Valuing Customer Capital

The most valuable asset a growing company can possess is a portfolio of enthusiastic and successful customers. This "customer capital" represents an opportunity to build market credibility, gain media exposure and analyst influence, attract new clientele and accelerate the sales cycle. In fact, your existing customers are a more powerful growth lever than just about any other marketing move you might make.

Unfortunately, few companies truly capitalize on their existing customer capital -- or fully leverage their customer references and success stories. They miss a key opportunity to rise to the next level of revenue and profitability. 

In the world of B2B solution marketing, customer capital takes multiple forms:

Customer Cases. Case studies represent a compelling opportunity to tell your story from your customer's perspective. They are high leverage because, once published, you can employ them actively and continuously. The media welcomes these types of stories and considers them one of the most valuable sources of content you can provide. Industry analysts and other opinion leaders hone in on them as proof points. Sales people find they lend credibility in their conversations. However, companies typically put too little effort in the sales process into ensuring successful customers will go on record and too little effort in the marketing process crafting and promoting these stories.

Customer References. Your customers, quite simply, have a high level of credibility among their peers and thus, represent the greatest source of influence on your prospects. Even if they won't go on the record with a case study, they should be expected to provide references in key client opportunities if you have delivered the outcomes you promised. Such expectations often are written into contracts. However, the best client references are those who willingly play this role -- and clearly recognize that their continuing success is bound up with yours.   

Customer Insights. Some have called this element "the voice of the customer." Others talk about their "lighthouse accounts." However you look at it, it's critical to understand that your clients are not only an extension of your marketing, but an extension of your R&D. Your best ones can be counted on to provide perspectives and insights that can help guide you as you launch new offerings and enter new markets. It makes sense, therefore, to have a well managed "customer council" or, perhaps, make some of your best clients members part of a wider "thought leadership council" that might include advisors and opinion leaders of varying stripes.

In order to accumulate and leverage your customer capital, it is important to manage this asset with care and diligence. Market leading companies tend to have well tended customer reference programs. Indeed, one growing profession, according to the Phelon Group, is the "customer reference professional."

I also think it's critical to think strategically about the customer's motives and interests. How can you enhance the professional, corporate and career status of the individuals you seek to engage? How can you make participation in your customer capital initiative compelling to them? While many companies may prefer to keep their high-value solutions secret, you may be able to overcome such obstacles by creating incentives for participation. What would they value in exchange for providing insights, doing a case study, speaking to the press, giving a presentation at a tradeshow (or on a webinar) and acting as a reference? Think long and hard about this one. It's a strategic issue.

Customers typically welcome the opportunity to be part of an elite club that elevates them professionally. That's what I advocate. Make it a club -- or a council -- that respects their professional insights and marketing value, while ensuring that they obtain value that is commensurate. Don't assume the success of your "solution" is adequate to win their enthusiastic participation; focus on their personal and organizational motives. Imagine you are hiring them to be your evangelists because that is precisely what you are doing.

Comments

[Mike Barlow]

I agree. I'm a freelance corporate writer, and I can tell you from experience that profitable, competitive companies spend a healthy chunk of their marketing dollars developing case studies that clearly articulate the value of their products services. My best clients update and refresh their case studies regularly and frequently. Fresh case studies are great for keeping the sales force happy, and they impress prospects to a far greater degree than you might expect.

[Joe McKendrick]

I agree as well, Britton. As an independent industry analyst and editor, I find customer references and case studies to be as good as gold.

You'd be surprised how many companies I speak with -- including plenty of Global 1,000 types -- who often cannot come up with a single customer that would be willing to speak on the record about a new product. Nothing puts a bad taste in your mouth more than a PR/marketing pitch which is devoid of credible, working references.

Interestingly, the BEST and most credible references are those customers that have some negative comments about the product as well. Nothing is more refreshing -- and generates more feelings of goodwill toward a vendor -- than a candid customer with a well-balanced assessment.

[Britton Manasco]

Great comments, guys. I would really like to see companies more aggressively weigh their marketing investments to determine how much they should invest in customer capital accumulation activities such as these in relation to everything else they are doing. I think companies generally under-invest in activities such as this and over-invest in customer-free marketing stuff that they consider necessary. As I see it and as your comments suggest, it's better to celebrate your existing successes than spout off about a bunch of success you might provide in the future or worse, brag about the features of your new product in a customer value vacuum.

[Gary Cokins]

Britton's last comment about "weighing marketing investments" caught my attention. One method to quantify which types of customers to retain, grow, acquire or win-back applies customer lifetime value (CLV) math. But it seems as if there is little consensus how to apply this metric. The Institute of Management Accountants ( www.imanet.org ) is soon to release grant money for academic research to survey what is common about using CLV math ... which may like shed light on how effective this approach is.