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Many a company appreciates the value of reference selling, but few of them have the abundance of referencable customers enjoyed by Mentor Graphics Corporation, a leading electronic design automation company. MGC's problem in 1994 was not a lack of customers to reference, but rather the lack of a vehicle to communicate these customers' testimonials and contact information to salespeople whose success depends on building credibility with prospects. Through the vision of MGC's sales support group and the services of Callan & Associates, the sales force was presented with a tool for maximizing sales effectiveness - a database of hundreds of customer success stories along with all the data needed to identify and use exactly the right reference for the needs of the day. This MGC Customer Reference Database was instrumental in producing millions of dollars in incremental sales, according to sales representatives who employed it.

The two firms first established contact in October of 1994, when MGC's Wendy Reeves Dunn visited the offices of Callan & Associates to observe work done for other customers, and by November the project was underway. How did Ms. Dunn achieve a comfort level in a new contractor so quickly? "I was impressed by Callan's grasp of the whole process, the tools he had in place to conduct it efficiently, and the results he had produced for other companies," she replied. "There was another important thing he did - he arranged for one of his previous customers to be there in person and meet me, Ed Dunphy from Sun Microsystems. Ed had a number of very positive comments to make about Callan and the sales results Sun had experienced from his group's efforts. I figured that if Callan could reference-sell himself that powerfully to me, he could help us reference-sell just as powerfully to our customers."

During the planning stage of the Customer Reference Database, Callan met frequently with Dunn and her staff to customize the process for MGC's unique needs. Together they categorized the industries MGC serves, the applications addressed by MGC products, the partners and competitors involved at customer installations, and a host of potentially vital pieces of information for salespeople to use in closing a sale. During customer interviews, Callan would learn all those particulars. They also established a highly customized format for success stories and associated information, divided into "customer-ready" and "internal-use-only" portions of the database.
Since Dunn planned to expose the new tool to the MGC sales force at the company's annual Kickoff meeting just two months away, Callan proceeded immediately to interview MGC's sales representatives and then, with their sanction, the customers themselves. No expert at electronic design automation at the time, he began by recruiting free-lance writers with experience in this highly technical field. "Callan obviously understood the high technology business and the whole sales process, and he employs very good people to complement his own areas of expertise," said Dunn.

By the Kickoff meeting in January 1995, the first ten success stories were researched, written, and approved by customers. But neither Dunn nor Callan was close to satisfied, and so the project proceeded at a rapid pace. By April, a critical mass of about 50 success stories was ready for use and the first edition of the MGC Customer Reference Database was published in hard copy form and distributed to every MGC sales office.

Comments from the sales force were so overwhelmingly positive that Dunn immediately issued another contract so that Callan could continue building up the database. "Fifty references might sound pretty good," said Dunn, "but we wanted to have references for all our major products for all their purposes in all our major markets. We wanted to make sure references existed for our most important partners, and we wanted to show why we were chosen over each of our biggest competitors. Covering all the bases like that requires a lot of references."

In October of 1995 the database had grown to about a hundred references, and the second edition was published. Still the project continued, and for the first time it entailed updates as well as new stories. Older references were revisited to keep information current and to weed out references that were no longer useful. "We felt it was very important that our salespeople trust the database, and that called for keeping it up to date," explained Dunn. "If they employed it a couple of times only to find that customers were no longer referenceable for some reason, they'd stop using it and we'd lose sales. Periodic updates kept that from happening."

The project continued on a six-month delivery cycle of new and updated success stories in hard copy form, which MGC published each time in a handsome binder, until 1996 when they augmented the binder by publishing an electronic edition on the MGC internal website. Now salespeople can access references from their desktops using a very sophisticated search engine that allows a user to enter, say, a product name, an industry, and a partner - and up will pop a list of the existing references from that industry using that product in conjunction with that partner. One click later, the success story and all ancillary data about that reference are on the screen.

How has the database benefited MGC sales? A poll of MGC salespeople that was conducted in late 1995 demonstrated that the project had paid for itself many times over. Some verbatim comments:

"I'm a big proponent of the Ref DB. It's helped me close two test deals this year. I find it a very quick way to generate high quality references instead of calling around hit-and-miss trying to find them from other account managers and then qualify them."

"I'm working a deal right now which will probably be between $750 and $1 million where I'm using the Ref DB specifically for telecom accounts. They wanted references in the same industry and of comparable size."

"I used it in a presentation to a Vice President to make a case for some products. It turned out to be very valuable. The sheer size of it had an impact. It was useful to see what others are doing, and the lookup tables are great. This is a good size order, about a $2M project."

"I used the Ref DB recently, and I'm expecting an order for $235K for Top-Down design."

"We were able to obtain several good references that were instrumental in convincing the customer to go with us instead of a competitive environment. This deal is about $650K and we anticipate closing it in December."

No one requires a litany on the benefits of references and success stories, but why choose Callan & Associates specifically for creating them? Dunn's response: "Probably the biggest thing is the trust factor, the fact that I felt I could trust Callan & Associates to interface directly with our customers. They're good people who speak the language and understand the business. I could turn customer communication over to them with confidence."

Dunn is no longer employed by Mentor Graphics, but is available to serve as a reference. Callan & Associates would be pleased to put interested parties in touch with her.

Copyright 1993-2003, Callan & Associates