Know-How Exchange : Strategy

If you can provide us more information (the industry you are in, the product or service you are trying to sell, your position in the company, which country you are in, your perception of the benefits of your approach) we can provide more detailed info...

... but generally speaking, one way would be to describe the specific approach you are taking, and then use case studies of companies similar to your prospect who have used a similar approach.

Reference customers are very useful to help overcome objections and provide believability that your product does what it says it does. But not having them does not mean you won't get sales, just makes it harder to do. That just means that you will have to work harder to get the first sales. Can't tell you anything more about what to do without knowing more of your business.

Make sure that in your first sales, you get specific permission from the customer to use them as a reference customer.

It is pretty common to offer significant discounts to the first customer(s) in exchange for being reference customers.

The typical chicken-and-egg problem. You will have to tailor your sales presentation much more to the individual customer's situation/business: show her/him that your product is ideally fit for her/his situation to increase performance or save money. In other words, convince your customers they should be the early adopters of your product because of their situation: the reason you do not have reference customers yet is not that the product is no good, but that (some) other customers may need it less/have less foresight

I think that sort of challenge is addressed in a large number of books on professional technical sales.

If I were in your situation, I would attempt to recruit an experienced and professional technical salesperson with existing contacts in your target market.

You wrote:
"To my knowledge, this particular challenge is not one that is systematically addressed in any book or paper. Odd perhaps because it is such a critical challenge for emerging companies."

I also don't recall having seen any articles on this, but from what I have seen of tech startups, often when they develop their product, they have their alpha and beta customers lined up already. When the founder sees an area of opportunity, they generally start talking with potential customers to see if it could work, and some of these folks become alpha and beta customers (and then continue on to be reference customers).

This is not uncharted territory.

You need to pick a user who has an enormous amount to gain from implementing your solution. Explain the basis of your complex solution to them and ask them to work with you on a cost recovery basis to develop the first production version. This is your alpha customer.

Use the experience you gain with them to attract further test customers for the first pre-production release, where you provide the system on a cost basis but do not work as closely with them as with the alpha customer. Meet regularly with them to establish problems and pressure points. Implement the requested changes from all of them, quickly, and copy changes to all customer versions as free upgrades. You can recover more later from these customers when you set your support contract prices

Now write a case study (get a consultant in to do that for you if you don't have the resources or skills) which is generalized, and write separate sub-studies for each industry type you've worked with in alpha/beta.

Use these case studies as evidence of your credibility.

Now you have references...

This demonstrates the importance of marketing throughout the technological and product development process.

Hope this helps.

ChrisB

ChrisB is right on. If you can't get an alpha test customer by giving them the product at no cost, then you have no business trying to market it to anyone.

There must be some customer somewhere for whom your solution is the perfect answer to their biggest problem. Your challenge is to find that customer and GIVE them the product in return for a testimonial/reference.

I'd be very up-front with them and treat them like a client who would pay you twice what the product is really worth. Overkill on training, customer service, add-on features, or whatever else they want. This is not a customer you plan to make money on. They are a marketing cost component, because their testimonial will allow you to sell dozens/hundreds of others.

I was once involved in a project that included a "free sampling" approach like this one that cost my client several hundred thousand dollars. But the payoff was almost immediate and worth tens of millions of dollars in added revenue (at decent margins).

Of course, the key is finding that perfect customer -- who really needs what you have to offer and is open to being a reference account if you solve their problem. You will need to do a thorough research project to identify and learn about that perfect customer before you show up on the doorstep with your offer they can't refuse.