
Phelon Consulting Services

Ten Smart Things Companies Do to Leverage Their Customers

Part 2


The Feast Continues

In the last part of this two-part article in our Beyond References Series, we served you a banquet comprising the first five of 10 smart things companies are doing to leverage their customers today.  Here, we serve you our final top five things smart companies are doing—things you can feast on and emulate today.


6.  Know your game plan.  Capture, articulate and formalize it.  Does your strategic plan enable actionable objectives?  Do your stakeholders understand it?  Do they know what it means to them?  Can you measure its outcome?  Since your strategic plan underlies everything else you do, it must be sound and solid for the resulting tactics to impart credibility. 


All too often strategic planning yields esoteric plans that may well be meaningful to management but are not understood by those who have to implement them.  Customer leverage is no exception.  As the owner of a customer leverage strategy, you must consider the requirements of many stakeholders, show management that you are more than just a fulfillment organization, and develop plans that allow local, regional and global teams to align their work with your strategic direction.


“Our strategic planning process is not only about crafting and articulating a vision for Intel," says Wendy White, Director of Intel’s Customer Marketing Program.  "It’s also about ensuring that the members of our team and other organizations know their roles and how success will be measured.  In other words, our strategic planning process is about creating an actionable strategy."


One of our clients implemented this smart strategy by charging its North American organization—the more mature part of the customer reference program—with brainstorming and articulating their strategic plan.  Global reference teams then locally implemented the strategy.  The key was ensuring that global teams had ample input into the strategic plan.  By charging one organization with strategic planning, the company maximizes resource usage, and organizations previously competing are now coordinated and working together.


Whether you formulate a strategic plan yourself or seek outside assistance, keep these points in mind:

  • Think globally, act locally.

  • Be visionary; tell others what you want to be and help set the bar for your company.

  • Establish measurable goals and then translate them into actions your team can be accountable for.  A strategy that doesn’t translate down to the individual level will seldom succeed. 

  • Manage by your strategy.  Recognize that in our fast-paced world things will change and that none of us is clairvoyant.  If your strategic plan is just sitting on the shelf collecting dust, it is either off track or out of date.   Strategic planning is not an annual event; it’s an ongoing exercise.

 7.  It takes a company to nurture customer relationships.  Your ability to leverage--and to experience the benefits of leverage--is directly tied to the relationships you have with customers.  Seem obvious?  Well, what happens when a key reference manager or, even worse, a well connected sales rep (the only individual with direct customer contact) leaves?  How do you cope with inevitable turnover?  Will the company-to-company relationships you’ve worked so hard to create survive?  If you institutionalize the relationships on both sides, they will.


Not wanting to let relationships with customers be dependent upon the relationships of only two people, several of our smart clients have developed formal processes for up-leveling and extending relationships, both internally and externally. 


Internally, this means that everyone who touches the customer actively participates in developing the relationship.  Rather than the sales rep or the reference manager being the only individual who embraces--and touches--the customer, everyone participates.  Of course this requires effort on your part.  Every ‘reference steward’(sm)--those individuals within your company who affect the manner in which customers are leveraged for marketing, sales, product development and other strategic activities--must be educated and must understand the rules of interaction.  But the effort is well worth it.


Externally, this means you must develop concrete plans for key accounts by which you extend your reach within the customer’s company.  Don’t leave relationships to chance.  Put an action plan in place and execute against it.  Get to know more than one person by developing multiple touch points.


8.  Tune in to technology. Successful customer leverage requires the orchestration of many players and disparate activities; keeping track of everything is no small task.  If you want your reference program and customer leverage to ring like a well-practiced orchestra, we suggest you tune in to technology.  Technology will transform your organization from a right-brained creative studio to a left-brained business, where efficiency, effectiveness and scalability reign.  And the more your people are free to focus on customers rather than on paperwork and details, the more your customers will love you and share the word about you gladly.


Several of our smart clients who are tuned in to technology have either built or are building automated, comprehensive reference management systems, which includes several key components.  The systems:

  • Are self-service to allow each type of user (sales, marketing, administrators and even customers) to manage their own system interactions.

  • Incorporate workflow processes and task lists to track and ensure a smooth coordination of required activities.

  • Are searchable across organizations and regions.

 Other of our smart clients, who have less demanding needs, use simpler databases with web-based interfaces to meet their requirements.  While these solutions are not as fancy, they are much easier to plan and finance, while still easing the pain of tracking and figuring out who, what, where, when, why and how.


