February 2004

Customer-Centric Marketing: Overcoming the Barriers
By Penny B. Johnson, CBC, President and Founder, Edgewater Marketing Group

We've all read articles about the importance of leveraging customers, growing an installed base and accelerating marketing and sales cycles — but how does this really happen? And how can we manage it as the company grows?

It happens through effective and integrated customer-centric marketing programs. The most powerful way to accelerate your selling cycle, beat the competition, and grow your business is building intelligently on your successes, endorsements and proven results. No one else has your success stories — they are your strongest credibility. But all too frequently, the hardest part of creating a customer-centric marketing focus is overcoming internal barriers — resistance to change, and sharing control and direct contact with customers. This article focuses on that difficult and critical part — the internal processes needed for your competitive success.

Growth is Good, But is also Chaotic

When a company is tiny, customer activities are nicely handled by word-of-mouth and personal meetings. But when a company grows larger, it becomes impossible to continue to use that one-to-one process, given that you have multiple sales representatives interacting with customers and prospects. The result is that customer activities quickly get chaotic — take a look — I'm sure you'll recognize this:

The first issue (presented to Marketing by Sales) is usually a lack of "success stories" of any kind in the sales tool arsenal, and there will be a scramble to create one on any customer that won't sue. In addition, Marketing is caught between Sales requests to "deliver customer success stories NOW" and Sales resistance to providing good reference-able accounts. The result is that Marketing delivers some success stories, but Sales can't use them because they aren't the "right" success stories. (Sound familiar? Let's fix it!)

The second issue is usually the chaos resulting from a higher volume of prospecting requests for customer reference calls and site visits from multiple sales reps. When this happens, Sales usually strengthens control on who can call the customer, and this is done for the best of reasons — to avoid abusing good customers. However, this also means Marketing is held at arm's length for their requests for customer information. And without customer access, they cannot complete the kind of campaigns and tools which Sales needs. (Sound familiar? Let's fix this too!)

Customer-Centric Marketing: The Pieces

Before we move to the "how-to," you'll want to understand the four key pieces of customer-centric marketing. I've presented the functions separately, however in corporate organizations they may be combined in any number of ways depending on the corporation's size and structure.

1. Customer Reference & Relations Program: The core internal and customer interaction process, working with references to endorse your company. Serving as the neutral gatekeeper for Sales, Marketing and Service, it manages reference calls and site visits for qualified prospecting or up-selling into the installed base, as well as interviews and schedules for marketing activities.
2. Customer Marketing Program: Leveraging your customers as endorsements in your outbound marketing and communications efforts to sell more to your installed base as well as to new prospects. It includes joint campaigns as well as creating success story content for PR, marcom, direct marketing, etc.
3. Customer Co-Marketing Program: Transforming your customers into a channel for distributing your products. By carefully segmenting your customer base, there is almost always a segment that can be extended into service as a channel.
4. Customer Touch-Points Program: The overall relationship management process between your company and its customers. Every instance where your company touches your customers in any way is a "moment of truth". Compile those touch-points across the enterprise, analyze the quality of the relationship at each instance, prioritize needed improvements, and manage change implementation. This program is also a powerful vehicle to enhance the roll-out for new or revised branding campaigns.

CRR = Customer Reference & Relations Manager: The neutral gatekeeper inside your company who manages all reference calls and site visits for prospecting or up-selling, as well as customer activities for marketing needs.
CSR = Customer Sales Representative: A sales rep in your company who has a current customer.
PSR = Prospect Sales Representative: A sales rep in your company who has a prospective customer.
ES = Executive Sponsor: A VP or C-level executive in your company who is responsible for gaining reference-ability with, as well as resolving issues for, a particular customer

So what are the best internal processes? Read on..

I. Introduce the Customer to the Reference & Relations Program

First, please remember that Sales owns the customer. Second, don't forget that Service & Support knows the most about the customer. So regardless of how you ultimately set up your internal processes, you must keep Sales and Service informed and involved. In addition, you need an Executive Sponsor (VP or C-level) for each customer — this executive makes personal calls to resolve issues and to gain key agreements for reference-ability. The Customer Sales Representative (CSR) and the Executive Sponsor (ES) should determine together that a customer is a good reference account, and together these critical paired teams are responsible for delivering reference-able customers to the program.

