Customers attract customers – this is probably the recognized most cost-effective form of advertising for your own company. Blessed are those who have friends who advertise for their suppliers or even act as salespeople. What sounds so simple has a number of pitfalls when it comes to implementation. With these tips you can take the step towards systematic implementation of recommendation marketing.
In addition to the sales partners , there are other important categories of so-called indirect customers. Although they do not buy, they are to be regarded as essential business drivers. This includes referrers and active recommenders. However, you should note the following points:
- There are critical sectors in which business relationships do not like to be disclosed, for example in the area of asset management.
- Many customers are reluctant to support a supplier. You don’t want to give the impression of being dependent on one supplier. Or they ask the question: “If I advertise a supplier, what do I actually get out of it?” Or they don’t want to draw the attention of competitors to their good suppliers.
- It is important to constantly monitor the reputation of your partners. If a page falls into suspicion in the media or other instances, for example due to corruption, environmental offences, default in payment, then the image of the referee could also be damaged.
- A customer’s willingness to provide references must not be overused . It would be as if the real estate agent were constantly guiding interested parties through the apartment they are still living in when selling a house.
- A referee (supplier) must also expect that the referee will reveal things that did not go so well in response to clever questions from interested parties.
- Projects that are still ideally suited to being advertised by customers today may no longer be suitable as references tomorrow : because the technology is outdated or because a new model generation is being advertised as the non plus ultra and you don’t want customers to announce it leave: “The previous products are great, can’t be improved”.
- And in general: If you want to include customers as referees in your sales strategy, you have to cultivate them. Many providers do without reference marketing because they have no marketing strategy to maintain and promote their reference providers.
Don’t let referral marketing fizzle out
Many providers only take a selective, opportunistic approach to their recommendation marketing. Sometimes one customer is asked, sometimes another. A CRM-supported reference history is not available. Sometimes the reference marketing then peters out and the website or catalogs contain ancient projects with products that are no longer up-to-date or customers who have already dropped out. It is not unusual for an uncontrolled playground to develop here for individual top sellers.
If we now want to bring more systematic into referral marketing, then we first have to differentiate between reference customers and reference projects. Strategic decisions need to be made on both issues. And both topics require their own functionality in CRM sales control.
Recommender is not recommender – the strategic alternatives
First, the supplier has to decide what forms of referral marketing are appropriate for their business. It is quite possible that several “intensity” forms are juxtaposed:
Passive reference support
The sales force, catalogs or websites name reference customers. However, a customer does not act on his own initiative. This form of naming references and specifying reference projects is common in the software business, for example.
Active reference support
Here, the customer agrees to make a recommendation for the provider to an interested party. A prospect receives a suggestion from a customer to contact the supplier.
The customer generally makes recommendations for his supplier and possibly even announces that the field service representative of the reference taker will contact interested parties. Active reference marketing requires good coordination between customer and supplier.
Reference customer sales
The customer is authorized to acquire potential customers of the supplier himself. In some sectors – such as advertised newspaper subscriptions – the acquiring referrers then receive commissions or advertising bonuses when the business is concluded.
Of course, not all products are suitable for all shapes. Likewise, not all customers are eligible for all shapes.
Control reference projects better
No customer will make himself available as a recommender if he is not himself convinced that the supplier has done a good job. So the first thing to do after the completion of sales processes or projects is to ask the evaluation question:
Have we satisfied the customer with our performance to such an extent that this project is suitable as a reference? Are we able to define the benefits that characterize our performance, as well as the customer requirements that we have met to a high degree, as well as the quality of our sales process that we are proud of? And then, based on those facts, ask the customer for recommendations and a reference?