We learned during our 2004 Benchmarking Study that of respondent companies, not one used off-the-shelf solutions for customer leverage purposes.  Forty percent reported using custom-built applications and the remainder used SFA, CRM or PC-based solutions.  And 60 percent reported that the systems they used do not integrate with other customer information systems.[1]  Although it was no surprise that our clients don’t use off-the-shelf solutions today, several companies are working to address the issue.  And several new, innovative services are available. Regardless of what you decide, tune your organization in to technology, either on a large- or small-scale basis.


9. Stretch your customers without breaking them.  You may find that demand for references exceeds supply if you are just starting a reference program, or if few valuable customers are available to speak on behalf of your company’s emerging products.  Our clients have faced these problems, too.  The typical response when demand outpaces supply is to stretch customers by asking for call after call after call, until the customers, like Gumby, break.  And broken or even frazzled customers never appear credible to prospects. 


Several of our clients are solving this problem by implementing a smart, cost-effective strategy that enables leverage, meets excess demand and protects valuable customer relationships.  The strategy in question is hosting one-to-many events.  Although not a solution to everything, these events do help you get around scheduling problems and reduces the load on your customers.


Now before you stop reading, realize that one-to-many events can exist on a much smaller level than most of us usually think about.  For example, one of our clients who expanded into a new market discovered that periodic one-to-many sales reference calls are extremely effective.  Their customer appreciated being able to speak once instead of 17 times, and their 17 prospects got their questions answered.  Our client saved lots of money, and reports that sales’ response has been overwhelmingly, “Thank you!  Thank you!  Thank you!”  And sales’ initial concerns about out-of-control questioning were resolved by hosting a professionally moderated call.   


Beyond conference calls, several vendors use technology to help enterprises mitigate reference demand issues by storing and serving content.  The customer records a success story, which is classified, stored and served through a portal to relevant prospects.  Again, the customer speaks only once; you leverage that customer many times.


10. Communicate success through clearly defined indicators.  Ultimately, success at customer leverage will be dependant on support from senior level executives with your organization.  You can gain and maintain such support through regular, targeted communications that highlight the business value of customer leverage.  And don’t be afraid to communicate metrics that are less than optimal. Highlight shortcomings and explicitly tell others what they can do to help.


“Setting and communicating clear performance indicators is critical to how we manage our program,” says the Senior Director at one of our key clients.  “Gauging how a program is performing, and understanding why it's performing as it is, gives us two unique opportunities: first, to highlight how other organizations impact success; and second, to provide specific guidance as to how to improve performance."


The metrics you choose should directly relate back to your strategy and the goals you’ve set out to achieve.  They should demonstrate value and not highlight your tactical performance.  Although you might need to know how many reference customers or success stories you have in order to effectively manage your program, don’t report these figures outside your team.  They will cause management--and sales--to focus on the wrong areas and position your team as simply a tactical fulfillment group.  Instead, report on how you use customers in leverage activities.  Demonstrate the breadth of activities customers engage in and their impacts on concrete outcomes like new sales.  Link leverage activities to closed deals, marketing campaigns or corporate-wide initiatives.  And ask your senior executives directly how they measure success.  Knowing the answer to this question will help you choose among the multitude of available metrics.


In conclusion…

It’s a tough market out there, and it’s going to get even tougher as buyers increasingly look higher in the credibility pyramid for objective proof points and assurances that your solutions will perform as promised.  But smart companies needn’t worry.  Smart companies need only create and implement holistic customer leverage strategies--strategies that go beyond recruiting references and developing static stories about them to building genuine, mutually beneficial relationships that result in more market-aligned solutions, more insightful marketing, more effective sales and more customer-aware organizations.


Throughout this two-part article, we mentioned various technologies and strategies that you might like to learn more about.  Please e-mail us at info@phelonconsulting.com, or phone 1-877-717-9210 x508 for more information.  We welcome your questions and comments. 


We also wish to express our sincere thanks to all the companies, organizations and individuals who contributed their valuable time and insights—your contributions made this article possible.


In the next article in our Beyond Reference Series, Dianna Sadlouskos will bring you even more insight and more actionable strategies you can implement right away to leverage your key success customers for more effective sales.




Steven T. Nicks is Partner of Phelon Consulting. Steven T. Nicks brings over 15 years of experience helping companies build and successfully deploy strategies and the technology necessary to support them. Mr. Nicks, formerly a Principal at PricewaterhouseCoopers and Senior Consultant with Ernst & Young, has helped companies understand their customers and developed innovative approaches to strategic decision making and communications.  He may be contacted at steven.nicks@phelonconsulting.com


Promise Phelon is the founder and Partner 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 promise.phelon@phelonconsulting.com 



[1] Customer Reference Benchmarking Study—2004 Edition: Adding to the Value Equation. Promise Phelon. Copyright  Phelon Consulting, 2004.


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