Customer references have always been key ingredient in successful selling and marketing. Nothing differentiates you from the competition as effectively as strong customer references, and nothing but first-hand experience provides better evidence of your claims about what your company delivers.
As today's markets consolidate and become increasingly competitive, and as buyers become more sophisticated and demanding, customer evidence gains even greater importance. But many customer reference programs (CRPs) are stuck in outmoded thinking, and that could be significantly holding your company back.
So how can CRPs evolve to meet today's challenges? This article will take a look back at how customer reference programs arrived and where they are today, then give insight into how you can help them to evolve into strategic assets.
Early Evolution in Perspective
Reference programs were born out of frustration. Sales reps found they were spending too much time looking for customer references—emailing colleagues, scrambling for information and good matches—and that the last-minute mad dash ate into their productivity. Marketing departments were only too happy to take on this valuable role, and reference programs as we know them were born.
Once marketing departments had established these programs, they realized they were on to something good. Logically, the same CRPs that were already gathering information for sales could also create case studies and videos, and provide customers for PR and analyst relations needs too. So CRPs expanded their charters, and some even specialized to focus more exclusively on marketing deliverables.
These were good times for customer reference programs, and many grew by leaps and bounds, fueled by an intuitive sense of the value CRPs offered. As more headcount and marketing dollars were committed to CRPs, traditional marketing functions claimed greater influence over the programs' outputs.
For many CRPs, the pendulum swung toward the creation of marketing assets, and many let go of their historic connection to sales. Today three of ten programs infrequently or never meet with the sales forces they serve—a clear indicator of missing alignment.
Yet budget and headcount don't increase for long without something to show for the investment, and sales and marketing leaders began to increase their scrutiny of reference programs. Looking to showcase strategic value, CRPs took on additional functions, such as protecting customers from overuse. They also defined their value in terms of owning and executing as many reference functions as possible, including qualifying and recruiting reference customers, maintaining "reference relationships" with key customers, personally fulfilling requests from sales reps, and creating as many reference deliverables—mainly success stories—as possible.
CRPs attempted to measure their value in two ways: quantifying reference outputs (number of case studies) and qualifying their "soft" benefits like improved customer relationships and protecting valuable customer reference resources.
Neither of these measurements truly demonstrates value in an executive-friendly way, because they don't draw direct connections to business impact. Having 300 of the wrong customer success stories is worse than having none, if for no other reason than the expense of developing them.
So as smart executives began to question the impact of success stories and other traditional deliverables, and CRPs failed to find credible, defensible ways to demonstrate their impact on the business, budgets and headcount flattened, and even decreased for some programs.
Of course, demand kept growing, which meant that reference programs today find themselves caught between the pressure to contain or decrease costs and the ever-increasing demand for references.
Where Do We Stand Today?
Many customer reference programs today are stuck in a rut for a variety of reasons:
- The view that CRP team members add value only when they personally deliver on reference tasks and requests
- A failure to map program resources to the needs and priorities of the sales force, including continued reliance on traditional customer reference deliverables like case studies
- An increased emphasis on "soft" values such as owning the reference relationship in a misdirected bid to increase value to the organization
- The inability to replace measures of quantity with measures of impact
The top concern we hear from CRPs is about not having enough resources to meet all the demands placed on the team. It's a realistic concern, if meeting each demand requires real-time involvement from a team member and a team of four must serve a sales force of 5,000 selling a complex set of products and services—not to mention all the associated marketing efforts.
But this problem is not fundamentally one about resources. It's about the definition of value. In today's view, value comes from delivery rather than strategy and enablement.
One reason for misunderstanding the source of value: It's very hard to measure business impact. Most CRPs haven't yet done their homework to really understand how their stakeholders think about business value, and then translate understanding into the measures that count. So "soft" values, like protecting customers from overuse, prevail; but they don't gain real traction in the organization.
Transforming for Strategic Value
To reposition themselves, CRPs need to break out of the "value equals execution" mindset and focus instead on the core job of reference programs—to foster reference stewardship for the greater good of the sales force. Reference programs add value if they improve matters for the sales force and other groups, such as marketing.
The smart and strategic CRP distributes reference work to its natural places in the organization and acts as a coordinating influence. In this way, the reference program works with the needs of the company and the flow of the customer lifecycle, rather than swimming upstream and battling all the time.
For example, product marketing teams that clamor to qualify customers and work with account owners to vet them for activities should be embraced. Sales people keep their natural role of maintaining and building customer relationships and protecting customers against overuse. Professional services groups provide insight and intelligence in support of qualification and targeting for potential customers. The reference program provides structure, process, and a repository of information, plus merchandizing and best-practice education.
You'll recognize a strategic CRP by these characteristics:
- It sets a companywide reference strategy, supported by tools, processes, and planning managed centrally.
- It allows and encourages distributed execution of reference tasks according to the central strategy—all departments are expected to contribute their talents and unique roles to the development of references.
- It fosters a companywide emphasis on customer "referability" as a critical, valuable outcome of a positive experience with the company.
- It collaborates with the sales force to maintain a central repository of reference information that's available to all interested parties.
- It defines its value by impact on key aspects of the business, such as length of sales cycle or success of go-to-market approach.
- It has credible success metrics that demonstrate its value and resonate with executives and stakeholders.
Next time, in Part 2: Changing the corporate culture through customer focus.
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