Word of mouth is an important ally in your marketing efforts. It can help you overcome skeptical prospects and increase customers’ preference for your products more quickly and effectively than either advertising or PR. It costs little to generate, yet it reinforces customers’ commitment and strengthens their relationship with your brand. But if your product or service has become your customer’s secret sauce — putting them in a position to outperform in the marketplace — then spreading the word may appear to risk diluting their competitive advantage.
In a recent post for Harvard Business Review(hbr.org), Utpa M. Dholakia, a professor of marketing at Rice University, offers these strategies when satisfied customers refuse to provide references:
Explain the product’s network value. Many B2B products become more useful when most players in the industry adopt them. Take price-optimization software: Until the majority of companies in an industry use it, the industry cannot price intelligently as a whole. Make the case to your customers that providing references will hasten industrywide adoption and increase the product’s value for everyone.
Extol reputation benefits.Gaining alpha status within an industry has many benefits. Risk-averse customers will seek out the company’s products; employees flock to work for it; and vendors and shareholders give it more leeway in downturns or crises. When asking for a reference, marketers should emphasize these benefits. Help a reluctant customer realize that providing useful referrals will burnish its reputation among peers and constituents and bring tangible benefits.
Point out the perils of remaining a lone wolf. With a larger customer base, you, as the vendor, have greater motivation (and resources) to provide education, services and product improvement. You can let it be understood that without a large customer base, you might even reduce your investments in the product.
Offer incentives for providing a reference. Depending on the product and economic value involved, various forms of incentives may be given for a reference: subsidized maintenance or training programs, exclusive features or services, or the promise of first access to the product’s next generation. But beware: Once incentives are offered, customers may become less enthusiastic about performing such actions voluntarily in the future. Offering incentives may also change the economics of reference-based marketing programs by making them pricey, reducing their power and effectiveness.
