You’ve convinced the CIO and IT manager at ABC Company that your custom software will solve their CRM woes. They’re almost ready to sign on the dotted line, but they’d like to speak to a few of your references. There’s just one problem: The customer is in Australia and your best reference is in Brazil. The time difference makes it nearly impossible for the two to share a phone call.

That snag is one scenario that References-Online was created to address. President and CEO Jim Mooney, a 17-year sales veteran, founded the company, which provides recorded online interviews with customers. Mooney has seen his share of stalled sales due to difficulty in getting the client and reference together and wanted to find a way to use technology to solve the problem.

We spoke with Mooney and References-Online vice president David Sroka about how the service might help IT consultants land more contracts.

Written vs. oral references
Most companies use written testimonials and case studies as references, which doesn’t satisfy most would-be clients, Mooney said. Usually, a potential customer wants to speak with a former client before signing any contracts.

“The concept of capturing an audio interview with the reference client from a prospect’s point of view made a lot of sense,” he said. “We felt that people wanted to hear from users of the product or the service.”

In today’s economy, it’s tough to capture new business, and companies are generally depending on their existing customers to get them through, Sroka said. Potential clients are slow to commit to a new initiative, which has lengthened the sales cycle for consultants. The customer reference is probably the best accelerator in that whole process, Sroka said.

How it works
References-Online works with its customers to build a set of interview questions. Then, the client asks its best customers if they’d be willing to be interviewed by a References-Online representative. The interview is recorded and then lightly edited to remove any stutters, stammers, or otherwise unresponsive material.

When something neutral or even “slightly negative” comes out in a customer interview, Sroka said References-Online encourages its client to keep it in the final interview to build credibility. The customer has the last approval before the interview is posted on the References-Online site so that if it has been edited unfairly or if the customer believes that the interview is not a true presentation of their feeling at the time of the interview, they may say that it will not go on the References Online Web site, Sroka said.

The client signs a letter of authenticity or a letter of creditability, which is available for review by the client’s prospects on the Web site.

Sroka said References-Online clients generally choose to update the interviews once per quarter either by rotating their customer references or adding new questions to those interviews already posted. Leaving a particular customer’s interview posted on the site is at the discretion of the vendor client, and they’re very aware of whether their reference client is still happy with the interview.

If a potential customer was to hear a reference customer’s interview online and then request a follow-up conversation with a reference who had become unwilling to continue in that role, the vendor client would be in a bit of hot water, Sroka said.

References-Online clients pay $2,500 per interview. That price includes the development of interview questions with the client, conducting the interview itself, editing or cleanup of the interview, and posting it on the site for one year. The client may choose to update the interview twice in that year. The purchase price also includes a monthly report about the interview’s activity as well as instant e-mail notification when the interview is accessed. For each additional year that the interview stays posted, the site charges $500 to maintain it.

While the return on investment (ROI) of using References-Online is hard to calculate, Sroka said the first and foremost question to consider is, “How many additional deals can we help our customers close in a given quarter by removing days or weeks out of the sales cycle that it would usually require to put a reference and a prospect together?”

Mooney added that the key metric would be, “How many of the deals that you closed this quarter closed without the need for live conversation when a prospect visited our site?” Beyond that are the intangible savings, such as how much effort it takes to decide which customers are worthy of being used as references, which are still willing to be references, and the coordination of schedules between the prospective customer and the reference.

The problems with references
Besides the obvious problems caused by time zones, vacations, sick time, and business travel, consultants can have other troubles when trying to line up references. For example, Mooney said, it’s often difficult to match the prospective client with a former customer that is in the same industry or is the same size in terms of revenue.

References-Online tries to remedy that problem through its site design. If, for example, you’re a potential client with under $100 million in revenue in the telecom space who is interested in Product X, you can visit the site and filter the references with those criteria.

Perhaps most important for IT consultants is the ability for customers to sort by topic, Sroka said. For example, all the references for your consultancy are going to be asked the same set of questions. If one of those questions is about scalability of your product, potential customers can isolate that question and hear responses from all references on that topic, Sroka said.

Additionally, Mooney said References-Online helps ensure that you’re not wearing out the goodwill of your best customers.

“If you use them once, you’re going to get a great reference,” Mooney said. “By the seventh time you use them, their level of enthusiasm diminishes a little bit.”

Even if the prospect wants to speak with the former client after hearing the References-Online interview, that conversation will be more concise than it might have been because the prospect has all the background information, Mooney said.

Mooney said References-Online also reduces the “loss of control” of the sale. Consultants are pretty much in control of what happens throughout the sales cycle, from demonstrating and presentations to the close of the sale.

“By using Reference Online, you’re minimizing the amount of time that your prospect and your reference client are actually communicating, therefore putting a little bit more control and minimizing the risk of that call,” Mooney said. “You’re ensuring consistency in your messaging and enthusiasm twenty-four hours a day, seven days a week.”

References-Online customer
One of References-Online’s first customers is a former colleague of Mooney’s, John Hasbrouck, president and CEO of NewLeads, which sells lead management tools for trade shows. Most of NewLeads’ customers are trade show managers who are on the road more than 150 days a year for their company, creating a unique problem for closing a deal with those customers before they go back out on the road, Hasbrouck said.

Usually, NewLeads customers will call in a “moment of pain” when they’ve just lost all their leads from a trade show because the lead collection system they rented didn’t work correctly.

“There are usually several things that they need in order to really take something upstairs to the boss to get a deal through, and one of them is always, ‘Who else is using it? Who can I talk to who’s using this?’” Hasbrouck said.

If NewLeads can’t answer those questions quickly and set up a reference call, the manager is back out on the road and the pain disappears for a while, Hasbrouck said. Even if they have the perfect reference contact, it’s most likely another trade show manager who is—you guessed it—on the road. That’s why he decided to use References-Online, which in some cases has cut his sales cycle from six months to three weeks.

Hasbrouck, who has a background in broadcast journalism, said he had no worries about the credibility of References-Online’s interview process. He said he understands the power of the spoken word, and that the written word is often skeptically received.

“It’s just like giving testimony in a courtroom: You can detect a lie,” Hasbrouck said. “These are fresh, unrehearsed interviews that your customer is going there to listen to…so they can figure out if this is a natural answer or not.”

Maintaining your references

How do you keep your references fresh and useful? Do you use a service like References-Online or have you found another way to handle them? Send us an e-mail or discuss your methods below.