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How to set up a customer reference program

Is your company doing everything it can to generate customer referrals and positive word-of-mouth?

If you suspect the answer is ďno,Ē then you should consider setting up a formal customer reference program.

Customer reference programs-an increasingly important constituent of corporate sales and marketing plans-groom customers for customer reference activities. These customers then can help your company with:

* Case studies for publication on your Website, distribution by sales reps to prospects, or for use as collateral at trade shows.

* Video testimonials.

* Press interviews.

* Quotes for press releases.

*Testimonials for use in brochures, trade show back walls, advertisements, or other marketing collateral.

* Giving talks or presentations, or sitting on panels at trade shows and conferences.

* Hosting on-site visits from prospects or agreeing to serve as direct references by phone or user conference meetings.

Does your company currently ask customers to participate in these kinds of activities? Whether you already do or are thinking about it, keep in mind that a formal customer reference program ensures you donít inadvertently inundate customers with reference requests.

By centrally tracking customer touches, you coordinate all reference activities. Each line of business, as well as your sales, marketing, and PR organizations, will know which customers youíve approached and how theyíve responded. Youíll protect the goodwill happy customers feel about your company. And your company will be able to use customer references strategically. Here are some guidelines to consider if you decide to establish a customer reference program for your company.

Scope is everything.

To maximize the effectiveness of your reference program, engage all stakeholders who can contribute to or benefit from the program. Itís likely-especially as your program becomes established-that both sales and marketing will want to leverage the program. Sales will want access to the customers to help them gain inroads into new accounts and close deals. Marketing will want your customers to provide quotes or take press calls.

Itís, therefore, important to include leadership from both organizations in the planning and management of your reference program. Equally important: Define responsibilities. Will ownership of the program be shared? Who will fund it? Who will contribute resources to management of the program? Another issue to address is how the two organizations will provide and share data.

Establish your reference program on an enterprise-wide basis. If your company spans multiple lines of business, track reference activities across those organizations. Then you will have a comprehensive record of each customerís relationship with your company. You eliminate the risk of the customer fielding reference requests from multiple lines of business concurrently. And youíll be more readily able to identify opportunities to strategically leverage customers.

In-house or outsourced

There are several potential benefits to outsourcing your customer reference program, including the ability to ramp up more quickly and leverage established experts. But if your company has the resources and is willing to commit long-term to managing the program in-house, it might make sense to handle it internally. Or you might want to outsource only a portion of your program such as request fulfilment.

The database.

The foundation of any customer reference program is a database of customer information. Depending on your companyís size and the scope of your reference program, you can track this information using something as simple as a spreadsheet. Larger companies might want to create a custom database; this might be integrated with corporate ERP systems.

There are also off-the-shelf software applications available. As you evaluate options, consider how large the database needs to be. Good searchability is important, as is security. If the application resides on a network or corporate intranet, you need to make sure safeguards are in place to protect its integrity and the privacy of your customers.

The data.

Minimally, you will want to track basic information about each customer: contact information, status of the relationship, what products or services the customer purchased, account manager, etc.

You also should note what reference activities each customer has agreed to support and how often you tap them for participation. This helps ensure you donít under- or over-use particular customers.

What resources will you need?

There are several categories of tasks that are associated with managing a customer reference program. These include administrative functions such as data entry, and higher skill tasks such as approaching account teams and their customers to gauge their willingness to serve as references.

You need to allocate resources for each of these responsibilities. You also should prepare for growth, because once the program is established and its value recognized, demand for it is likely to grow.


To be continued


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