By Andrew Z. Brown, Bridgemaker Referral Programs
Last month when I introduced the new Centers of Influence (COI) series, I could not have anticipated the flood of emails and calls I received. Software executives from across industries wanted guidance to help them answer two specific questions: ‘Does it make sense for our company to have a COI strategy?’ and ‘Should we be implementing a COI program now — as opposed to at another time?’.
To address these questions, this article will help you:
- Determine if/when a COI program is best suited for your B2B organization; and
- Evaluate the pros and cons of rolling out (and sustaining) a B2B COI program.
Let me begin by starting with a few fundamentals central to COI programs for growing B2B companies and follow those with some key realities of influencing, a short case study of adopting a COI program for generating new revenue and a review of the most common risks of adopting/not adopting COI programs.
The Fundamentals Of A Successful ‘Centers Of Influence’ Program
Tapping into the unique power of COI requires more than access to, and support of, charismatic socially persuasive people who can have an impact on the opinions and behaviors of members of your targeted audiences. Rather, you need to harness those people in a managed and measured COI program built on three core ‘building blocks’: purpose, structure and capacity.
Purpose: COI programs need a distinct and well-defined purpose. For example, you could choose to leverage a COI program to help refine your evolving products so your company can better distinguish itself from competitors. Or, you could decide your COI program should best be focused on helping your company quickly penetrate new markets by finding alliance partners in different geographic territories or industries. The takeaway here is this: successfully tapping into the art, and science, of influence requires a specific business rationale. Such purpose-driven COI programs are best applied when you are looking to achieve any of the following:
- Generating faster or more sales from your targeted market by leveraging referral sources
- Enhancing your reputation with key segments and relevant media by leveraging industry thought-leaders
- Increasing product penetration within your targeted market by leveraging existing/prospective customers
- Strengthening your company’s culture by leveraging your employees
Structure: With a well-defined purpose in hand, your COI program will need some degree of structure. At a minimum, you must establish some rules about ‘who needs to be influenced’, ‘who will be influencing’ and ‘how influencing should, and should not, be conducted’. That means developing acceptable codes of conduct and an escalation path for those times when influencers require support to achieve their influencing objectives. At the same time, structure should include a clear agreement between you and the influencers you are leveraging. The clearer the agreement, the greater likelihood of success for your influencers and your COI initiatives.
Capacity: Once you’ve committed to leveraging a COI program, you need to devote people, time and resource to build and sustain it. That requires putting into place someone who is held accountable for managing the initiatives used to influence your target audiences. At the same time, a COI program needs to have organizational support, including a budget. Since most companies are new to systematically leveraging influencers toward achieving one or more business goals, leadership needs to take an active role in championing your COI program. The good news: parts of your COI program can become self-sustaining. In fact, COI programs devoted to generating new revenue often turn out to be more cost-effective than hiring additional sales staff.
The Realities Of Influencing
Before committing to implementing a COI program, it’s critical to keep in mind the following realities about influencing people and groups toward achieving any B2B business goal:
- Influence is built on trust. Influencing is built on having established some level of trust between you and your influencer and trust between the influencer and your target audience. Integrity and openness are values underpin long-lasting and effective COI programs. The result: Your COI program should not be framed as a method designed to manipulate people or groups. That approach will see your COI efforts erode trust and ultimately fail.
- Influencer effectiveness evolves over time. The qualities, characteristics and context that make person(s) influential with a targeted audience change over time. For example, the effectiveness of a subject matter expert at influencing your target audience may be reduced because they stop contributing to publications seen as credible. The result: Your COI program needs to be monitored for influencer impact and refreshed with the addition of new influencers.
- Multiple motivations spark influencers. Regardless of your business goals, influencing the perception, opinions and behaviours is rarely based on a single motivation for your influencers or for your targeted audience. The result: Your COI program needs to monitor, anticipate and respond to the evolving reasons underlying why your influencers are prepared to (or can) influence members of your targeted audience.
