Needless to say, your product or service offering lives and dies by its customers. While every customer counts, some customers count a bit more. Indeed, the amount of revenues a major customer generates for your company is very important, but so are customers who are willing to become a reference. These “reference customers” are an important asset that you must invest in building.A reference customer is one who is willing to vouch for your product or service. The reference itself can come in many ways, for example:

  • Quotes: provide a public quote, with an individual name and title, to be used in marketing collateral. The quote may be included in a press release, displayed on your website, or be included in a brochure.

    Customer testimonials

    Customer testimonials count

  • Media reference calls: participating in a discussion with an industry analyst, a media editor, or a blogger and sharing positive experiences with your solution.
  • Public speaking: presenting in a conference, a seminar or a webinar and talking about your solution and how useful and cost-effective it was for them.
  • Case studies: a write-up that describes the reason (i.e. problem or opportunity) that customer looked for a solution like yours, how they implemented it and what were the benefits they reaped.
  • Articles: provide content to a media editor or a blogger for an article they are working on, or even write and publish their own article.
  • Sales reference calls: take a call from a prospective customer who is evaluating your solution. Share with the prospect their realistic experience, and help convince them about the value of your solution.
  • Investors calls: talk to potential investors in your venture and explain why they believe your solution is extremely valuable for their business. Such calls help convince both outside investors, or your own corporate executives to put money, or allocate budget for your project.

These are but some of the use cases for reference customers. Yet they help illustrate how critical references can be for your product or service. A good reference can help bring in a crucial investment, seal a major deal, or achieve positive media coverage. Good reference customers are worth their weight in gold.

Reference customers are individuals, not companies. Sure, they work for companies, but at the end of the day a potential investor, a new prospect or a media editor would need to speak to a person. It is therefore important to identify the right type of people that can fill that role. First and foremost, your reference individuals must be able to articulate the value they see in your solution.  Since no product or service is without flaws, your reference person should be capable of balancing pros and cons and present your solution in an overall positive light. The last thing you need is a reference customer that glosses over the “half full” aspects of your solution and dwells on the “half empty” portion. It is therefore important to first interview potential reference customers, provide some coaching if needed, and determine whether they should be put in contact with those seek references – or not.

Not all reference customers are the same. They each have different communication skills and background: some may excel in public talks, other will do well in 1-1 conversations; some can talk about the business value, while others can dive into minute technical details. You should “match” the profile of your reference customer with the specific ask. For example, investors may wish to speak to a senior executive who can describe the strategic value of your solution to their business; prospective buyers may wish to speak to someone who can share the ins and outs of the technical implementation. You may need to identify multiple individuals per company that will each fill a different reference role.

Reference customers often need to fit a particular industry vertical, or geographical location. For example, you may be asked for a “banking” customer in Germany, or a “manufacturing” customer in China. As flat as the world may have become, customers from different geographies or industries still seek in-kind references. Ideally, your roster of reference customers should evolve to include representatives from different geographies and industries.

Sure, it’s great to have major brands on your reference customer list. Who wouldn’t want Fortune 500 companies they can call on for positive testimonies? First, it may take a while before you build a major brand into a reference customer. Second, not all major brands are willing to become a public reference. Some major brands will be willing to help with 1-1 conversations with an investor, or a large prospect. But you’ll often find their legal and/or marketing departments forbid employees from “going on record”, or providing a public endorsement. There are potential workarounds for these restrictions; for example, using anonymous references as in “large F500 financial services company”. So while you continue to work on getting major brands under your belt, don’t shy away from recruiting medium companies as references. It is sometimes better to have several vocal references from medium companies, than an anonymous reference from a major brand.

Companies often invest in building a “Customer Advisory Board”, to serve as a sounding board for product/service strategies and execution plans. Members of such advisory boards can be also groomed into reference customers. But keep in mind that providing valuable feedback and advice doesn’t necessarily make someone a good reference customer, and vice versa. Naturally customers who serve as positive references are a potential source for “constructive feedback” about capabilities and roadmap. But be careful not to solicit feedback only from customers who are positive about your product. Remember that your worse critics can often provide extremely important insights…

So how do you build a cadre of reference customers? Certainly not by frantically calling around when you need one! All too often, companies make the assumption that simply including a “reference clause” in a purchase agreement, and even tying it to a specific discount, they’ve just signed up another reference customer. Not so. Building reference customers is a task that takes time, resources and attention.

Counting on the sales organization to recruit reference customers is an option, but in many cases sales reps are busy “chasing the next deal” and can hardly spend the time required to groom a reference customer. More often than not, sales reps call on the product manager for help when they need a reference for a pending deal.

To complicate matters even further, references customers do change their “status” over time. To be a viable reference, the customer must be reasonably happy with your solution at the time the reference is needed. However, customer happiness may vary over time: a solution that worked well initially, may break down when the customer tries to scale its use; upgrading to your most recent release may have broken some functionality the customer deeply cares about; your champion within that company has left, and the new guy thinks that purchasing your solution was a mistake and plans to switch to your competitor. In short, references customers cannot be taken for granted, and must be attended to over time.

All the above leads to a straight forward conclusion: your company must define and implement a “reference customer program”. Yes, it can and should be done in partnership with the sales organization. But given the criticality, and the longer term attention needed, I believe it requires product management leadership. And as with any long term program, it is important to define the goals, the strategy and the execution plan.

Appoint a “champion” who will be accountable for building and maintaining your reference program. Set specific goals and the desired timeline to achieve them. Allocate budget for the program (e.g. travel expenses, thank-you gifts, etc.). Define the type of reference customers you need and their profiles, taking into account the industries and geographies you seek to cover. Build a “database” (even if its an Excel worksheet…) of existing and potential reference customers. Collect personal contact information, individual profile, and details about the use case for your solution. List any outstanding issues, and track the recent interactions with those customers. Make sure you regularly review the progress of your reference program, and the status of your reference customers. You need to know who’s happy and ready to go, who needs some attention, and who is facing challenges, that if aren’t resolved –  would turn into a negative reference.

Reference customers are often a critical success factor for a product or service. If that’s true for your business, then manage this activity as you would any other major task in your organization. As a product manager, you should consider the customer references database as an important “deliverable” which is part of your offering.