We've completed several client engagements already this year, many of them around metrics and assessing business impact, and around aligning reference programs with sales organizations and revenue. During those, and many others, we've seen - and many of you have echoed - the reality that it's a real challenge to get sales to adopt and use the program. How many times have you heard: "We need a success story that does this" and "We need a centralized program that manages references"? Yet invariably, those stories do exist, as does a central program. So what's the problem? Awareness. Awareness is a real challenge; one that can be overcome through value-add communication and education vehicles into the sales force. What we've uncovered - and what you can affect today - is what we've internally coined Cape Fear. It's the fear that sales reps have about using customer reference content, videos and case studies. Why though? Why the fear? As we ask more sales reps, as we ask Tim Misuradze, our own senior consultant and former sales executive, and as we ask our delivery team to dig into client success story inventories, we find that sales reps don't tap into the output of customer reference programs (namely success stories) for three common reasons: 1) They don't know how to effectively leverage reference customers and content during the sales cycle. 2) They're unaware that the information and reference relationships they're looking for exist and, in many cases, that there is a formal program. 3) They don't need your help because they're superstars who can sell igloos to Eskimos. (This is rare, of course!) If you're reading this blog, you probably have a plan in place to identify and address some of these issues. If not, let's talk.... And as if those three challengers to adoption aren't enough, we continue to regularly see one more: the "lightness" of success stories due to the limitations imposed by customers' PR and legal departments. In many of our engagements and meetings with sales professionals, we're finding that reps are afraid of their lack of knowledge about a specific customer being "exposed" by questions that inevitably follow when a prospective customer reads a success story or watches a video. Imagine a successful sales meeting during which a set of ROI numbers are put "out there" on the screen, or during which a really sexy video is shown. It's all well and good - that is, until the prospective customer starts asking questions that the sales rep can't answer; until the prospective customer starts asking for information the rep doesn't know how to obtain. So consider these things when building content, delivering it to sales and evaluating its impact. We've worked with our clients to address and overcome the first three adoption challengers, but are hearing more and more sales reps talk about being "exposed" and about the lack of context and direction in how to successfully enable them to use reference materials. If you give sales reps customer content without background intelligence surrounding it, adoption will be affected. Companies in every industry are trying to find ways to reduce the sales cycle - customer reference programs and content are charged with doing so. However, if the treasures you uncover and cultivate are never used, you miss an incredible opportunity. While we're finding that awareness is a common issue, what's worse is that we're finding a reluctance among sales reps to use reference tools because they fear those tools will expose them - make them naked - and actually extend or elongate the sales cycle. Promise Phelon, Partner promise.phelon@phelongroup.com

My thanks are long overdue. I invited acclaimed author, marketing guru and colleague Seth Godin to speak to our Customer Reference Council. Seth introduced concepts from his book Survival is Not Enough and shared his perspective how important innovation and risk-taking are for individuals leading the reference charge. Seth, thank you!!! And thank you to the Customer Reference Council members who are generously sharing their time and expertise to collectively expand the knowledge and thinking around this unique niche. We are grateful to have such an experienced group from companies such as HP, Sun Microsystems, EDS, EMC, Amdocs, i2 and Motorola participating. Promise Phelon, Partner promise.phelon@phelongroup.com

