Customer Reference Program value – A metric that will resonate with executives

In a recent client conversation the topic turned to proving the value of the program to executives. The “revenue influenced” metric is one of the better ways, but admittedly, it isn’t 100% indisputable. I was reminded of a Customer Reference Forum event a few years back in which SAP presented on Net Promoter. There was a pretty clever connection made between Net Promoter scores and how references factor in to a decision to purchase—and ultimately the value of the customer reference program.

The SAP reference team began with the Net Promoter question scores from their annual customer satisfaction survey. Each customer’s identity was known, so it was easy to find out who was a “promoter” and who was a “detractor.”

They compared that information to the list of current reference program members. Surprise! There were actually some detractors on the list, and a whole lot of promoters not yet in the program. They set out to convert detractors to promoters wherever possible, or purge them from the list; and simultaneously began to recruit the promoters.

Here’s how this ties into the decision to purchase. One of the satisfaction survey questions asked the customer to rank, from a sizable list, the factors that had the most influence on their decision to choose SAP.

The SAP reference team was able to move the “customer references” factor from near the bottom of the list (of abour 50 choices if memory serves), to the top 5 within a couple of years. This makes sense considering the concerted effort made to raise the overall quality of the customer reference membership by either repairing/purging or recruiting based on Net Promoter scores.

Bill Lee (Customer Reference Forum) and Jim Lenskold (Lenskold Group) discussed this story on MarketingProfs a while back (find the section titled: “SAP’s Experience”). But this is a timeless concept, yet we don’t see many companies doing it. If you aren’t familiar with Net Promoter, this post will act as a good primer as well. Enjoy.

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