By Curt Finch, CEO, Journyx
When you're making a large investment in software, you want to be sure that you're buying from a reputable company that will be there to support you in the long term.
Getting a short list of happy customers that your vendor has helped is a common part of most companies' buying processes, but there is a good way to check references and a bad way. You must ensure that you are doing it right in order to get the data you really need to make such a critical buying decision.
Did you ever think that you might be talking to one of the vendor's own employees who is just pretending to be a happy customer? Sound far-fetched?
The truth is there are actually software companies that scam potential customers in this way. The Internet often allows companies to appear bigger and more successful than they actually are. Websites that look professional can be created quickly and easily and are not necessarily evidence that a company has been in business very long.
The purpose of checking references bears repeating - you need to verify that your vendor has successful rollouts, not just shelfware that no one ever uses. You need to be sure that they have helped customers of your size, in your region and in your industry. If they have a customer similar to you in your city that you can meet in person, that's the perfect reference. If, on the other hand, the potential vendor you're investigating is willing to lie to you about references, then there is no reason to trust them regarding whatever else they're telling you.
So what steps can you take to ensure that you'll be learning what you need to learn about the entity you're investigating? How can you be sure that the reference they’ve given you is real, not somebody's mother?
Well, it's time to don your detective hat and investigate!
8 Simple Steps for Confirming the Validity of References
1. First of all, you should be a little suspicious if the reference calls you. Who has time to do that? If this happens, kindly tell the person that you are unavailable at the moment and schedule a time to call him back.
2. Have your potential vendor supply you with a full name, title, company phone number and email address for all of the references that you will be contacting – at least three per vendor. Do not settle for Hotmail, Gmail or Yahoo email addresses, or any other temporary email addresses that are not indicative of a real company.
3. This may sound obvious, but you actually have to call all the references and talk to them. Most people never do this. It takes time and effort, but you are potentially averting wasted money, time and effort for your company, which makes it worth it.
4. Do a search on Google to ensure that the reference company actually exists. Does it match the Internet domain name in the email address given to you by your potential vendor? For example, if the reference company's name is "Addleman Architecture" and the email address is liza@addlemanarchitecture.com, then go search for that company name and see if www.addlemanarchitecture.com is one of the top results.
5. Examine the company’s website for business model appropriateness. Is this reference company similar to your company? For example, software used by hotels may not be appropriate for your accounting consultancy. Are you a business that sells mostly to other businesses, or do you sell directly to consumers? Does your company handle many transactions/customers per year or just a few? The references that the vendor provided you should be as similar to your business as possible.
6. Call the reference company's main number, not the direct number of the person you were given. Is this a real company with a real phone system? Is there an automated company directory? When possible, get a receptionist to confirm that the reference executive works there. Tell them why you're calling, and ask if they know who else might help.
7. Leave a voicemail message and also send an email. Follow up your calls with a thank you email to the address given to you by your potential vendor.
8. If you have any suspicions that the reference company is fake, use http://nikkelhost.com/whois/whois.php to see how long their domain name has been around and who created it. You can also match up locales to area codes on Wikipedia at http://en.wikipedia.org/wiki/List_of_NANP_area_codes in order to ensure that your reference is really where he says he is located.
Beyond this, there are many things to learn from the reference. How many phases did the potential vendor have in the rollout of the software? What problems did they encounter, and what would have made things easier? Were all the people in the company as professional and easy to work with as their friendly salesperson? Were there any expectations that were set during the sales process but were not met during rollout and product usage? Are all the functional areas of the software being used that they expected? Why or why not? Gleaning this data from the reference will help all three of you – the reference, the vendor and your company – communicate properly. It will also most likely convince you that you are talking to a real satisfied customer.
Any company can easily give you one or two reference customers that are "friends of the family" - business owners who are too closely linked with the vendor to be objective about their performance. This is why insisting on references in your location or industry is important, and why you need several to check up on.
If you follow these simple eight steps, you won't be hoodwinked by an unscrupulous vendor, and you'll be much more likely to get a software solution in place that will lead your company to greater business success.