Once a customer is approved as a "good reference account", the CSR schedules a 3-way call to introduce the customer to the Customer Reference & Relations Manager (CRR), and provides the customer contact information to the CRR for both business and technical contacts. The CRR introduces him/herself and begins to build the relationship so that the customer will know the CRR for the future. This starts the referral process before any actual request for a reference occurs. In general, customers will participate in the program if they "like you", and this relationship-building step is very valuable toward that end. As the relationship moves forward, the CRR tracks important personal things about the customer (birthdays, anniversaries, memberships, favorite sports teams, etc.) to further enhance the relationship.

When the customer is new, the CSR and CRR may ask for a "new win" press release via this program. When the customer has "gone live" (as we say in the software industry), the CRR calls and describes the reference activity program, and gauges the customer's willingness to participate in more activities. To encourage participation, the CRR reminds the customer contacts that they talked to references when they were a prospect. The CRR also determines the customer's corporate restrictions and processes on endorsements.

After this introduction, the CRR calls the customer as needed to request and schedule activities, and acts as the customer's advocate and communications channel for elevating issues for resolution. In doing this, the CRR knows when and why things happen for/with a particular customer, and is able to monitor a customer's on/off status for referencing activities. This good personal relationship is critical to a smooth and successful customer reference program.

The CRR must also build a close, trusting relationship with the Sales and Customer Service & Support teams, and, if possible, attend both staff meetings for updates on customers and plans. I have seen the best success for this program with the CRR physically located within, and reporting to, the Service & Support organization. This location gives the CRR daily interaction with the Service reps who know the status of customers and their issues (which affect reference-ability) from hour to hour. The reporting structure enables the CRR to act as a neutral customer advocate.

II. Manage the Customer Reference Activity

When a requested customer activity comes from the outbound Customer Marketing area, the CRR sets up schedules for, and may monitor, customer interviews and activities with Customer Marketing. This includes press releases, customer success stories or in-depth case studies, direct marketing campaigns, and other similar activities. In these cases, CRR works synergistically with Public Relations, Marcom, and other functions to secure the right customer for the activity.

There are two key milestones in the outbound Customer Marketing critical path where marketing needs the customer to say "yes" for their corporation — these are the "ask" and the "approval" for activities. The "ask" is the request for participation in an activity and is best communicated by the CSR or ES. The "approval" is the customer's final written approval to publish, and is best secured by the CRR, CSR or ES, depending on the mood of the customer.

When a Prospect Sales Representative (PSR) needs either a reference call or site visit for Sales purposes, the PSR sends a filled out request Form to the CRR. The Form includes the name of the prospect company, the type of site and functionality they want to see, as well as any other details that are pertinent. The CRR evaluates the Form and obtains any needed clearance, and sends it to the appropriate customer for agreement to participate. This proves to the customer that the prospect is not a competitor, and sets the context for the request. The CRR works with the customer and the PSR (who works with the prospect) to set up the schedule for the activity. The CRR and PSR then hold a conference call with the customer to brief them on what is needed, and to uncover any potential issues.

It is mandatory that the PSR and the CRR participate in the reference call and/or site visit as each plays a critical role. The CRR focuses on how the visit is progressing (listening to customer feedback and, overall, making sure the customer is comfortable) while the PSR focuses on closing the deal with the prospect. The customer should not be on a phone call more than one hour, and a site visit ideally should be two hours with a set agenda. Customers may also set up their own rules for calls and visits (for example: questions must be sent prior to the visit so that they can prepare answers.)

In addition, best practices dictate that your company set expectations and rules for customer reference calls and site visits. For example, you may require that your customer have 1) a person in management present to speak to the prospect for an overview and/or Q&A, 2) a person in the functional area who knows your product and the deployment, and 3) someone from IT to discuss the deployment (if technology product).

Once your call, visit or marketing activity has been completed, the CSR shows your company's appreciation in a tangible way, and the CRR sends a letter of thanks from the CEO. The CRR also fills out an activity report, loads information into the corporate CRM or SFA database, and sends the CSR a copy of the activity report on their customer. The continuous cycle of referral, ask, approval and feedback will become an efficient machine, feeding your sales cycle with references, campaigns and tools to help Sales close deals more quickly and efficiently.

