The Value of the Business Reference
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The Value of the Business Reference David Goyette
Transcript of The Value of the Business Reference
The Value of the Business ReferenceDavid Goyette
Relationships Matter.
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 & Length of Relationship 31%
Reference Con-gruency 17%Media Format 14%
Other Accounted for Effects 9%
Unaccounted for Ef-fects 29%
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-Away4. 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.
