Customer References & Buyer Confidence
By David Sroka, Point of Reference
I can’t think of a more humbling, stressful purchase decision than the one we go through when buying a home. You’re presented with multiple options, each with a list of pros and cons, price/feature trade-offs and those things that are hard-to-reach certainty on – like compatibility of the neighborhood and specifically, the neighbors. Oh, and your decision will have a lot to do with your personal (and perhaps family) happiness for a while. No pressure.
To reach a decision you have to process a lot of information, some provided by the salesperson (realtor), some you find online, your peers (friends & family) will happily weigh in, but in the end there is a significant gut instinct component you just can’t get around.
So many of these buying decision factors apply to B2B buyers. The consequences of a decision are different, but still weighty:
- How their decision is perceived by peers and leadership
- Impact on their future in the company (e.g., promotions)
- Co-worker satisfaction with the choice they made
- Impact on their personal happiness (Did the decision make their life better?)
As Brent Adamson, Distinguished Vice President, Gartner has written about and presented on, all the sales motions that go on must ultimately help build buyer self-confidence in making the decision. That’s different from a buyer’s confidence in a vendor’s ability to delivery. This new perspective means all these sales and marketing activities need to be re-thought in terms of bolstering the buyer’s confidence.
Without that buyer’s confidence, you lose—to a competitor (who go the buyer to that confident state before you) or status quo. Either way, it’s still a loss.
Status Quo Bias
On average over 60 percent of B2B evaluations end up with no decision: status quo. Why? A pesky human attribute the psychologists call status quo bias. We put every decision through a loss vs. gain analysis. Research on how we avoid loss (i.e., loss aversion) found that the potential for loss weighs more on peoples’ minds than potential benefit. Negative wins over positive. We are in fact twice as likely to make a decision based on avoiding loss than realizing a gain.
What does that mean for B2B marketers and salespeople? Corporate Visions wrote, “If you truly want to differentiate your value, you need to tell a powerful, disruptive story that inverts your prospect’s perceptions about staying the course versus changing.” But more than that, the buyer needs help sifting through all the information to isolate what’s relevant, and ultimately help achieve the necessary confidence about their decision logic.
Enter Customer References
You may have noticed one exclusion from the sales and marketing activities listed above. Customer references. When references aren’t a serious component of a company’s go-to-market strategy it is both comical and tragic.
All the other activities produce messaging from a common source: the vendor. Customer advocates speak for themselves, from the most informed perspective. They have lived with the vendor, lived with a solution, seen results, and all in a real world business environment. They offer the most persuasive and reassuring insights a buyer could ask for. Those insights can come in many forms (written, video, audio), but a live conversation with context-specific Q&A is the ideal way to get resolution on critical concerns or uncertainties.
CxOs don’t tend to allocate much attention to this part of the sales and marketing strategy. It’s not new. It’s not sexy. Too often the reference management function is not even elevated to a professionally run, bona fide program. But if cultivating buyer confidence through customer references was recognized as the most efficient way to win deals (fact), a customer reference strategy would be part of the sales and marketing DNA.
Customer Advocate Best Practices
Focusing just on the sales team, it’s worth noting that most salespeople are never trained on how to use customer references: when to use them, how to find them, which ones will be most valuable to the buyer, and how to show gratitude for their help.
When to use
Sales leadership should have the use of references defined/prescribed at various stages in the sales cycle. Early stages call for the use of customer reviews (e.g., TrustRadius), case studies, customer videos, etc. Later stages require ROI studies, reference calls and site visits. Because reference databases often don’t exist there’s a scarcity mentality about using the limited number of references people know about. If that information was centralized and the supply was ample, salespeople would not hesitate to arrange reference calls, for instance, before being asked, which could be an important competitive differentiator.
How to find
This should not be a major chore. There should be one place. The process should not disrupt the entire sales team or customer success team due to a barrage of Slack messages or email. The relationship owners of reference relationships (e.g., customer success managers) should be aligned with the company’s customer reference strategy, and rewarded for their ability to maintain a pool of reference-ready customers.
Which ones to use
The salesperson should be able to find customers that line up with the buyer’s characteristics. Not just any customer reference will do. Only relevant perspectives matter (e.g., same industry, size, use case, geography, peer level, etc.). If vendor #1 connects a buyer with well-matched customer references, and vendor #2 doesn’t, the buyer’s self-confidence will be validated by vendor #1’s references.
How to show gratitude
A strong customer reference can be worth 5-10x their company’s contract value. This fact should cause leadership to take notice. That $50,000 per year account has a contact who has helped influence $250,000 of new business by giving the buyer the confidence necessary to make a change, and make a decision. That’s worth showing some gratitude, isn’t it?
There are many options: invitation to the product roadmap advisory board, elevated service SLAs, complementary event attendance or professional services, etc. At the very list, a gift that reflects the customer’s personal interests is appropriate. Salespeople will feel good knowing customers are rewarded for their contributions, and make them more likely to leverage these valuable resources.
Level Up Salespeople
Depending on the study, somewhere between 50% and 70% of salespeople hit their quotas. That leaves a lot of room for improvement. Salespeople have between 5 and 15 apps/tools at their disposal, plus robust lead gen, sales methodology training, social selling training and so on. But too often they’re left to figure out the “customer reference thing” on their own.
What if they were provided with the tools and training to maximize the use of customer references? How many average or below average performers could move up a level in performance if 1) they understood the importance to helping a buyer feel confident in their decision, and that 2) customer references were the most effective means for building that confidence? There’s little to lose, and much to gain by abandoning the disorganized, inefficient customer reference status quo.
In case you were wondering. Yep, we practice what we preach, starting from the beginning of our buyers’ journeys.
CEO, Point of Reference
Since 2003, Point of Reference has been powering B2B customer reference programs that fuel business growth and fortify brands. We believe advocates tell their customer experience stories better than anyone and increase our clients’ odds of winning opportunities in the process. By combining decades of domain expertise with our purpose-built customer reference management technology, native to Salesforce CRM, Point of Reference allows companies to inject relevant customer references and related content at critical points in a sales cycle, attribute reference activities to revenue, and orchestrate coordinated reference activities that boost productivity. For more information, visit http://www.point-of-reference.com.