The benefits and harms of reference visits

My company develops, sells and implements software products in the field of ECM, and more specifically the system of electronic archives and libraries . Given the complexity of the decisions being made and the scale of some projects, potential clients periodically request facts confirming the success of similar projects for organizations in the same industry. Variants of such confirmations: articles in specialized publications, press releases, letters of reference, telephone conversations, reference visits. If there are quite a lot of recommendations for writing letters and conducting telephone conversations on the Internet, then there is very little information on the “correctness” of conducting reference visits. This article is primarily focused on a wide audience of IT consultants and entrepreneurs, acting as suppliers and promoting complex software and hardware products and solutions.

When choosing any product to many potential buyers, there are not enough advertising booklets and reviews of happy owners: they want to touch on a future purchase. To meet this desire, there are probes, demo samples, various test drives. In the case of complex information systems, a similar approach is also highly recommended by consultants, analysts and other IT well-wishers.
When choosing corporate software, studying printed materials or installing and testing a truncated demo version does not always provide enough information to make a decision.

The most preferable for the client is the option of combining the useful with the pleasant, i.e. viewing the working system with receiving feedback on the work not only with the system, but also with the supplier company. These requirements correspond to the so-called reference , reference or reference visit to a happy current user. The word reference refers to both a reference, a recommendation, and a person giving feedback.
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Over ten years of sales of electronic archives, we conducted a couple of dozen significant reference visits. The largest was the visit of an international oil company with French roots to a Russian bank from the Top-10. This contact did not succeed, as did half of the others, so the attitude to such a requirement in our company is twofold: on the one hand, I don’t want to miss the “fat” client; on the other hand, the “sacrifices” that will have to be made to persuade the current client, as well as the high risk of not meeting the aspirations of the future customer, are a serious deterrent.

Let's try to figure out how to prevent mistakes, not to waste time and money and fully certify the client of your reliability as a supplier and the correctness of his chosen solution.

Reader Questions:

In what cases it is advisable to agree on RV. Is it possible to prepare for it? What determines the success of the visit? How to spend the resources of participants in the process as productively as possible?

Our answer:

It is necessary to approach the issue comprehensively and be sure to do homework.

Initial situation:

So, a potential client almost at the first meeting warns you about the need for a reference visit to one of your clients.

Consider the process participants:

• Potential client;
• Provider of PP and services;
• Old customer.

The composition of issues during the negotiations:

1) Discussion of benefits;
2) Discussion of obligations;
3) Issues of technological competence and professionalism

Participant	Goals / Benefit	Risks / concerns
Potential client	- To see the advantages of the chosen solution, the functionality of a real example, and not with words. Look at the system live, chat with an existing client. - Assess the level of competence and professionalism of the supplier - Consider the possibility of long-term partnership with the supplier	Do not see the expected, all projects are different, not the scale and specificity of the project Deceive in the success of implementation
Provider	Get a new customer	Negative, but the obligations to the old client will nevertheless have to be fulfilled.
Old customer	Get additional bonuses from a supplier for a small service, once again promote your project.

Sequence (steps) of reference interaction:

1) Contact of the Potential Client to the Supplier with the requirement to conduct a reference visit.

2) Search for a suitable Old client and conduct negotiations with him about conducting a RV.

3) RV conduction.

4) Contacts with the Potential Client after PB and press through to the transaction.

5) Fulfillment of obligations to the old client.

Details on the items with explanations:

Step 1 .
Most often the requirement of a reference visit is expressed in a categorical form, and the categorical nature is directly proportional to the size and complexity of the future project.

Recommendations :
- try to avoid holding this meeting, especially if you are not sure of success;
- agree to a reference visit when all other marketing tools have been used. It is advisable to carry it out at the final stage of the “election” process, when the customer has practically opted for you as an executor of the project and needs to provide additional confirmation of the correctness of the choice.

Step 2 .
The old client must be primarily loyal, and his project alive. It is unpleasant to find out at a meeting that something in the system or someone with the system is not working, the server is lying, and the sysadmin has not looked in there for a year.

Recommendations :
- Choose a project closer to the industry of a potential client, ideally see how everything works for a competitor, but you can also watch related industries (for example, banks go to insurance or leasing). If there are none, refer to the type of project, for example, an archive of financial documents and contracts can be shown in almost any company, regardless of its industry.

- Always bargain, especially on bonuses. Usually, an old client acts on the principle of PEPSI: “ASK for MORE!”, For example, it will ask for an additional license or six months of free technical support. You can stimulate the old client with the size of bonuses depending on the results of the meeting.

Step 3 .
So, the moment is “H” ...

Recommendations for meeting preparation :
- If a potential client holds meetings not only with you, but also with your competitors, try to make your meeting the last one. Memories of a meeting with you will be the most recent in assessing the final results.

- Get to know all the participants of the meeting from both the potential and the old client and their position on the project before PB. At one of our last meetings from a potential customer, two new participants appeared (employees of the business unit), insisting on the importance of functionality, which at early meetings IT specialists recognized as insignificant.

- Find out in advance the list of questions that a potential client is most interested in.

- Minimize the number of delegates from a potential customer. How many people, so many opinions, not to mention the interests.

- Direct a meeting with an old client. The meeting may consist of three parts: first you give a presentation of the project and tell the story of interaction with the client, then the old client demonstrates the system in action and tells how he works with it, at the end of the questions and answers.

Recommendations for the meeting :
- Tightly regulate the time - one, maximum two hours, if for a potential client this meeting is an opportunity to air out and not sit in the office, then for an old customer - a distraction from the main work.

- Moderate the meeting. Provide dynamics and control, fill in the pauses with your own questions, keep up the pace, do not let the conversation deviate from the intended plan.

At the end of the meeting :
- Try to summarize the meeting with a potential client (without the participation of the old client). At this moment it is impossible to leave the client alone with his impressions, not asked questions and possible doubts. It is necessary to understand the mood of the client and if the client hesitates, try to dispel these feelings.

- Next, you need to specify a specific date of contact, so that the client would be limited in time for unnecessary thoughts and decisions.

Step 4 .
A potential customer formalizes the result of the meeting in the form of questionnaires, and this takes some time.

Recommendations :
- Pause - no reason to relax, do not lose sight of the potential client after PB, at least send additional information that is not sufficiently covered at the meeting.

Step 5 .
Regardless of the result of the meeting, the obligations undertaken before the old client must be fulfilled.

Recommendations :
- The reference visit is another good reason to talk with an old client, find out if he is ripe for additional work that is not included in the list of bonuses.

TOTAL

In conclusion, I want to say that in sales of corporate software, as in war, there are no universal win-win technologies; everything depends on the specific situation, a variety of external factors and your desire. The reference visit is an extremely complex marketing tool, but in skillful hands it will be able to help press the most difficult and large deals.

Useful links on the topic

REFERENCE VISIT
Author: Vladimir Demin Published in CIO Magazine No. 3 of April 4, 2008
Remarkable material from an experienced IT consultant, but not happy with the position that "of all the expected results, reference visit cannot achieve any."

Success factors of reference
Posted by: Risto T. Salminen, (Lappeenranta University of Technology, Department of Industrial Engineering and Management, Lappeenranta, Finland)
Good theoretical calculations, access to the article is paid.

Taxonomy of Customer Reference Communication - A Pilot Case Study in the ICT Sector
Authors: Anne Jalkala, Risto T. Salminen
The material of the same Finnish author Risto Salminen + his colleagues. Some ideas for this article are borrowed from her and properly developed and supplemented.