The Web 2.0 environment and business-oriented “social media” promise to connect buyers and sellers in support of reference selling. In theory, these Internet applications could provide automated processes for reference generation, with little effort required of the sales or marketing organization.
At first glance, a central data repository with easy to use, open processes seems a good way for customers and buyers to connect and share their experiences. However, this approach misses an essential element in reference selling: the personal relationship. Most customers who are willing to provide positive references are motivated by exchange of value that is best negotiated face to face. For example, the vendor might provide discounts, free products, display of the client’s brand, or other value in exchange for a reference. These value elements vary from customer to customer, and perhaps from day to day. In most cases, obtaining a quotable reference (meaning the customer is willing to provide their name and title) depends on a personal relationship.
Getting a customer to become a reference is very much like getting a prospect to become a customer. Sales people must build a trusting relationship with the prospect and provide an exchange of value in order to close a deal. So it is with customer references. For example, what benefit is it to the CEO of Coca Cola to provide a reference for Oracle? How does that propagate their brand? How does it benefit Coca Cola’s CEO and its shareholders? When a reference is requested, there likely will be a negotiation for the exchange of value, much like closing a sale. As in sales, impersonal social media are unlikely to replace face-to-face negotiation. A trust relationship must exist before that negotiation can take place.
After 10 years in outside sales and 9 years in the reference management business for large enterprise software companies, I have seen many organizations try to automate the reference process. After some time, they return to having the sales person leverage their relationships with customers. While social media will be a fantastic data repository and information exchange medium, it simply won’t solve the fundamental problem of generating references: how do we get customers to talk publicly about their positive experience with our products? More importantly, how do we get them to agree to authorize them?
The answer lies in relationship.
Most customers are not hesitant to share negative experiences with products or services because they feel they get value from doing so… some kind of justice. However, when it comes to a positive endorsement, most high level, authorized reference providers either expect value in return, or give them as a personal favor to the sales person. Social media will not be able to circumvent this very critical piece of the reference selling process.
So, while social media will be a valuable mechanism for managing the data related to the customer reference process, much like CRM tools for the sales process, the reality is that it simply will not generate references, much like CRM will not close a sale.
