A customer reference is defined as a ‘positive story that customers can share about your product or service; a story that has the power to create demand, impact sales, or close borderline deals’. References can be written - testimonials are a good example - but, for the purposes of this post, I’ll focus on the verbal ones. A phone call and a video chat are somehow more real, more trustworthy, and they are what most prospects are thinking about when asking for references.
Looking for practical tips setting up your reference program, check out the blog post we have on the topic.
In the B2B environment, a quality customer reference is worth its weight in gold.
- 60% of sales prospects will ask for a reference.
- 70% of them will ask for more than one.
- 50% of those sales are lost because the reference provided didn’t cover what the prospect was looking for.
However, Peter O’Neill, research director at Forrester, notes that the average spending of $250,000 that goes into reference programs (and climbs to millions of dollars for large enterprises) is ‘too much, too late’ (paywall).
I’m not trying to say that customer reference programs need to be abandoned (and neither is Peter O’Neill). They still have immense value, especially for B2B and SaaS companies that need to convince prospects that they’re a good match. Nothing beats a good use-case in that respect. What I am trying to say is that we all need to rethink how we approach customer references in the age of advocacy.
Why is that?
Because your business website is no longer the place where your prospects look for information. In fact, most of your prospects are well into their buyer’s journey before they contact you (in fact, it’s up to 70% done). Your salespeople can’t do very much at this point.
Since most B2B buyers look for information online and consult their peers, it’s your advocacy program that needs to do the work and get you on the shortlist. Customer references are the icing on the cake; they help you win the race, but you will be rubbing elbows with everyone else at the start line - unless you’ve got a killer advocacy program set up.
The key to getting stellar references is communication and relationship-building. Allow me to demonstrate by recounting a nightmare one sales reps has gotten himself into recently.
How Not to Do Customer References -
Why Relationships Are Important
A couple of months back, my phone rang early in the morning.
‘Hello?’ - I said.
‘Hi, sorry to bother you this early. I’m Matt and I’m calling from XYZ company. We’re on the fence about a SaaS solution from the ABC company and Tom, their salesperson, gave me your number, saying you will be happy to chat with me about it since I have some general questions’- said a voice on the other end.
I was pretty surprised about this, and the reason why will become abundantly clear in a second. ‘Sorry, can’t really do that’ - I said. ‘We dropped that service a year ago because it was useless to us.’
‘Oh’, said Matt. ‘Sorry to bother you’.
That was a reference call from hell. It ticked so many boxes on the ‘What Not To Do’ checklist that I’m surprised that Tom still has his job (he does, I’ve checked). What was wrong with the call? Except for the obvious - it was not a ringing endorsement it should have been - there are so many small things that were bad about it. Needless to say, they all could have been avoided with a bit of planning and preparation.
As I said, it’s all about relationships.
Had Tom bothered to check with me about this call before handing over my phone number, he would have thought twice about it. Heck, had he only had the presence of mind to see if I was still a customer, this could have been avoided. Maybe he didn’t have the info? Maybe his reference manager screwed up? Maybe he was just lazy? Whatever it was, he dropped the ball, and that cost him an enterprise-level customer.
My colleague Jorgen will guide you through an easy process of managing your customer references through Ambassify in our next post. You can now connect Ambassify to SalesForce and ensure that your salespeople have all the relevant info they need when they have to connect prospects to current customers. Jorgen will also talk about how to approach your customers about references, so make sure to give his post a thorough read.
Before I sign off, I want to talk about the other side of things - handling prospects who ask for customer references. One thing might come as a huge revelation - you don’t have to bend over backward for every single prospect.
A Prospect Asked for References? Don’t Panic!
Most salespeople go pale when people ask them for references, even if they are prepared and can supply them. If that happens to you, you’re already on the back foot and loosing. What you need to do is take control of the situation and see if the prospect is worth the bother you and your customers will potentially go through when granting their request.
Here’s how you handle the situation:
- Acknowledge the request and ask for a WHY - this is the first thing that Tom from my story should have done. Had he had a why, he would have known that his prospect was searching for general information, and then he could have handled it himself.
- Explain that you are willing to give references at the right time - the right time is when they are ready to make a decision, or when they are stuck between two solutions and can’t make up their mind. Tell your prospect that you have to contact your customers and check things with them. The biggest mistake Tom did was not knowing how I felt about his service before handing my phone number over to Matt.
- Don’t allow yourself to be bullied - you should be willing (and able) to connect prospects to customers. But only when the time is right. Don’t be a pushover - if you grant reference requests to everybody, you will most likely be faced with reference burnout. To avoid that, know when it’s time to connect a prospect to a customer and build a nice pool of references that you can call on.
Business is tough, I know that. You want to make sure you get every possible customer, and you will do whatever it takes to bag them. Still, being a doormat for demanding prospects won’t get you too far, so be careful of that. At other times, customer reference requests are legitimate. To make sure you’re prepared for that eventuality, check out Jorgen’s post about what you need to do to ensure quality references, and how to easily keep track of everything with an advocate community platform like Ambassify.