Please re-read the title of this article. No doubt, Customer Reference Efficacy is a mouthful and probably a Sales & Marketing metric you rarely think about, if ever.
Yet if you were to ask sales leaders how important References are to sales cycles you would get quotes like the following:
“For last 25 years, we have been training and coaching world-class sales teams how to negotiate and close deals. Foundational to our training is lowering risk or the perceived risk of the buyer. There is no better way to do this than providing live access to a customer reference. It is a great differentiator that separates you from your competition, elevates you in the eyes of your customer and results in higher win rates, price premiums and better long term relationships” – Ron Hubsher, CEO Sales Optimization Group, Author of “Closing Time: The 7 Immutable Laws of Sales Negotiation”, Patent Holder for Sales & Negotiation Optimization
“I’ve found that our customers are often our best spokespeople – even our best salespeople….” – Rick Scearbo, SVP Sales & Marketing, Xtiva Financial Software
“Getting a prospect on the phone with a strong reference customer is the ultimate close strategy.” – Andrew Brown, SVP Sales and DMS GM, Iron Mountain
So what does it take to drive Customer Reference Efficacy?
It takes a current state assessment, followed by a commitment to people, process and technology. It also takes time!
So how do you think about an assessment?
Let’s start with a simple framework to identify where you are on your journey to enabling a Reference Efficacy strategy?
- Level 1 – Opinion: Clearly recognized need of references to close deals. (Typically, salesperson uses their personal closest client relationship, supplemented by emails TO ALL, looking for help.)
- Level 2 – Data: You can report Sales had a need for 450 references last year. (Clearly for references “That you are aware of.”)
- Level 3 – Metric: Sales provided references to 300 customers last year. We were unable to fulfill 150 requests due to specificity of the prospects needs. (timing, industry, problem etc..)
- Level 4 – Analytical: Of the 300 references we provided, we won 75% and influenced $12 million in Revenue. Of the 150 we could not connect “the right” reference to the prospect in a timely manner, we won 40%. This created an opportunity loss of $4.5 million.
- Level 5 – Insight: We know when we match titles, industry and pain points by supplying a reference in context to “Buyer”/”Sales Opportunity” we win 86% of the time. We have fully integrated references into our sales process and have enabled software driven workflow and reporting against CRM data. Our dashboards showcase Drivers and help with Predictive Analytics,
In our experience very few companies are truly at Level 5 Enterprise wide. That said, it is becoming the goal of many of our customers. These customers are leaders in their fields and a who’s who of the Fortune 1000. Numerous 2016 purchasing studies have illuminated that Customer References are the most critical company asset to closing business.
Reference Efficacy deserves the investment of time and resources. There is no better way to accelerate sales, than leveraging the Voice of Your Happy Customers.