At its best the selling life can be great fun, full of action and accomplishment. At its worst it can make pushing on a string look like the essence of productivity.
As a practitioner, the thing you either love or hate about selling is change. As a market emerges and matures, the techniques that once worked well cease to be effective, forcing a good salesperson to seek out better ways to get the job done. For example, in an early adopter market customer references are not very important. Early adopters know that they are first, and they buy business technology solutions to be ahead of the curve. As a result, references do not play a significant role in the process. But as a market matures and more conservative prospects enter the picture, references become important.
People disagree about the proper time to introduce a reference into a sales process. Sales purists say that prospects need to earn the right to speak with a satisfied customer, perhaps by introducing the sales representative to others in the purchase process. That’s a fair point, and certainly no vendor wants to expose a great customer to an endless stream of tire-kickers. But as markets age and leaders become established, it becomes harder for new companies to be taken seriously, and the need to use references earlier in the sales process becomes more acute.
It was a surprise to me to learn that reference management is becoming a serious pursuit at many large organizations. This is not unlike investor relations, public relations or analyst relations: The objective is to maintain positive relationships with a key constituency, accessing it when appropriate. Usually a person or small group is responsible for tracking the availability of a company’s best customers as well as protecting them from the burnout that can happen when sales reps go to the well too often.
Not surprisingly, it can be a big deal for a rep to get permission to access a reference customer, and some sales forces have already built a step into the sales process for this purpose. A prospect must reach a qualification milestone or a deal must cross a specific threshold before a reference can be used. Very quickly, you can see that the sales force with the best reference management group is likely to be the most successful.
Alternatives to Live References
If providing a reference means a live phone call, a vendor faces the problem of overexposing the reference customer.Burnout follows overexposure, because individuals who didn’t mind doing an occasional favor find their time being overbooked for non-business related activities. But there are emerging companies that can help vendors avoid this problem by recording a one-time interview with a reference customer and then making an edited version (no one is going to listen to the raw tape) available on a password-protected Web site.
Recording and posting reference interviews helps a vendor move a sales process along in several ways. Since the references are recorded, the number of uses does not matter, so a vendor can relax the qualification restrictions on reference use. That means introducing references earlier in a sales cycle, especially when later adopter prospects really want to hear from a reference customer before entering into serious discussions.
As with any recording, a vendor can track and analyze use. For example, a vendor can be notified when a prospect accesses an interview and then make a timely follow up call. Even more importantly, when a prospect does not access an interview after a reasonable time, the rep can check to determine if there is a problem or if interest has waned. In either case the sales process can be adjusted accordingly and the forecast can reflect the reality of the situation rather than the rep’s assumptions.
I know of two emerging companies in this space, References On-Line and Point of Reference, and each provides solutions to the old problem of managing references. References On-line is the godfather of the market and the original innovator, while Point of Reference is in hot pursuit. What’s interesting to me about both companies is that they operate as hosted services across the Web. They do all the work of organizing the interviews, editing the results, and posting the final product on their secure sites. They offer great examples of what I call “Web-Necessary” applications — solutions that leverage the Internet to deliver solutions in new niches where conventional solutions would not be as effective, if they worked at all.
Reference management has all the markings of an emerging market. There is awareness of the need at the highest levels of some very large companies, multiple competitors have entered the market, and the industry is planning a conference in Phoenix this winter. After a prolonged period of cutting costs and weathering the storm, it’s good to see these signs of life in software again, and it is especially good to see someone take a new angle on sales automation.
Denis Pombriant is founder and managing principal of Beagle Research Group. An influential thought leader in the CRM industry for more than five years, Pombriant researches emerging trends in CRM and publishes research reports that can be found on the company’s Web site and on other influential Web sites in the CRM market. In 2003 CRM Magazine named Pombriant one of the most influential executives in the CRM industry. He is also quoted extensively in Paul Greenberg’s CRM at the Speed of Light, third edition. His latest report is titled “KeyFindings: CRM Market Events, Observations, and Analysis 2004.”