3 Ways to Use References to Attract More Customers
Word of mouth is one of the three most influential factors at every step of a consumer’s journey, and it’s especially influential in developing markets.
McKinsey Global Institute
McKinsey reports that word of mouth is the primary factor behind 20 to 50 percent of all consumer-based (B2C) purchasing decisions.
The ever expanding online community, of course, is driving the heck out of word of mouth in B2C businesses.
Add to that the proliferation of social media, the “customer review” button on every e-commerce site, and services like Yelp, TripAdvisor, and Ohio’s own Angie’s List, and it’s easy to recognize that the impact of others’ opinions on how and what people purchase is only likely to grow.
Startups that are in the B2B space, take heed.
If this is true in B2C, it’s 10X true in business-to-business (B2B) sales. Here’s why.
Although B2B sales are driven by logic (mostly!) and quantifiable returns on investment (ROI), corporations are collections of people.
The managers and executives who are evaluating whether or not to do business with your startup want to know what others think—about you, about your startup, and about the solutions that your young company is bringing to the marketplace.
You can bet on it.
Word of Mouth in B2B Sales Depends on Having Referencable Customers
There are many reasons why having referencable customers is so important to any startup’s success. Here are three.
1. It takes customers to get customers.
That’s the glass half empty reality about starting up a B2B company.
On the other hand, while it can be unbelievably difficult to sign up that first customer, the glass half-full side of the picture is that there are divisions and departments of Fortune 1000 corporations in most every region (we are finding that especially true in Columbus) that like being early adopters.
Maybe it’s a company who wants to support new business starts in the community. Maybe the decision-makers are in a leading-edge technology industry themselves and enjoy proving (or disproving) something new. Maybe the corporation has a business problem that’s costing them so much money or causing them so much grief that they’ll try just about anything to find a solution.
If your startup has done the right job of assessing the market, talking to prospective customers, and identifying a provable value proposition, there’s a customer in your own backyard.
You just have to connect with them.
2. With startups, it’s all about proving early credibility in the marketplace.
Can you do what you say you can? When something goes wrong, can you fix it? What’s your culture toward your customers? Does your product work? Will the value proposition pan out?
You can answer yes to these questions—but where’s the proof?
Until your company builds up a track record and a reputation over time, the most affordable and effective way to get to your story out into the marketplace is through the voice and experience of your beta customers and early adopters.
3. Customers understand your value proposition better than you do.
In today’s cautious economic climate, corporate managers have to justify their operating and capital budgets line by line.
Customers invest resources (money and time) because they can link specific features of your solution to specific bottom line returns for their business—increased revenue, decreased costs, or a quantifiable competitive edge.
When customers take a chance on your solution, it’s not just because they like you and your team, or because it’s cool to be part of a startup’s success. They sell more, save money, or gain market share.
There is a ROI to doing business with you or they wouldn’t be writing checks.
Using References to Increase Sales
Startups don’t have advertising budgets. What money you do have for marketing has to go to your website and possibly some carefully chosen industry tradeshows or events.
So entrepreneurial teams have to figure out how to bootstrap business development. Reference-able customers are the secret sauce.
Here are three ways to tap into your customers’ experience to increase sales.
1. Specifically include Reference-able customers in your marketing plan.
Approach every customer relationship with the goal of creating a Reference-able customer. A “Reference-able” customer is more than a happy customer. A Reference-able customer is satisfied with your solution, can quantify benefits and is willing to talk with others about their experience.
Make referencing a gentle part of your agreement and relationship with beta customers or early adopters. Ask questions and write down what your customers say.
- “If we deliver results, may we use you as a reference,” is an easy way to start the conversation.
- “We’d like to document your experience and payback to improve our solution and service to you,” is a way to collect information for a future case study.
- “Why are you doing business with us?” is a great way to get to the heart of the relationship.
2. Give early customers a megaphone.
When you don’t have a lot of customers, you need the ones you do have to talk extra loud.
One of the most effective ways to let your customers speak for you is to have a case study section on your website. A case study doesn’t have to be a 1000-word white paper. It can be a paragraph or two about the way the customer uses your products and services.
Customer quotes create great sound bites. If the customer will allow you to quote by name, title and company, that’s great. If not, job and type of business suffice.
Consider these two examples from the “case study” section of Clarivoy’s website.
“TV Analytics has allowed us to understand how productive our TV buy really is. We are able to measure the productivity of different networks, dayparts and shows. We are really at the tip of the iceberg with the analytical data.”
Lisa Masariu-McCoy, Director of Marketing for Andy Mohr
Clarivoy accompanies the Andy Mohr quote with a quantitative statement about ROI, the client logo, and a downloadable case study.
A brief case study about how your customers are using your product or service to improve their service to their own customers can benefit you both. Offer it to them for their marketing purposes.
3. Be ever respectful of your customers’ privacy and confidentiality.
Always receive permission before using names or any specifics.
“May we use your quote (or this information) for marketing purposes? I’ll give it to you for review first.” Use the person’s name and the company name. If they aren’t comfortable with that, substitute a more general attribution: director of sales, Fortune 100 insurance company. Set the quote in italics.
If a customer and/or company agrees to be identified, great. If not, be flexible. You can talk in general terms about benefits with a more general attribution—director of sale, Fortune 1000 company. Just be sure to tell the truth.
This quote doesn’t include the specific information, but that doesn’t detract from its credibility.