- Metrics must reflect influencer impacts and efforts. Influencing the perception, opinions and behaviors of your target audience is rarely an instant ‘transaction’. The result: Your COI program needs to use success metrics that recognize progress is achieved cumulatively.
- Influencing is not always rationale. As the stakes rise for your targeted audience — e.g. risk, price, product complexity, fear of change — your influencers need to be adept at tapping into the emotions that cause people and/or groups to take action. The result: Your COI program needs to include influencers who can listen well, demonstrate empathy and have the traits associated with a high ‘Emotional Quotient’.
The Benefits Of Adopting A COI Approach (A ‘Case Study’ For New Revenues)
The quantitative (and qualitative) benefits you achieve by adopting a COI approach varies depending on the rigor you bring to planning, staffing, supporting and managing COI initiatives. However, let’s consider an example of an ambitious technology company that directed their COI program specifically at generating new revenue:
Having operated for over 20 years, Envision — a designer of digital branded experiences — recognized it was going to have to adopt different ways of conducting business to succeed. The company’s founder and dynamic leader counted on his, and his team’s, innovative products to attract and maintain top tier customers. But, like a ‘perfect storm’, the company faced several conditions that jeopardized their growth goals, including:
- An expensive-to-maintain sales force with members who were unable to move prospective customers quickly along the ‘sales funnel’;
- A heavy reliance on too few customers — and, those clients were constantly looking to drive down the cost of engagements;
- Fierce price competition from rival companies driving down profit margins; and
- An increase in time and costs involved in developing sales enablement materials.
For Envision, adopting a COI program made sense given the following:
- The average time to close a deal ranged from six to eighteen months;
- Building name recognition in new markets was costly; and
- The company recognized it had some enthusiastic supporters within its network.
The referral-focused COI program resulted in $550,000 in new revenue within 18 months and reduced the average time to close deals by over 50 percent. At the same time, they found their COI program strengthened relationships with referrals (i.e. clients and non-clients) and increased ‘line of sight’ into the return on investment of relationship-building activities. The additional revenue and increased cash flow resulting from the program enabled Envision to expand its product offerings and establish operations in new regions.
The Risks Of Adopting A COI Approach
The risks associated with adopting a COI approach to achieving business goals fall into two categories: the risks associated with implementing a COI program and the risks of not implementing a COI program.
Implementation Risks. When you decide to implement a purpose-driven COI program, you will face the following risks:
- Once you start a program that leverages COI, you cannot neglect it. After all, the influencers who you have engaged have an emotional stake in your success. If you neglect your influencers — for example, by not providing the support they need to be successful or by not adapting to their evolving motivations — you will jeopardize these key relationships upon which your future growth depends.
- You must be prepared to listen to influencers — and then act upon their feedback. This can be scary particularly if they reveal challenge your view of your product(s), your go-to-market strategy or how you think you are perceived by your targeted markets.
Opt-Out Risks. If you decide the timing is not right for you to implement a purpose-driven COI program, you will face the following risks:
- Competitors will encroach on your territory. If you’re in a competitive industry, you can wager at least some of your competitors are looking to leverage COI programs to achieve their growth. And, because they are aiming at similar markets, the influencers they seek to leverage are those you would too.
- You will delay building key growth skills. Every software company’s growth plateaus because the focus is on repeating and automating processes that drive business transactions requiring customers have little knowledge or trust in your brand. In contrast, COI programs require developing in-house skills in building trusted relationships and vibrant communities. These skills are an essential foundation for stronger corporate cultures, more productive employees and more loyal customers.
- You will miss out on opportunities to grow. Specifically, by not deploying a managed and measured COI program, you will lose potential new revenue, lose chances to enhance your profile, achieve lower than targeted product adoption rates and/or miss out on securing the best people for your company’s culture.
Watch for the next article in the Centers of Influence series coming in April 2019.
About The Author
Andrew Z. Brown is Founder and Chief Innovation officer of Bridgemaker Referral Programs. He is the lead author of the How to Grow Your Business Through Better Relationships series – which includes books on optimizing growth by leveraging referral sources, channel partners and strategic alliances.