Step 1 : Which projects are suitable for reference
The first step is to filter out those that are suitable as reference projects from the abundance of sales transactions according to defined criteria. Many companies make it easy for themselves here. They are based on order values or the colorful name and the strategic importance of the customer. But this is not sustainable reference marketing. Because it can never be ruled out that an interested party will ask reference providers what characterizes the vaunted service of a provider. It’s really bad if the seller doesn’t know what the customer is saying. A simple reference to customer projects is not enough. It must be possible to present solid arguments as to why the service provided for a customer is suitable as proof of one’s own strength.
Step 2 : Establish a post-evaluation of your customers
So after the completion of a sales process, a post-assessment should be carried out – ideally in connection with a post-calculation. This is a demanding task for product management; also to prevent the reference projects from being marked too much by the euphoria of sales. We recommend a reference parameter that can be set after or during the sales process and that links the offer or order to the customer. If this parameter is set, a combo box opens in which the (default) technical and commercial strengths that upgrade the sales project to a reference project are documented with a simple click.
The CRM Advantage: If I search for a specific technical advantage, it will filter out all customers who have benefited from that advantage. If you filter out a customer, you can immediately see whether and which reference projects are associated with this customer. This results in an interaction between reference projects and the customers who are suitable as recommenders.
Step 3 : Lead reference partners better
The systematic reassessment of successful sales projects should make it clear which customers can be considered as reference providers with which projects or sales processes. Now it should be noted: There is a factual level, represented by the sales suitable as a reference, and a relationship level, on which political questions are relevant. Because it may well be that you have been able to identify an ideal reference project, but the customer is not or currently not suitable for being asked to be a reference provider. There can be several reasons for this:
- Some major customers refuse to provide references for political reasons . Often only a reference to the customer is possible in the sales brochures – although even that is often excluded for reasons of confidentiality. Take a look at how many consulting firms or software companies list BMW, Mercedes or Lufthansa as customers in their sales documents.
- A sales process went very well. However, the customer takes certain hygiene factors , such as high performance, for granted. That alone gives him no reason to recommend the supplier.
- A sales process went very well, but there were always problems on a human level . It is then too risky to ask this customer for recommendations.
- A sales project may have gone well, but the customer keeps making repeat purchases . If these are not under constant observation, it is possible that a customer suddenly becomes dissatisfied and deviates from his previous good supplier recommendation.
- The customer has economic or corporate-political problems , so that he could pose a threat to his own image as a referee.
Step 4 : Map the rating in the CRM
After viewing the suitable reference projects, the assigned customers are to be examined and evaluated according to these critical aspects. After that, a parameter could be assigned in the CRM that allows systematic control of recommendation marketing:
A = absolutely win as a referrer
1 = customer could be won as an A recommender
B = observe customer, could be considered as a recommender under defined conditions
2 = customer was under observation, the conditions were met to win him as a recommender and he has agreed
C = customer is not considered as a referrer, although at least one successful sales project would be an option.
D = The customer is generally not eligible for reference marketing. Reason: see CRM customer history.
All customers parameterized in this way should be checked at least once a year, for example as part of the annual sales planning. Is the reference parameter still correct? Which completed projects are to be evaluated when updating the customer reference parameter?
Companies with strong marketing and differentiated recommendation marketing can also parameterize the strategic alternatives described. This creates a foundation for recommendation marketing that is always up-to-date and tailored to customer values.
The following applies: friends must be well cared for.
Referral Marketing: An Opportunity for Win-Win Relationships
Referral marketing must be strategically well thought out and cleverly parameterized for a CRM implementation. For both sides, supplier and customer, there is then an interesting added value area that can also have an impact on customer or partner qualification. For example, the highest customer value class “friend” should only be assigned if the partner or customer is willing to provide reference marketing.
For marketing and sales, this results in an exciting topic for customer negotiations. Because if it is possible to win customers for reference marketing after excellently completed projects and sales processes, then good, long-term, prosperous win-win relationships can grow from this. Incidentally, this is an ideal stimulus for the provider to remain at the top of projects and relationships in the long term. You are proud of your references. But they also justify a constant claim to satisfy his customers.