How Rackspace Uses Customer Voices To Compete With Microsoft, Google, And Amazon

amp-talksIn 2007, Rackspace was battling to differentiate itself in the cloud hosting market. Their competitors? Global giants like Microsoft, Google, IBM, and Amazon. After a few flopped marketing campaigns, Jason Carter, Global Communications, Customer Advocacy at Rackspace, realized that elevating customer voices could be their most powerful tool yet.

Watch Jason’s Advocamp presentation to learn how he created a new reference program focused on customer advocacy that’s poised to drive the brand’s sales and marketing initiatives.


I hope you all take away a few things from Rackspace’s journey in customer references.

If I could start by asking if anybody who is a Rackspace customer can raise your hand. Looks like we have quite a few. Now, could you leave your hand raised if you’re happy? Okay! There’s four new references right there. The truth is, that’s about as scientific as we used to be in terms of recruiting new customers to the program. It was kind of a mess.

Rackspace is the number one managed cloud, according to the Gartner Magic Quadrant. We have over 300,000 customers. We have 6,000 employees that we call “Rackers.” We host 68% of the F100 companies. We have nine offices and data centers in 11 different countries. And we’re also the home of Fanatical Support. And as a group of marketers, doesn’t that sound great, Fanatical Support? I mean, it’s one of the best taglines ever. That’s why we copyrighted it.

Let me flashback to 2007. Things at Rackspace were incredible. I was running a few sales teams at the time, and we were blowing out our numbers. Everybody was happy. We’d already filed the paperwork to get public. There was a buzz every single day in the office. So I’m driving home, and it’s like 6:00 and it’s my boss, ‘Hello.’ And he just tells me, ‘drop everything you’re doing and get back to the office now.’ So I’m thinking, well, maybe I’m being promoted.

And it was a very surreal scene. This is 6:30 at night. The parking lot is packed. People are parking in the streets. People are kind of running and hustling in the office and I grabbed this guy and I asked him what the hell is going on? It turns out there was a guy in Dallas, Texas driving a pickup truck. This particular gentleman had a seizure and his pickup went through a ditch and jumped the barrier and landed right into a power generator at our biggest data center. I’m no engineer but when a data center loses power, I think that’s kind of a bad thing.

We had 60,000 customers in that data center. Our office looked like a Chicago trading room. Four people were on the phone. There were hundreds upon hundreds of Rackers back there. But not only that, there were family members of Rackers there, because they had to come back. I mean, there were single moms with their two kids under the desk. One was calling customers telling them exactly what’s happening. The phones, of course, were ringing off the hook. We were there until about three or four in the morning talking to customers until everything leveled off.

Now, out of the 50,000 customers that were affected—I mean, these people were down, and they were furious—only about 10 of them actually left Rackspace. So that made, to me, Fanatical Support very real. Fanatical Support is a real thing. The irony of Fanatical Support is it makes it very hard to build a customer reference program, because I always thought that building a customer reference program than asking customers for favor. And there’s a part of it that just felt kind of dirty. You know, it wasn’t in our DNA. We volunteer for our customers everyday, not the other way around.

So that caused a lot of problems. And besides, we were Rackspace. We didn’t need the voice of a customer. We knew that they loved us. We love them. Customers are sending our support team birthday cakes. We were shooting funny videos and singing happy birthday to customers. Everything was great!

But things started changing. Companies like Microsoft, Google, IBM and Amazon that were getting into the space were creating these massive public clouds where people could just pull out a credit card and compute on-demand. It became hard for our sales guys to talk to customers and prospects and explain why we’re 80% more than similar solutions, if we’re looking at an apples to apples as comparison.

So, we of course drew out our own marketing campaigns. I think we had the Open Cloud, and then we had the Performance Cloud, and all these felt very flat. And at the time, I was writing speeches and doing all the executive comments for our then CEO, Lanham Napier, and he said, you know, ‘Hey, Carter, come on. We got to get on the road.’ We started sitting down with customers and really asking them, ‘What’s the difference between us and them?’ And what we heard was incredible. You know, they were telling us everything that we knew, but didn’t know how to say.

And when we got back to the headquarters, he said that we had to start figuring out a way for customers to start telling our story. So myself, and our former chief blog editor, started doing a series of customer-related blogs. During this process, we would call a customer and interview them, and then go through the editing process. I learned two things doing this:

  1. Customers had incredible amount of information. It’s so valuable and it was just validating everything that we stood for.
  2. Being a part of the creative process with a customer creates a bond and trust.

