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I recently attended the customer reference forum, which was a great event. It has been awhile since I was directly involved in managing customer reference programs, but let me tell you that this is big business – over 150 employees dedicated to the effort at Oracle, over 50 at SAP, divisions at Microsoft having 8 figure budgets just to write reference stories, some large companies having Customer Reference Officers, etc.

As I immersed myself into the issues facing customer reference managers, it dawned on me that like many other marketing processes, this one is badly due for an overhaul.

Here are two takeaways from the conversations I had at the event.

Customer Reference Programs have to be focused on the buying process, not the sales process

Most customer reference programs are standalone programs that are squarely focused on supporting the sales process and specifically the sales organization. Sure, they sometimes support PR and product management efforts as well, but those are all company-centric processes. What companies need to realize is that people increasingly buy products based on what peers, opinion leaders, and friends are telling them, and not information coming from their company. So the customer reference program needs to be focused on the buying process, and not the sales process – it needs to become customer-centric, and not company-centric.

It also needs to be fully integrated with any word-of-mouth (WOM) activity the company is trying to foster. Since customers who are acquired through WOM are much more profitable than those acquired by traditional marketing programs, companies should make that a high priority. And with customer references being the biggest asset in such efforts, the customer reference program needs to move front and center to those efforts.

The Customer Reference Program process needs to be turned into a social process.

As buying decisions are increasingly made based on information that does not come from your company, moving forward you will need an increasing number of customer references – not less. And that increasing number is not linear, it’s exponential – those with the highest number of people buzzing positively about them in the marketplace will win. Unfortunatelly, and considering historical marketing budget trends, the budgets needed to scale your customer reference programs will not allow you to scale those programs to the point where you need them. In order to reach an acceptable scale you will need to turn the whole process into a social process – one in which customer references, other employees, and non-customer references or even non-customers can get involved. You see, there are many more people who are buzzing about you than you have in your customer reference database. And there are many more employees talking with happy customers than you have in your customer reference department. You need to get them involved and let them help one another tell a better story in the marketplace – their story that is, and not yours.

So in summary, Customer Reference Programs may be more important than ever, but they need to move to the center of all marketing activities and need to be focused on the buying process, not the sales process. And in order to scale the program to where it makes a real difference, you will need to turn it into a social process.

Let me know your thoughts.

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