We recently spoke with Ken Darby of HP's Customer Reference Program about HP Reference Edge - the reference team's education program targeted at all customer-facing staff. Read on to learn how this innovative training is helping to create a culture of customer stewards. TPG: What is HP doing to elevate reference customers within the company? Ken Darby: HP has always had a focus on customers; our reference customers in particular because they impact sales effectiveness by accelerating the sales cycle. They're also critical to our marketing messaging. In the last few years we've developed a program, specifically for customer-facing staff, that communicates how to engage customers in a way that leverages them as assets and honors the mutual benefits of our relationship. The HP Reference Education Program, also known as HP Reference Edge, formalizes those rules of engagement. TPG: Why do you think it's important to elevate reference customers? Ken Darby: Successful customers mobilize our competitive advantage in a market that has new entrants every day. Highlighting our successes through collective customer voices that speak of the real value of HP products, solutions and services gives us a strategic advantage over our competitors. With HP Reference Edge we have a collective foundation from which our sales and marketing professionals, product developers... basically anyone who interfaces with customers... may find a unified story to share and engage customers to help tell the story. TPG: Why did HP decide to do Reference Edge? Ken Darby: We really wanted to foster a culture of customer stewards within HP, meaning that all customer-facing staff feels responsible for cultivating very strong relationships with customers. HP Reference Edge is a way for the company to demonstrate the enormous benefits of customer stewardship, and to train our team on specific tactics that allow us to foster and leverage those relationships. So not only did we want to develop a program that builds a company of customer stewards, we also wanted to create consistency in our interactions with customers. In respecting our audience, we focused on a few guiding principles. First, Reference Edge needed to deliver easily accessible, self-paced courses that are available anytime, from anywhere. Second, the courses needed to be broken into high impact content modules no longer than 15-20 minutes to honor the professional development time constraints of customer-facing professionals. With these two principles firmly in place we've successfully activated Reference Edge. TPG: How is what you're doing innovative and unique? Ken Darby: Our program has really adopted a much wider perspective on reference customers in that we view them as corporate assets rather than as tactical tools. So instead of focusing on success stories, our team has become the internal resource for how to really leverage HP's relationships with customers. The actual success stories and case studies are one aspect of it, but HP Reference Edge is a dedicated effort to help all customer-facing staff engaged with those very important customers. Also, we worked very closely with the HP workforce development organization, and segmented the courses to provide customized learning for each unique audience. TPG: Who are the key audiences for this training? What's your desired outcome? Ken Darby: Each course module is targeted to a specific audience. At the highest level, the audiences can be broken into three categories-sales, marketing and customer reference program professionals. The exception is the first course, which is applicable to all employees at HP because it focuses on the strategic value of the customer relationship. I'd say there are three desired outcomes. The first is to build a company of customer stewards; the second is to create consistency in our interactions with customers; and the third is to develop our collective competencies with the most efficient time investment possible. TPG: What are some of the results? Ken Darby: The first course, Impact of Customer Leverage, rolled out at the end of January. In just the first week we had quadruple the number of participants that typically sign up through HP workforce development. We've continued to roll out courses; in fact we'll be releasing our third course shortly and the fourth is currently in production. TPG: What role did the Phelon Group play in supporting this effort? Ken Darby: The Phelon Group is a strategic partner of the HP Customer Reference Program. I wanted to tap into their expertise in customer reference programs, their perspective on Customer Leverage and their experience with e-learning to build out a comprehensive curriculum for our three audiences, to develop courseware and to support the implementation and rollout processes. Today, we're working together to measure the business impact of our program and to expand the program to Europe, Asia, Middle-East Asia and Latin America. TPG: What have been the most important lessons you learned? Ken Darby: First, that people are very hungry for this type of training. HP Reference Edge puts a formal framework around how to engage with customers; the interest from employees has been overwhelming. We're just about to roll out the fourth course and there's already a waiting list of participants. Second, we really benefited from engaging The Phelon Group to help develop the subject matter and morph it into an e-learning experience, which was critical to adoption. And third, we learned that working with the internal development group to use the existing training foundation was essential to wrapping HP Reference Edge into the overall training offerings. Do you have a story to share about an innovation in your reference program? Let us know! Promise Phelon, Partner promise.phelon@phelongroup.com

GM recently launched a program called the GM Proving Grounds. As part of it, GM takes 100 or so of its cars on a "road show" during which potential customers, at various show venues, can test-drive GM cars in a no-stress (no salesperson) environment. It's just the customer, a GM rep, and a GM car. Trouble is... an event like this has a very limited reach, unless you know how to leverage it. GM did just that through www.gmprovinggrounds.com. There, prospective customers can explore GM cars online and, best of all, see clips of people who attended the live event. You might think the clips are nothing more than your typical video testimonials, but they're not. They're real. They're not over the top. And for those reasons, they work. Many of the clips capture regular people behind the wheel sharing their thoughts about the car. Rather than scripting them to say, "Wow, this is the best car I've ever driven!" GM lets the people say what's on their minds. You hear prospective customers say things like, "I'm surprised this car has this much power." And, "I've never bought a GM car, but I think I might test drive one the next time I do buy." GM's not only using video effectively, it's also using customer leverage effectively by transforming a limited-power B2C one-to-few event into a powerful one-to-many event; something that should provide much food for thought for all B2B companies as well. Steven T. Nicks, Partner steven.nicks@phelongroup.com

