Lessons for Building a Successful Customer Reference Program
by Michael Teeling

1. Get the blessing of your VP of Sales

Most likely individual sales people are already using references in the sales process, but they are guarding them like gold and not open to sharing them with Marketing. To be actually followed (and ultimately successful), any customer reference program that is introduced needs to be blessed by the head of Sales, and rolled out to the sales force in a formal way.

2. Integrate the program with your sales process

The best way to build a reference-based business is to get new customers on board the program as soon as possible. Adding a discussion to the sales process (and better still, adding a "reference clause" to the contract) communicates that reference activity is not just highly valued and appreciated, but rewarded. This leads to the next must-have...

3. Incent sales people properly

Sales folks are predictable creatures - they respond very well to money! Give them extra cash for entering new customers into the reference program from the outset, and reward them whenever a customer graduates to a new level. Sure, Marketing knows that press articles and analyst reports on customers ultimately help sales. But without a formal compensation structure, the sales force sees Marketing's needs as just creating more work for them, and so will see no reason to help out.

4. Define program tiers

Build the reference program with multiple tiers of participation. The basic levels number five:

1. Sales reference by phone (low risk for customer)
2. Written case study for use in sales & marketing (approved by customer for publication/distribution)
3. Marketing reference for analyst relations (usually accepted by customers if positioned as helping "market research")
4. Press article reference (high risk for customer, because articles are typically published without review/approval)
5. Joint sales & marketing activities such as sales seminars and speaking at user conferences (highest risk/reward for all parties)

5. Formalize rewards structure for customers

Bronze, Silver, Gold, Platinum are oft used definitions. Other companies track the number of reference calls and other activity, and reward customers based on a point system. The rewards can be things like free consulting time, free upgrades, discounts on additional product, etc. Occasional feel-goods like wine baskets and sports tickets don't hurt either. Make sure that your best references know they are your best references! However it is formalized, make sure the program structure is clearly communicated to references. Building and rolling out a customer portal site at the annual user conference is a stellar approach.

6. Designate relationship owners for each customer

Most likely some individual owns the customer relationship already - whether it's the sales person, an account manager, or service/support person. Make sure this person knows that they won't be pushed aside, and will in fact act as the gatekeeper for all contact with their customer. That way, participation can be accurately tracked, and existing relationships aren't disrupted. This will put the customer at ease with the process as well.

7. Co-management by Sales and Marketing

To avoid the perception that the Reference Program is just for the benefit of one department or the other, the program should be co-managed by representatives from both sides, or a committee if other departments (such as customer service, technical support or professional services) have direct post-sale customer contact. A full scale, up and running program may eventually require dedicated staff to maintain, but should not necessarily at the outset.

8. Use a database or application to track the program

All this contact and reward structure needs to be captured somehow. A networked database or application is essential to controlling the input and output of the program. Hopefully the existing sales system can support this with some minimal customization, but don't forget that marketing needs to access it as well. Pray for minimal training to be necessary if relationship managers are to input activities themselves.

9. Formalize program tools & procedures

Once the program levels, administration, and compensation structure are defined, the tools of the program need to be formalized. What questions need to be answered by sales references? What is the case study creation process? Will the customer be media trained before PR activity? Sales people - indeed everyone involved in the program - need to be trained and clear on the procedures followed at each step.

10. Start with your buyer, but get to the user

Obviously, the person that mandated the purchase is the first person referenceable at any customer organization and remains critical in influencing future sales. But it is often critically important to marketing, especially with technology products and services, to eventually secure an end user as spokesperson. If possible, move toward these people as the relationship matures and reference activity warrants. They are going to be best suited to communicating the bottom line business benefits of your technology in plain English - the mandate of marketing. Most likely your original reference will be happy to share his or her duties with others as activity volume grows.

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