III. Protect Your Customers from Overuse

When you have great customers, it is hard to avoid overusing them because they say such great things about your products and services. Every PSR wants to have them talk to their prospects, and outbound customer marketing wants them in many marketing activities. All these activities added together take a tremendous amount of time, and will be a burden on your customers. So in reality, you must carefully protect your customers and not "abuse" them or you will make them angry and lose them as references. And, from a marketing perspective, overusing a few customers, and excluding others, will make you an easy mark for the competition to say you don't have, and can't secure, many customers.

If a customer likes your company and/or the CRR, that customer won't generally object to giving references unless they are completely abused. If a customer doesn't like your company or CRR, that customer will object to giving references of any kind, regardless of how well your product performs.

Not surprisingly, if a customer is not getting good service or is having problems, that customer will object vigorously to giving references, and make terrible references, even if the problem is transient. Fix the problem first, then ask for the reference. Note that all customers have problems from time to time — so the CRR tracks these issues, monitors timing, keeps good records, and provides currently-satisfied customers for any reference activity.

If you must abuse particular customers with a period of intense reference activity, acknowledge that you know it is a real favor you are asking. Let them know you really appreciate their help, and agree to give them a time period (2 months or so) of reference-free time. A nice gift is also appropriate, depending on their corporate gift limits.

The CRR needs to send a list of over-used customers to the VPs of Sales, Service and Marketing each week so that they can quickly resolve any issues leading to, or resulting from, over-use.

IV. Consider Providing Incentives

Many companies consider using incentives to urge customers to act as references. While it is not critical to offer incentives, I find that they do help, especially when you need to ask a valued customer for multiple references. Following the logic from the section above on overusing customers: if a customer likes you, incentives strengthen the relationship and increase tolerance of "overuse," and if a customer doesn't like you, incentives are meaningless.

The incentives that really matter for the business-to-business relationship generally fall into two categories. First is giving them the top priority for fastest support and resolution when issues arise. Second in importance are discounts for upgrades and code modifications (for software buyers). Free, discounted or customized training is a close third in importance.

Other incentives are considered very nice, but not critical. However, free attendance to any user conference is generally expected for moderate-to-high reference activity. All customers on a Customer Advisory Board will also expect free attendance. Don't hesitate. Give it to them, It is a great investment.

Incentive "points programs" are nice, but are not of high value when building business-to-business loyalties with top management. These programs are much more appropriate for staff-level rewards if you need them, but be aware that they can be very complex and time-consuming to administer. I have found that providing appropriate corporate promotional giveaways for informal staff-level rewards is just as effective as any points program. This practice has low complexity, takes almost no time to administer through the CRR, helps to build your brand inside the customer company, and leverages the lower cost of the volume production for your existing corporate giveaways.

You should avoid awarding incentives with specific currency values (for example, $20K of training to be used at any time) since they can become a drag on the financial books when they are cashed in at a different or later time than expected. And remember that any high-value incentive may be used against your company by competitors, referring to such references as "purchased" in the hope of reducing your credibility. Naturally... that's what competitors do, right?

Growth, Chaos, Process, Success.

Getting to the "right" success stories is always a challenge. First, get agreement on what "right" is for Sales and create a checklist for evaluating accounts. Then make sure Sales and the Executive Sponsors secure good reference accounts that meet their "right" criteria. These accounts, combined with the CRR process, will give you the needed access to create the campaigns and tools which Sales needs. Once you have this foundation in place, add your creative juices, and you'll be off and running.

As companies grow with excitement and chaos, they must evolve and manage their internal functions and operating processes, and expand the "control and contact" relationships with customers so that the very growth that they want is accelerated. Build intelligently on your successes, endorsements, and proven results. Form strong customer relationships and internal synergistic partnerships. Customer-centric marketing programs ARE the key to accelerating your sales cycle, outperforming the competition, and growing your business.

Implementing a customer marketing program means shifting the corporate culture from product- to customer-centric thinking. See what four experts have to say on this topic in the February 2003 issue of Ask the Experts.

Penny Johnson is the founder and president of Edgewater Marketing Group, www.edgewaterllp.com, a consulting firm specializing in customer-centric marketing, public relations and communications. She would love to hear your thoughts and comments. Email her at penny@edgewaterllp.com.