Hard Numbers Back Customer Reference Programs

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Do hard numbers back the value of customer reference programs? Yes. Whether you’re looking at shortening the sales cycle, increasing customer retention, or improving sales productivity, the data is clear: customer references and content deliver quantifiable ROI.

“References have an 80-85% likelihood of influencing a B2B purchasing decision. The most highly rated of any marketing activity.”

Gartner

B2B sales and marketing professionals expect to provide customer advocates to prospective buyers at some point in the cycle. It is an accepted part of any B2B sales transaction for a good reason: compelling references seal deals.

  • References have an 80-85% likelihood of influencing a B2B purchase (Gartner)
  • 53% of B2B purchases rely heavily on peer recommendations (Demand Gen)
  • 95% of B2B professionals trust peer and colleagues (IDC)
  • One-to-one peer recommendations, original research, and product reviews are the most influential in affecting purchase decisions (Content Marketing Institute)
  • 80% of B2B buyers base purchasing decisions on “direct or indirect customer experience.” (SiriusDecisions)

What’s more, with a heightened emphasis on using targeted customer content, establishing a program dedicated to developing and delivering this content seems obvious and proven.

“Formal advocate marketing programs show quantifiable positive impact on business success.”

Forrester B2B Advocate Marketing report

The Need for Proof

Yet, a surprising number of organizations still don’t have a dedicated program to support critical customer reference activity. Is it because these programs’ benefits are more marketing lore than empirical data as few organizations track ROI or revenue influenced?

  • Just 35% of B2B companies have a formal process to identify and recruit top customers as advocates. (SiriusDecisions)
  • 83 % of those same organizations state references are “critical” or “valuable” to sales cycle. (SiriusDecisions)
  • Less than 10 %of marketing program dollars to customer advocacy and engagement. (SiriusDecisions)

It seems some quantitative ammunition is needed to bolster the bid for more budget or to corral a C-suite champion, so we’ve curated the statistics from respect sources that substantiate the value of these programs and running them as a strategic initiative.

How Important are Customer Insights? Very

Customer evidence is essential and highly valued by B2B buyers – more so than other information.

  • 53% of B2B purchases rely heavily on peer recommendations (Demand Gen)
  • 95% of B2B professionals trust peer and colleagues (IDC)
  • One-to-one peer recommendations, original research, and product reviews are the most influential in affecting purchase decisions (Content Marketing Institute)
  • 80% of B2B buyers’ purchasing decisions are based on “direct or indirect customer experience (SiriusDecisions)

Process Disruption for Sellers

To evaluate the significance of references, we must first acknowledge that the B2B purchasing journey has fundamentally changed how prospective customers investigate both products and purveyors. Until companies appreciate this paradigm shift, they won’t recognize why a customer reference function is so essential – now more than ever. Long before an organization becomes a customer, its buyers are forming an impression of potential vendors. Rather than early engagement with the sales organization followed by a linear progression through a sales funnel, buyers enjoy the ubiquity of information derived from a multitude of channels to educate themselves and make decisions.

  • B2B prospects conclude 65-90% of their purchase decision before formally contacting the vendor’s Sales department. (Forrester)
  • 53% of B2B purchasers rely heavily on peer recommendations (Demand Gen)
  • 95% of B2B professionals trust peers and colleagues when evaluating a technology purchase (IDC)

Just-in-Time is Just Too Late

By the time a prospect is in conversation with your sales team, they’ve researched solutions, narrowed down the possibilities, and have an excellent idea of what they want. They’ve read your product’s reviews on G2 or AppExchange, and leveraged social media channels, such as LinkedIn, to find your customers and reach out to them on their own – all before making contact with your company. Organizations including Forrester, Gartner, International Data Corporation (IDC), and Sirius Decisions have documented this critical evolution. Customer reference and sales strategies must adjust to these realities:

  • On average, B2B organizations have already completed 57% of the decision-making journey prior to contacting a vendor’s sales team. (CEB)
  • 66% of the buyer’s journey is devoted to in-house evaluation, advice from peers, and industry experts’ guidance. (Gartner)

The Changing Role of Sales

The official sales process is now concentrated into the final stages of the buyer’s journey. Acting as a consultant, including connecting buyers with appropriate customer references, is now a more significant sales function component. But that doesn’t mean the sales team has time on their hands—quite the opposite. The condensed and accelerated sales process puts additional pressure on salespeople and their organizations.

  • Sirius Decision reports that only 54% of B2B sales reps are making quota.
  • Only 39% of the a B2B salesperson’s time is spend engaged in selling activities according to a McKinsey Global Institute Report.
  • 59% of B2B sales representative’s time is spent on non-revenue generating tasks. (SCO Insights)

The Call to Action

Companies must do everything in their power to minimize the time sales representatives spend on non-selling activities, including providing easily accessible and accurate customer reference information. A dedicated customer reference program can increase pipeline flow, shorten sales cycles, improve sales force efficiency, foster corporate unity, and strengthen customer loyalty. We hope this avalanche of supporting data leads to establishing a customer reference program in your organization. If you’re ready to build a kick-ass program and don’t have time to waste,  we’re here to help.

“36 % of high-performing organizations indicated that at least one-third of their eligible customers are participating in references and advocacy.”

SiriusDecisions

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