The Value of the Business ReferenceDavid Goyette
The Study • Defining, Measuring, and Managing Business Reference Value by Kumar, Petersen, and Leone. • Published in the AMA Journal of Marketing in January 2013 • Defined the reference characteristics valued by prospect accounts and their ability to positively influence these prospects. • The factors chosen and valued by sellers and prospects are relatively the same.Relationships Matter.
Influential Factors Identified 1. Client Size – Defined by both number of employees and annual revenue. The more employees and revenue, the higher the value of the reference. 2. Length of Client Relationship – The longer the client has been with the seller firm, the higher its reference value. 3. Reference Congruency – The more similar a client reference’s products/services, industry, and role are to the prospect, the more valuable the reference. 4. Reference Media Format – References that use richer media formats are more valuable. Video testimonials > Audio testimonials > Written testimonials > Case Studies/White Papers.Relationships Matter.
Variation to Business Reference Value Client Size & Unaccounted for Length of Effects 29% Relationship 31% Other Accounted for Effects 9% Reference Media Format Congruency 17% 14%Relationships Matter.
The Take-Away 1. Ditch the Boilerplate Reference List • Choosing the right references has a significant effect on sales outcomes. If the client is asking for references, congratulations, you are in the final stages of the sales process. • Don’t use the same-old reference list – chose your references carefully. • Save yourself the embarrassment of providing a reference to someone who has left their job or who has lost love for your firm.Relationships Matter.
The Take-Away 2. Go for Alignment • Choose references that have something in common with your sales prospect. • Similar products and services have the greatest effect on reference value, followed by similar industry and similar organization roles. 3. Bigger is Better • Reference value is positively affected by the number of employees a reference has. • Revenue has a similar effect.Relationships Matter.
The Take-Away 4. We Go Way Back • Client references with longer tenures are more valuable as references. • This is valid to a point however, as clients with very long tenures may have institutionalized the seller’s product and are not aware of other options available. • Chose reference clients that have had time to integrate your product and service successfully and have lots of enthusiasm to share about your firm. 5. Put Your Best Foot Forward • References delivered using rich media have the greatest impact. • Use the richest media available – not only is it the most effective strategy, it also allows you to exert some control over the message.Relationships Matter.
The Take-Away 6. Keep the Fires Hot • Good references are a valuable asset – keep them happy. • Keep the lines of communication open • Take the time to quickly brief your references for each prospect that may contact them. • Most reference clients consider it an honour to be reference, not a burden. Don’t be shy in asking for references.Relationships Matter.
References Kumar, V., Petersen, J. A., & Leone, R. P. (2013). Defining, Measuring, and Managing Business Reference Value. Journal of Marketing , 77, 68-86.Relationships Matter.