Wednesday, September 29, 2010

 Many companies have invested heavily and profited handsomely from Net Promoter Score. What's next for them? Many are focused on converting their customer "detractors" or "neutrals" into yet more promoters, which is fine, but it overlooks the tremendously valuable asset they've created: a growing cohort of promoters who are willing (eager, really) to recommend them to colleagues or friends.

Those assets can create value in a wide variety of ways, as our clients and other firms who participate at our conferences have shown. Here is some of the "low hanging fruit" that is ripe for the picking.

Promoters, particularly when organized into well-run customer reference programs, can help achieve:

Measurable gains in sales productivity.

When a sales person needs great references to close deals, the time she spends tracking down reference creates a serious productivity drain over time. One major software firm estimates that about 90% of its sales require references, and that it takes 5 to 7 hours for a sales person to find each one. Forming promoters into a well oiled customer reference program that can put the right promoter from the right industry using the right solution quickly at the sales person's fingertips can yield millions of dollars in productive improvements—and that doesn't even include impact on win rates.

Improved demand generation.

Intel estimates that demand generated from its Web-based marketing efforts will soon produce fully 10% of its overall sales—and gives primary credit to its customer reference testimonials (video backed up with informative case studies). This is a trend, not a fad. Customers are increasingly finding vendors on the Web, and the information they trust most is from their peers—that is, your customers.

Substantial improvements in branding or marketing communications efforts.

When an influential journalist needs a customer interview, or a high profile industry event is open to one of your customer speakers, or your marketing team needs a high impact customer video testimonial—there's no excuse not to have the name of one or more enthusiastic promoters at your fingertips to cover these. These opportunities can make the difference between great ongoing visibility and affirmation of your brand promise, or . . . silence about you in the marketplace.

 Improved marketing campaign results.

Understanding which customers are more likely to buy and which are more likely to refer (they're not always the same) can yield further dividends. A telecommunications and financial services firm doubled their returns on targeted marketing campaigns by segmenting customers in this way, and providing different offers to each.

Improved retention rates.

SAS Canada credits its vigorous customer engagement efforts—which include a combination of customer reference program, user groups, key account management and communities—with restoring its lagging customer retention rates from 88% to a near perfect 98%.

Improved early adapter rates

A mid-sized enterprise software firm's customer reference program recruits key customer references into product upgrade launches. The result has been substantial improvements to new product adoption.

Help in establishing C-level relationships and launching "solutions selling" efforts

One of the most lucrative and difficult transitions a firm can make is from selling products to mid-level technology users to selling solutions to senior decision-maker buyers. A mid-sized engineering software firm is making this transition and its customer references are playing a key role in the process. In particular, they help uncover the financial impact of its products on their businesses. That information is then used to develop higher, C-level relationships, and to roll out solutions.

These are just a few of many ways that promoters—properly organized and engaged with—can create value for your firm beyond merely purchasing from you. Which of these can be adapted by your firm? How many more can you think of?

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For more on this topic contact Bill Lee directly for copies of our White Papers on this subject.

Join marketing and sales executives from top global firms for the 2011 Summit on Customer Engagement, March 1-2, 2011, San Mateo, CA, USA. http://www.customerreferenceforum.com/event/

Learn about our Onsite Workshops: Building a Just-in-Time Reference Capability and Bringing Customers Into Your Social Media and Lead Generation Efforts. http://www.customerreferenceforum.com/services/onsite-workshops.php