What is a customer reference?

Let’s start with a definition. There’s quite a spectrum of options ranging from the least difficult to secure to the most difficult. Here’s a list starting with the easiest to secure and ending with most difficult.

• Accept phone calls from prospective customers once a month
• Accept interviews with press editors and/or analysts
• Participate in a small, invitation-only seminar for your prospects
• Grant usage of company logo on your website and collateral
• Grant a press release you issue on their product deployment
• Grant a press release they issue on your product deployment
• Approve a detailed case study
• Offer a speaker opportunity at an industry tradeshow

How do you get a customer reference?

So what can you offer to motivate a customer to be a reference? Here are some best practices that we’ve seen work:

Price concession on software upgrades and support contracts. It’s not unusual to pay anywhere from $5k to $50k. You can estimate the value of a reference by guessing how it might impact sales.

Personal fame and networking for your customer sponsor. That is, by offering a public speaking forum or private phone calls, you’re giving the sponsor a chance to network with industry peers and executives in a way that increases his profile. This may help later when he is considering a job move.

Alignment with their PR. Show how your reference request is actually in their corporate publicity interests. The next section goes into this in more detail.

How to engage corporate PR?

Your customer’s corporate public relations (PR) department is most likely your greatest opponent when it comes to securing public references. Here are a couple approaches that have worked:

Win them over – read your customer’s press releases for the last year and see what messages seem most important to them. Sometimes your reference request can very directly support a corporate marketing message that needs “proof points” or reinforcement. For example, show how this purchase was part of long term, deliberate strategy rather than a reaction to the latest security breach or other fire drill. Make them look good.

Stay under the radar – sometimes a sponsor is drawn to the networking opportunity and is willing to take some risk. Try a small customer seminar where your sponsor is an invited panelist where he feels he doesn’t necessarily need to get PR approval. You can include the sponsor’s name and title but leave the company name off any promotional emails or mailings. That way you’re less likely to get the sponsor in trouble with PR.

When to ask for a reference?

The best time to ask for a reference is at the time of purchase when you’re negotiating the contract. Get the word out to your sales teams that customer references are a mandatory part of your contract negotiations process so that you begin to develop a library of customer references long before you need it. Start by asking customers for use of their logo, quotes from managers on the deployment, and written case studies. You can make referenceability one of the horse-trade items that are part of a larger business negotiation.

We hope you find these best practices useful to your own business. © 2006.