Do customers serve any other purpose other than warranting current and future income? How can they help attract potential customers and increase sales? Marketing Professor Tuck Siong Chung, ESSEC Business School Asia-Pacific, and his fellow researchers explore how customer referencing helps firms build credibility and value
Customer referencing can also be used as a sustainable source of competitive advantage, especially when customers are well known and respected.
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Have you wondered what the logic behind the famous toothpaste advertisement that claims nine out of ten dentists recommend the toothpaste is? As the market becomes increasingly homogenous, certification from a credible source acts as an effective way to grab the customers’ attention and convert it into sales. And who better to be a credible source than the current clients.Â
Why do firms engage in this process, even though it isn’t mandated by regulations for some of their customers? Their primary reason is that the credibility offered by customer references lowers the uncertainty, perceived risk, and searching costs faced by potential customers – all of which contribute to increased sales of the firm.
Customer referencing can also be used as a sustainable source of competitive advantage, especially when customers are well known and respected. Furthermore, it can be a less expensive and more effective option to gain customers’ attention compared to traditional advertising and marketing campaigns.