Tuesday, February 28, 2006

"Bad Advice" About Customer References, 2 of 3

Here’s my 2nd bit of so-called “bad advice” about customer reference programs: Don’t Put Reference Mandates In The Contract.

A lot of clients think that they’ve been very clever by convincing a newly-inked customer to sign-off on a contractual clause that runs something like, “Thou shalt be a media reference.”

So, when the agency is informed of the new deal, we get excited and ask about whether the Big Customer will be a reference, and the client contact replies, “Absolutely, it’s in the contract; they had better be a reference!”

Sometimes it works, but sometimes, it just don’t.

There are very rarely any “teeth” in these clauses. What is the client going to do if their customer reneges on the deal? It’s not as if the client will fire the customer!

Even if there are teeth in the clause (e.g., the customer loses sweetheart pricing), the fact is that a “public reference” is not as important as a “private reference” to the agency’s clients; if the customer reneges on the PR stuff but is happy to talk privately to analysts, VCs and prospects, then PR will lose out every time.

So my “bad advice” is, “Don’t put it in the contract.” Instead, wait until the relationship is running strong and the customer contact is happy with the client’s solution. Then, call ‘em up informally to inquire whether, say, they’d be willing to attach their name to a bylined article that appears in their industry’s top journal. The ego-gambit just might spur them to push a deal like this through their in-house PR naysayers, and ideally will open the floodgates to follow-on reference calls.

Putting ANYTHING in a contract begs for close scrutiny - by legal eagles, short-sighted execs, and skittish in-house PR folk. That’s a great way to find yourself staring down a clause that reads, “Thou shalt not never, ever, never ever ever ask us to be a reference!”

It's better to start slowly & informally, with a happy customer, and appeal to their own best interests.

Tomorrow: the conclusion of our series on "Bad Advice About Customer References"

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