Why Customer Reference Programs Should Be Replaced By Customer Advocacy
Customer reference programs have been a hallmark of the B2B sales enablement process for years. As new sales opportunities reach the end of the pipeline, customer reference calls are the final tool used to close the deal.
But with new, and more effective strategies being discovered, I’m forced to wonder: are customer references strategic, or simply a reflex?
Does anyone else feel like reference calls are outdated?
(If you really want to dive into this topic, download our free eBook on how modern marketers are managing the reference process.)
Are customer reference programs a dying breed?
Times are changing. A 2014 research report by Forrester, called Tip The Balance from Reference Customers to Advocates, makes that obvious.
After interviewing dozens of marketing professionals from leading technology companies, including Ektron, Marketo, and Oracle, Peter O’Neill, VP and Research Director at Forrester concludes that, “Spending on customer reference programs is too much, too late.”
On average, companies spend around $250,000 on customer reference programs each year, while larger enterprises spend more than $1 million. But are those reference programs getting results?
Peter says reference programs are a thing of the past. Today’s consumers are not waiting for you (or your sales reps) to give them the data they need. The buyer’s journey has changed, and consumers are now conducting their own extensive research and reading more content to support their purchases. In fact, 70-90% of the buyer’s journey is complete prior to engaging a vendor. They consume content from peers and colleagues, discuss their needs over social media and ask questions on discussion boards.
What’s the fix for broken reference programs? Advocacy
Forrester recommends marketers focus on building a program focused on customer advocacy (not one that just asks for references when you desperately need to close a deal).
Most of the buying process happens during conversations you’re not invited to. Since buyers are talking with peers, being able to influence those peers should be a key part of your sales and marketing strategy.
“References help you win; advocates get you on a shortlist,” says Peter. If you can introduce advocates earlier in the prospect’s discovery process, they can help your solution make the vendor’s shortlist.
Harnessing, encouraging and motivating your advocates in a systematic way can be done through a formal advocate marketing program—not a reference program.
Traditional customer reference programs are self-serving, biased and come way too late in the buying process. The worst part is: buyers know it.
Find out how other customer success, marketing and sales professionals are transforming the way their companies harness relationships with loyal customers in the age of advocacy.
Advocate marketing as the new reference program
An advocate marketing program can drive peer reviews, online content creation and develop an influential user community. This helps change the conversation around your brand by using your best customers to engage new prospects earlier in the buying process.
Reference programs are reactive, while advocate marketing is proactive.
Reference programs also don’t provide a lot of value to the customers acting as references, and they often cause reference “burnout.” An advocate marketing program allows you to find your most enthusiastic customers and recognize them for talking about your brand—well before it’s time for a reference call.
Advocate marketing technology makes WOM scalable
An advocate marketing platform, like Influitive’s AdvocateHub, can help you unearth new references, influence buying decisions, and drive positive word of mouth through a large number of advocates at scale.
As an example, Blackbaud, a non-profit software solutions provider, used their advocate marketing program—Blackbaud Champions—to help discover and manage their references. In 2015, they had 125 opportunites influenced by references they discovered in their program—which led to $8.7 million in closed business. (To learn more about how they did it, download this eBook.)
Learn how Influitive can help you mobilize your top advocates and transform your reference process
This blog post was originally published February 28, 2014.