The Practices and Functions of Customer Reference Marketing - Leveraging Customer References as Marketing Assets Anne Jalkala Researcher, Department of Industrial Management, Faculty of Technology Management Lappeenranta University of Technology P.O. Box 20, 53851 Lappeenranta, Finland Tel: + 358 - 5 - 621 2623 E-mail: anne.jalkala@lut.fi Risto T. Salminen Professor, Department of Industrial Management, Faculty of Technology Management Lappeenranta University of Technology P.O. Box 20, 53851 Lappeenranta, Finland Tel: + 358 - 5 - 621 2645 E-mail: risto.salminen@lut.fi Keywords: Customer references, Customer relationships, Marketing assets, Industrial marketing, Resource- based view Abstract: This multiple-case study focuses on the practices and functions of customer reference marketing, and on the ways through which customer references can be deployed as marketing assets. The research is based on multiple-case-study methodology and the empirical findings were derived from an in-depth analysis of 38 semi-structured personal interviews with managers in four case companies operating in the fields of process and information technology. The findings show that industrial suppliers are able to leverage their customer references as marketing assets externally through various practices in order to (1) gain status-transfer effects from reputable customers, (2) signal passing a selection process and achieving an enhanced market position, (3) concretize and demonstrate complex solutions, and (4) provide indirect evidence of their experience, previous performance, technological functionality, and delivered customer value. Customer references can also be leveraged internally to (1) facilitate organizational learning, (2) advance offering development, (3) motivate personnel through internally shared success stories, and (4) develop understanding of customer needs, internal competencies, and delivered customer value. By identifying the practices and functions related to customer reference marketing the paper deepens understanding of this highly relevant but relatively under- researched industrial marketing phenomenon and contributes to the literature on customer-based marketing assets. 1. Introduction The philosophy of harnessing loyal customers as part of the sales and marketing team has increasingly become a driver of many industrial firms’ marketing and sales efforts. Due to the perceived high risk faced by potential buyers, companies selling complex solutions to industrial buyers and governmental institutions need to increase their credibility through customer references (e.g., Windahl et al., 2004; Salminen and Möller, 2006; Veres, 2009). Customer references have long played an important role in the area of process technology in the form of reference visits to existing customers’ sites and reference lists accompanying the offer. Nowadays the practices related to customer reference marketing are more diverse as many suppliers use the Internet as a communication channel. Industrial technology and service providers such as ABB and Eaton are publishing numerous client case studies and customer success stories on their Web sites. Moreover, managers in the information technology and communications industry have realized that testimonials and demonstrations from existing customers can be used as convincing and cost-effective marketing instruments. Consequently, customer reference marketing has become an increasingly relevant part of the marketing strategy among companies operating in business-to-business technology. Large IT firms such as Microsoft, Dell, IBM, SAP, and Sun Microsystems have coordinated customer reference programs designed to encourage their business customers to participate in various reference activities ranging from being