Question

Topic: Customer Behavior

What To Do When Asked For References

Posted by Laffer on 8/13/2009 at 9:15 PM ET 250 Points
So, we're a four-year old b2b company in an established market expanding in a new area via mostly sales-force on the ground. New prospects really like our pricing and service offer, but we're "new" and they ask for references (8 out of 10). They're willing to "switch" from a current provider once convinced that the "new guys will perform as well as the old guys". Problem is, when we provide references, prospects do their homework and call the references - too much. References give good reports, but get turned off by multiple calls from new prospects. Need help figuring out how to fix this problem: new prospects want references, but we don't want existing customers turned off. Any ideas are welcome - marketing, or sales process. Sorry I don't have more points to give but really need some help here - almost like a chicken and egg syndrome...
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RESPONSES

  • Posted by Gary Bloomer on 8/13/2009 at 9:36 PM Accepted
    Dear Alafren,

    Here, you probably need to forget about business and marketing for a moment and roll out the big guns of psychology. This means offering new clients some new forms of "social" proof, not as distractions, but as attention grabbers.

    This way your clients create their own references.

    Testimonials from current, happy, clients on your website (preferably on video) offer great proof and give you greater control, both over the presentation, and over the amount of information being given out.

    Here you'll be using the rules of similarity (which is what the whole reference thing is about anyway). This means we want to work with people that remind us of ourselves.

    The practical upshot of this is that your other clients don't have to keep wasting their time answering the same questions over and over again.

    Reverse their risk. Offer 150 percent guarantees that provide financial "proof" that if you screw up, your client gets his or her money back AND, you'll match 50 percent as a gift to the charity
    of their choice.

    Or tell them that if they're not fully 100 percent happy within the first 30 day billing cycle, that they pay nothing. Nil. Not one penny.
    Yes, this is a huge gamble. But if you're as good as you obviously are, if this kind of offer doesn't get their attention and shut them up, nothing will.

    And if this ploy falls flat and cost you money you learn that the companies that screw you over are not the kinds of people you want to be dealing with. So you could see this as an investment.

    I hope this helps.

    Gary Bloomer
    Wilmington, DE, USA


  • Posted by melissa.paulik on 8/13/2009 at 10:13 PM Accepted
    Here are a few things that have worked for me when I've been in a situation like yours.

    First, if your sales cycle is long and complex, make sure you are saving the references for latter stage. No sense in wasting these on buyers that aren't really buyers yet.

    Second, you can work with your prospects to come up with alternative forms of references. Great customer stories (not poor ones) can take the place of multiple references for some. You may still need to give them one they can actually contact, but you may save yourself from having to give out two or three.

    Use the info from your case stories in multiple places. Pull out quotes for your website and your presentations. Reference them on your blog. (Make sure the post is more about them than you and you will help build goodwill.) Ask your customers if they are interested in co-presenting in a webinar and then make that webinar part of your on-demand content on your site.

    All the best!

    Melissa
  • Posted by michael on 8/14/2009 at 8:55 AM Accepted
    My first thought is that you didn't ask permission to provide references.

    My second thought is that your customers aren't rabid fans yet. You need them to be.

    You don't have a link to your sight on your profile so I can't see exactly what you do. But, you may want to offer a cut-back intro version to get prospects to try your service. Even a full scale trial can be cancelled in 30 days.

    Michael
  • Posted by Laffer on 8/16/2009 at 12:31 AM Author
    Thanks everyone for your thoughtful responses! I'll provide a bit more information. We're a retail supplier of electricity, operating in 13 of the 14 states where electricity deregulation has occurred. Because of the way electricity can be purchased in these states, we offer in many cases a substantial discount over standard electrical utility rates for industrial and commercial users. For those who make the change, power is delivered through the same lines, using same meters and equipment, with no disruptions to service, nor any "service risk" (no sudden power surges or loss of power just because of the change in supplier). It's all part of the electricity deregulation. We don't require long-term committments - customers can cancel any time during a 30 day cycle with no penalties. There are no "sign-up fees". Problem is, many smaller or mid-size customers with whom it's still profitable to do business are not aware of the options available to them. They become interested, but skeptical. Our first hurdle is convincing them that their new options for power are legitimate, safe, and steady. That's why even though they are interested in saving money, they are wary about makeing a change without knowing if others have done it successfully. Before I close this question I'm interested to hear if this new information may foster more thoughts. Thanks!
  • Posted on 8/23/2009 at 8:32 PM Member
    I am facing the same problem, you are not alone...
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