We in the customer reference management community always welcome the attention of the large analyst firms. So it was with great anticipation that we dialed in for the Aug 3rd Gartner presentation entitled, How to manage a customer reference program.

Analyst Richard Fouts began with a few survey results that reaffirmed the importance of customer references:

• The number 1 answer to: How effective are these marketing activities in influencing your preference to purchase from one type of IT provider over another? was “References from the provider’s customers.” There were 13 choices including events, sales presentations, white papers, vendor web sites, etc. Interestingly, there was no mention of social media, which is Forrester’s mantra (e.g., reference activity is increasingly going social, or community).
• Fifty-nine percent of respondents answered either “2 times..” or “3 times more likely” to the question: How more likely are you to buy, if a provider you are most familiar with is able to effectively quantify the business impact of its solution? Yes, everyone wants ROI and other metrics. This has been a pretty consistent topic at Customer Reference Forums for the past 4 years: How to get customer to talk more about their quantifiable results?
• What do buyers wish we marketers would do more effectively? To this question the weakness as perceived by buyers is a vendor’s ability to understand business needs and requirements.

Gartner’s take away concerning the buyer’s perspective?

“If you quantify your value proposition, through the eyes of a customer reference (who’s business needs are similar to mine)… I am more likely to buy from you versus your competitor.”

Mr. Fouts offered a highly simplified 3 step process for a successful program. Most reference pros will be quick to point out another 10-20 steps that shouldn’t be overlooked. But here are his 3 steps with paraphrased sub-points, followed by our comments (CRI):

1. Build a culture of ―referenceability
   - perform a gap analysis across segments such as geo, industry, etc.
   - engage all related functions such as PR, AR, etc.
   - tie program to employee compensation
   CRI: An important prerequisite is gaining executive support. Bullets 2 and 3 above, in particular, may only be possible with executive support, depending on the organization. Additionally, whether an individual or a team, the executive team must support a central source of reference knowledge and activity for it to be successful.
2. Sell customers on being a reference(vs. asking them..)
   - use all avenues for promoting the program and recruiting such as trade shows, co-marketing campaigns, speaking opportunities/awards
   CRI: We often refer to this as creating a program with member benefits. Remember the old American Express tagline:  “Membership has it’s privileges.” In addition to a whole host of possible rewards (transactional or loyalty-oriented), simply being part of an exclusive group of customers should also be a valid reason to join.
3. Control the program (versus letting it control you)
   - put someone in charge
   - use permission forms
   - you decide who is a reference
   - use references to pitch your company, to train sales people, to recruit top talent
   CRI: Part of the reason many reference program initiatives aren’t taken seriously is that they aren’t run like other more mature disciplines in the marketing or sales organizations. This was also a point made by Laura Ramos from Forrester. Success begins with the right person at the helm, and ends with a bona fide approach toward measurement of program impact.

Mr. Fouts also tossed in a few miscellaneous recommendations such as maintaining a recruiting pipeline, protect references from overuse by establishing limits, take advantage of user surveys to identify candidates, and take the opportunity to secure reference commitments during contract negotiations.

CRI: All good practices if not ground breaking recommendations. Regarding user surveys, we strongly advise clients whose marketing team includes the Net Promoter question to get a hold of the list of promoters (self-described advocates). This is the best recruitment list you will find! On the topic of contract negotiations, we’d say that most buyers won’t commit contractually to being a reference. And even if they do, its supremely hard to make them be a references later on. Best to use customers who are honest-to-goodness-happy and more than willing to participate, then those who feel contractually obligated.

The conclusion included the following paraphrased items:
- references reduce buyer risk
- providers marketers are leaving ROI on table by limiting use to sales activities
- many providers lack a point person
- many ask vs. sell on being a reference

CRI: We wholeheartedly believe in peppering the entire sales process with the voice of the customer. From early stage press releases and video testimonials, to late stage video case studies and ROI studies, and using webinars and blog posts in between. There is no better sales asset in your company.

If you’d like to take a deeper dive into all the moving parts of a customer reference program, check out our maturity model tool. A customer reference program is not a small undertaking, but the value to an organization are limitless.