Essential No. 3: Customers Can Sell for You

Are you leveraging your best customers to do more than just buy from you?

When I share the unique revenue growth pattern of America's highest-growth companies, I am often asked how these exceptional companies achieve their results. It is not just about the number of transactions a company completes; it's not even about just selling hard. Rather, it's about securing deep relationships with a special set of valued customers—Marquee Customers—who will become the rising tide for exponential revenue growth—especially through down economic cycles. To be sure, they will not account for all of your revenues. But they will account for a disproportionate share.

Marquee Customers are people or companies with such sparkling reputations that their glow extends to whomever they do business with. Marquee Customers give companies credibility and instant status. Look at Cisco (CSCO) in the early '90s. Terry Eger, then vice-president for sales, knew that Solomon Brothers would provide more than just a buying customer. Solomon would be the Marquee Customer that would help Cisco establish its credibility with other Wall Street investment firms. Over time, Cisco added additional Marquee Customers, such as Motorola (MOT) and AT&T (T), which tested and piloted Cisco's new products and then provided testimonials to large corporations.

Marquee Customers can fuel your company's revenue growth in three ways:

1. Product Consumer: Marquee Customers will thoroughly test a company's product or service. If it's deficient, they'll say why, and if it's good they place an order. For instance, when Performance Foods was starting its growth path to a billion in revenue, Outback Steakhouse Restaurants (OSI) gave it a trial run as their primary food supplier. When Outback was satisfied, it told Performance Foods (PFGC) to expand its distribution services to four restaurants. Pretty soon, Performance Foods had them all.

2. Value Proposition Advisor: Marquee Customers can tell you if your value proposition is good for them. It doesn't matter if it seems good to you. EBay (EBAY) knows this. As eBay evolved from being an online auction site and branched out into other businesses, it developed "Voice of the Customer" groups. Today, it has more than 30, and it calls on them for feedback when it is redesigning its Web site, repricing, or making changes to its service offering. The Voice of the Customer initiative at eBay was key to eBay's growth. As any company experiences as it becomes large, managing a diverse set of customers and their needs becomes increasingly complex.

Even so, listening to your most valued customers is key. Starbucks (SBUX) is a growth turnaround that reinforces this point. Starbucks' growth was fueled by customizing the coffee experience, which allowed customers to indulge and escape. After rapid growth and automation of store processes, the company has listened to customers and is renewing the coffee experience for them.

3. Lighthouse Reference: Marquee Customers can draw attention to up-and-coming companies by offering recommendations and references to their peers. In this way a Marquee Customer becomes an extension of your company's sales force!

Joe Scarlett, recently retired chairman of Tractor Supply (TSCO), the No. 1 U.S. farm and ranch store, says: "We have a small percentage of customers who are not only important but very loyal to us. These customers account for a significant percentage of our business. They are Tractor Supply's Marquee Customers. These customers come back time and time again and bring in other new customers when they shop. These are the customers people talk about when they refer to word-of-mouth advertising. More important, they are the customers who sell for us."

A High-Profile Set of Marquee Customers at Skullcandy

Skullcandy, the hot-growth headphone company (which is about to exceed $100 million in revenue and is still growing through the recession), has been leveraging Marquee Customers to propel growth. Rick Alden, CEO of Skullcandy, elaborates: "The concept was to integrate headphone technologies into skateboard and snowboard clothing and headphone accessories, such as helmets and ski jackets. This was a new category that was not addressed by others."

Skullcandy actually has two tiers of Marquee Customers: the retailers and the retailers' customers. That actually sets up a "push-pull" dynamic. The brand-name retailers—the first tier of Marquee Customers—create the "push," by offering products in brand-name stores where sports enthusiasts shop. The second-tier Marquee Customers, the iconic snowboarders and skateboarders whom enthusiasts look to for trends, influence customers, creating the "pull." I asked Alden to elaborate on his Marquee Customer essential insights.

"Our first Marquee Customer was The Click Skateboard Shop. We gained credibility and visibility to other regional independent retailers when they saw how well we were doing," Alden recalls. "Our first national footprint Marquee Retail Customer was Zumiez, a leader in action sports. Being featured in their retail stores showed specialty skateboard and snowboard retailers that Skullcandy offered a desired brand and could consistently supply a national retailer."

Realizing the potential to create demand—pull—Skullcandy enlisted the second tier of Marquee Customers, using its alliances with the specialty retailers it was working with. "When other snowboarders saw half-pipe world champion silver medalist Todd Richards, who pioneered the snowboard trick 'the wet cat,' wearing Skullcandy, they wanted to try our products, too," says Alden.

Other second-tier Marquee Customers Skullcandy has enlisted are Olympic gold medalist Danny Kass and snowboarder Marc Frank Montoya. "We found that since there were no headphones in this category, we didn't have to compete to sign advertising contracts; we just had to give them a set to try out—free," says Alden. "No fees paid for their endorsement. That simple." The result can be measured if you visit the slopes and watch snowboarders listening to music on Skullcandy's headphones. Customers influencing other customers is the fuel that enables this growth company to grow through recessionary times.

Insights to Actions

The remarkable value added by Marquee Customers can be enhanced by reflecting on the following questions:

• While all companies have customers, how well are you developing your best customers to become Marquee Customers? Do you fully understand what determines a customer's becoming Marquee to your company?

• To accelerate new products and services to fuel growth, how are you refining new innovations through the lens of your Marquee Customers?

• How are you leveraging your best customers to not only buy from your company but sell to other prospective customers, thus reducing your sales cycle by half and significantly reducing your sales and marketing costs? And what are you doing to repay their good gestures?

Here are three actions you can take to leverage Marquee Customers to boost your revenue, shorten sales cycles, and reduce marketing and sales investments:

1. Form a Customer Advisory Council

Apply a structured and disciplined approach to seeking customer feedback and advice through a Customer Advisory Council. Using only a few customers, set an agenda around defining the "exceptional value" your solutions provide to address your customers' unmet needs; defining a product or solutions road map to meet future needs; and discussing how your best customers can help proactively sell for you. This could be by talking at industry conferences, providing testimonials, and proactively spreading the word to other potential customers.

2. Refine New Innovations Through the Lens of Marquee Customers

As a supplier, get your new products out of the lab so you can get valuable feedback from customers early on. Engage potential customers to problem-solve: Identify customers' unmet needs and how the benefits of your new product or service address those needs.

The right dialogue is in fact a problem-solving discussion vs. a sales-oriented one. Customers can often articulate a problem but not know the most innovative solution. While suppliers may be offering higher-order benefits, they may not be addressing the biggest or most important customer need.

3. Leverage Marquee Customers Across All Tiers

Marquee Customers sell for you when they discuss how your company is providing products or services that fill a big unmet need. Sharing their experience with other companies is more than selling; they are offering a testimonial that you cannot provide. Customers love to be sold by other customers. The impact is your sales cycle time will be reduced by half, the cost of sales and marketing will be reduced, and your win rate will increase.

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