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And as these blogs started catching on, which was great, the bad thing is that people started coming directly to me to get customer references. That wasn’t my job. As a matter of fact, our now CEO, Taylor Rhodes, and the Investor Relations Group, came to me on a Tuesday and said ‘We’re having some bankers from Goldman and Merril Lynch coming into town, and we’d love to have three or four customers talk about our value proposition.’

‘That’s a great idea! That’s what we’re trying to do. When is this?’ I asked.


I think that if a CEO asked you for something, that’s not really a suggestion. You’ve just got to figure out a way to get it done. So, I picked up the phone and I called some of these customers that I had been blogging with, who I’d developed a pretty strong relationship with. I called them and said, ‘Listen, Ted, I know it’s Tuesday, you probably have nothing going on. Can you fly to San Antonio and speak in front of a bunch of bankers from Wall Street?’

We got it done, and it was very successful. I don’t think there’s a correlation here, but the next week, our stock went up a point. We have 122 million outstanding shares. So I think that little activity boosted on our market capital by $122M. I saw none of that. But the power is there.

Next, I was also approached to run the customer reference program, and I did not want the job. I was having a lot of fun writing speeches, travelling with the CEO, and cranking out a blog here and there. I didn’t want it. As a matter of fact, I demanded ‘I do not want this new job.’

So, the first day on my new job as the customer lead, I kind of gathered around some of the folks that were involved. I started asking some probing questions like, ‘Who can show me the list of customers?’ And there was crickets. I was told there was an Excel spreadsheet somewhere, or somebody had a whiteboard over here, but there was just no process. So I took a deep breath. ‘Tell me now, how do we recruit customers? What’s the process? Are we targeting a certain number or quota?’ Again, I hear crickets.

And at that point, I went out to my car and I thought I would drive away forever. But then, I remembered that we had some serious investments in the NPS system, so much so that Fred Reichheld, the creator of the NPS system, sits on our board of directors. I knew we had a lot of information. I went to the director of our NPS, had a cup of coffee with him, and asked, ‘Hey, just curious, how many promoters do we have?’ Promoters are the ones that are giving us 9s and 10s. They’re the ones that take the time to recommend our service to a friend or colleague. In business, it’s about as good as it gets. He said, ‘Well, we have about 60,000.’ You know, at that point, I wish I had a big mouthful of coffee, because it would have been the best spit take of all time! Then I asked him, ‘Okay, out of these 60,000 promoters, how many have we called on to be reference customers?’ And the number was zero.

So I took a sample of these promoters, about 500, and reached out to them. Not to ask them to be a reference customer, but to thank them for being promoters, and asking if we could, in turn, promote their business, whether it be through a blog, a video or having them speak. Out of that sample, we got about 125 brand new reference customers, or advocates, if you will.

So we had figured out a way to recruit and we’re expanding this globally now on a bigger scale. But the question I’m sure a lot of you have is what do you do once you get them into the family? You can’t just sign them up and not do anything with them. From my blogging days, I knew that going through the creative process and creating really cool assets creates a connection with the customers and gives them something to do. Here’s a short video that gives you an example of one our advocates talking about his company, and promoting Rackspace at the same time.

I think that’s better than any advertisement that we could’ve come up with at the time. And that was just me flying out to New York with a camera guy and interviewing him in his office. Then we did the b-roll footage. I have someone on my team named John McKenna, and his primary job is to go out and keep interviewing customers.

Over the last seven months, we’ve captured over a hundred video testimonials. Customers talk about the intimate details of what they do and how they couldn’t do those things with some of our competitors. They send the blogs to their friends, or they put these videos on their websites, and they’re actually generating traffic and getting leads. Over the last seven months, we’ve had over 40 customers speak on stage at events that we call Solve.

Lastly, in the last six months, over 12 customers have come to our headquarters to speak to Rackers. You know, if you’re second or third shift Racker, you kind of get—I don’t know if they’re cynical or not but I can’t imagine being up at 4:00 in the morning and being very happy about what you’re doing. Especially when the phones are ringing. But when a customer comes, the CEO and says, ‘Hey, that guy who is here at 3:00 in the morning to answer the phone is why we’re in business,’ it’s motivating. It inspires our workforce.

In closing, we still have a long way to go. But in the meantime, we’re just trying to create meaningful content and give customers really cool things to do that they want to be a part of.

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