...Just finished a few-week-long U.S. and U.K. whirlwind tour during which I met with almost a dozen clients and a few prospects. Although it has meant eating more hotel meals than I prefer, I learned some very interesting things about reference programs that are doing well. Actually, it's what I would call best-practice characteristics of successful reference leaders. These characteristics are often hidden beneath the surface of a customer reference program, yet they're qualities that drive program success. Successful reference leaders: 1. Are adept at treating sales as a client and partner. In many cases, these reference pros have in place a systematic way to gauge sales satisfaction and alignment. In my mind, they do their best to implement a 100% YES policy that enables sales to be more effective, and they're very clear about what they need sales to contribute to ensure the greatest referenced output and to protect customer relationship. 2. Care about best practices but, in many ways, have built a highly-customized program; one that's sensitive to their company's market, customer base and sales environment. 3. Do the back-office stuff well. Even without reference management systems, these reference leaders know and track their investments and assets. They also have critical processes in place such as those for customer content approval, internal content reviews and collaboration, stakeholder management and integrated planning, customer relationship management and burnout avoidance. 4. Understand the need to measure impact, not just performance. 5. Are open-minded and interested in evolving the program versus continuing with "winning strategies" and standard approaches. They're sensitive to the fact that a reference program can quickly hit the point of diminishing returns. There are many companies out there that claim to be "doing fine" in respect to referencing. In most cases, however, I've noticed that it's those companies that refuse input and insight that often are those that also need the most support. 6. Put the customer in the center of the program... `nuf said! 7. Partner with strong vendors. In most cases, successful reference professionals - those with successful programs - work side by side with vendors that self-manage; vendors that keep up-to-date on technology and market changes; vendors that do their best to increase their clients' return on reference when and where possible; and do their best to offload many of the tactical, non-core activities so that the reference team full-time resources are maximized. Today, most reference pros I know are moving from favoring the one-man shops to favoring organizations with an international presence, broad experience and a team capable of building long-term partnerships. 8. Have a clear vision about the future of their program and their program's current charter; they can also articulate where their program's boundaries are - where it begins, where it ends and, most importantly, where the gaps lie. Promise Phelon, Partner promise.phelon@phelongroup.com

Thank you to all of you who have sent emails about how your reference incentive initiatives impact relationships with your customer advocates and how incentives are perceived by prospects and other influencers. It took us over two years to write this white paper. We worked with six different companies to understand how and if they would use incentives. We worked with an equally large group to dismantle or realign an existing incentive initiative. The main take-away from our new white paper is that this is an incredibly important decision that could affect your company's reputation, relationship with customers and ability to build a solid reference program pipeline. Evaluating Reference Incentives: From Pay-for-Play to Advocacy and Trust Download your free copy today. Please continue to send your thoughts, insights and stories directly to me at promise@phelongroup.com. Promise Phelon, Partner promise.phelon@phelongroup.com

In the past few years, reference programs have shifted across the company - from sales operations to marketing, from marketing to public relations and now, in several cases, from marketing and public relations back to sales and sales operations. Through our 2005 Customer Reference Program Benchmarking Study, we learned that nearly 60 percent of customer reference programs are housed in corporate marketing, communications or branding operations - down from 87 percent in 2004. Also in 2004, zero percent of reference programs (that’s right - none) were housed within sales; this year, seven percent are. A few weeks ago, I spoke with a VP of Marketing at a large, branded enterprise-technology company. We talked for several minutes about the sales reference program she inherited earlier last year, one that had been a success for several years within the sales organization. When the program moved from sales into her larger marketing organization, its team was a lot less successful than it had been; we spent several minutes discussing the "whys." In a nutshell, it was because structure does affect strategy. It also affects success. If your program, or one you inherit, moves out of sales into marketing or vice versa, expect things to change. For instance, we worked with a program - one with great processes and a powerful reference model and rules of engagement - that had been moved from corporate marketing to sales operations. The team found that sales reps were MUCH more reactive and valued having "reference agents" ready 24x7 to fulfill their requests. Suddenly where they spent most of their time before - managing stakeholders, planning and calendaring, nurturing customer relationships and gathering customer intelligence - was less valuable. The program evolved into a reference hotline and a place from which to get RFP support. It was, however, actually perceived as more successful because the newly-located program helped to harpoon some of the quarter’s largest deals, which sales saw as extremely value-add. This is but one scenario; there are as many possible outcomes as there are companies. If your program does move to a different group or division, step back to reevaluate its guiding principles and ensure that the same exist in the new organization. If not, find out how to be successful in your new environment - and then realign. Promise Phelon, Partner promise.phelon@phelongroup.com

If you’ve worked with me, you know that I read everything. I recently came across a powerful report, written by CRM Guru Bob Thompson, titled The Loyalty Connection: Secrets to Customer Retention and Increased Profits. We’ve posted this insightful piece on our CRP Knowledge Center, and recommend that you download it from there right now. In the white paper Bob Thompson, who is also editor of CRM Guru and someone I really respect and admire, talks about how the sheer need and easy-to-imagine benefit of creating loyal customers is missed because some executives lack insight about what’s really required to build and support customer loyalty initiatives. Bob tells us they also lack insight about the payback when such initiatives are done well. My favorite section is "How to Retain or Win Back Customers." In it, Bob shares how the principles and practices espoused can be directly applied to managing your reference customer relationships. He also talks about building a compelling business case and shares approaches and concepts you can leverage. Overall, The Loyalty Connection is a great read; Thompson’s writing style is very easy to get through and understand! Promise Phelon, Partner promise.phelon@phelongroup.com