When you are making a considerably large investment in business software for your company, you need to be sure that you are making this purchase from a reputable vendor that will be there to support you in the long run. How can you be so sure? One thing that goes a long way toward giving you peace of mind is obtaining and checking references.
Getting a small list of happy customers that your vendor has helped in other words, some references is an integral part of the buying process for most companies. There is, however, a good way to check references and a bad way to do it.
Are you checking references the right way? In other words, are you getting the data you really need to make this critical purchasing decision? Or are you talking to one of the vendor's own employees who is simply pretending to be a happy customer? You may think that sounds pretty far-fetched, but as a CEO with years of experience in the software industry, I can tell you that it is not necessarily a ridiculous notion.
Why Check References Anyway?
I actually know of software companies (in fact, one of our own competitors, for example) that are guilty of scamming their potential customers in this way. One of the advantages that the Internet provides for dishonest companies is that it allows them to appear bigger and more successful than they actually are. After all, a professional-looking Web site can be created quickly and easily with little expense. Unfortunately, such a Web site is not necessarily evidence that the company has been in business very long, but few people realize that at first glance.
The purpose of checking references bears repeating: You absolutely must verify that your software vendor has had successful rollouts of their product in the past in order to be certain that they arent just selling shelfware that no one ever uses in the end. You also need to ensure that they have helped customers just like you - of your size, in your region and in your industry. Of course, the perfect reference would be if they have a customer similar to your business that is located in your city so that you can actually meet face to face.
Why is this so important? Lets face it, if the potential software vendor you are considering striking a deal with is willing to lie to you about references, you have to wonder what else they are lying to you about. Discovering dishonesty in this manner will indicate there is no reason to trust the vendor about anything else they're telling you.
The Right Way
So what steps can you go through in order to be certain that you will be learning what you need to learn about the entity you are checking up on? How can you know they are a real reference and not just an employees mother?
Okay folks, it's time to don your detective hat and investigate these references!
Eight Simple Steps to Confirm Reference Validity
- Dont call us, well call you. First of all, if the reference calls you, you should probably be suspicious. Think about it: What kind of executive has time to call someone and give a reference rather than wait to be contacted? If this happens, you should tell the person that you are unavailable at the moment, and schedule a time to call him back when hes sitting at his desk at his company.
- Just the facts. Have your potential vendor supply you with a full name, title, company phone number, company address, and email address for all of the references that you will be contacting, which should be at least three per vendor. Do not settle for Hotmail, Gmail or Yahoo email addresses, or any other temporary email service that anyone can sign up for. Such email addresses are not indicative of a real company.
- Do your homework. Perform a Google search in order to ensure that the reference company actually exists. Does its Web site URL match the Internet domain name of the email address that was given to you by your potential vendor? For example, if the reference company's name is "Ankman Architecture" and the email address is firstname.lastname@example.org, then go search on Google for that company name and see if www.ankmanarchitecture.com is one of the top results you come up with.
- The right fit? Check out the companys website for business model appropriateness. Simply put, is this reference company similar to your business? This may not seem important, but software used by retail stores may not be appropriate if you have a data management consultancy. Additionally, is yours a company that sells mostly to other companies, or do you sell directly to consumers instead? Does your business handle many transactions and customers per year or only a few? The references that the vendor provided you with should be as much like your own business as possible. That is really the only way to know that the vendor is capable of meeting your specific business needs.
- Make the call. This may sound obvious, but you actually have to call all the references and have a conversation with them. Oddly enough, most people never do this, but it is extremely important because you may be averting a situation that could have resulted in wasted money, time and effort for your company. If you actually do the work of calling all the references, then you will have earned your salary and played a significant part in your companys buying process.
- Know who youre dealing with. Call the reference company's main number and request to speak to your contact rather than calling the direct number of the person you were given. This way, you can find out if this is a real company with a real voice/phone system. For example, is there an automated company directory? When possible, speak to a receptionist in order to confirm that the reference executive works there. Tell them why you are calling, and ask if they know who else might help in this matter. You need to verify that the reference executive is actually an employee at this company before you speak with him/her directly.
- Double whammy. Leave a voicemail message and send an email as well. For example, you can follow up your phone calls with a thank-you email sent, of course, to the address that was given to you by your potential software vendor.
- Further research. After taking the first seven steps, if you find that you have any reservations about the company at all, do a search for their domain name on the WhoIs Search Web site. This will allow you to see how long their domain name has been around, as well as who created it. You can also match up locales to area codes on Wikipedia in order to ensure that your references company is really located where they say they are.
What You Need to Know About Your Vendor
Once you have determined that the reference is a good one, there are several pieces of information you need to obtain from them. Here are some sample questions to ask:
- How many phases did the potential vendor have in the rollout of the software?
- Did they encounter any problems, and if so, which ones?
- What would have made things easier or harder during the rollout process?
- Were all of the people in the company as professional and easy to work with as their friendly salesperson had been?
- Were any expectations set during the sales process that were not sufficiently met during rollout and product usage?
- Are all of the functional areas of the software being used that the reference/customer expected? Why or why not?
Gleaning this data from the reference will help all three companies the reference, the vendor and you communicate properly and share necessary information. It will also most likely convince you that you are talking to a real satisfied customer and not a fake one.
Any company can easily come up with one or two reference customers that are "friends of the family," so to speak. These false references can be business owners that are local and known to the company or otherwise too close to be objective about the performance of the software vendor. This is why insisting on references in your location or industry is important, and it is also why you need a list of several different ones to check up on.
If you follow these eight simple steps of analyzing the references you are given, you won't be tricked by an unscrupulous vendor. Furthermore, you will be much more likely to get the right software solution in place one that will lead your company to greater business success. And that's a legacy we'd all like to reference.
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