“How many customer references should I have in my program?” We routinely get this question from reference program managers, and the answer isn’t as cut and dry as one would guess. And it’s important to get it right, for these reasons.
Recruiting customers for your customer reference program requires effort in the form of clearly communicating the needs, cajoling relationship owners to nominate, vetting candidates, contacting nominees, and onboarding new members. Multiple stakeholder departments and personnel are involved. If relationship owners (e.g., customer success managers) are incentivized with cash or prizes—for quality nominations—the effort has hard costs too.
What’s the ultimate goal of all that activity? To assemble a pool of customer references that meet the needs of Sales, PR, events, digital, demand gen, and all the other stakeholders that rely on references to get their jobs done. Will just any reference customer do? Not just no, but hell no. Buyers have high expectations. They won’t settle for a client reference in a different industry, with a different use case, or even a different size organization. The customer reference database must be broad and deep enough to satisfy the reference needs that fuel the company’s specific growth goals.
How Reference Quantities Are Typically Determined
When a program goal is to “increase the reference database by 100 references this year,” “have 25% of our customer base be referenceable,” or “grow our database by 20% this year”—with no connection to stakeholder demand—that goal setter is missing the point: to satisfy actual demand. Given that a program manager has a finite amount of bandwidth, and so do the co-workers asked to help identify and recruit reference candidates, this approach is simply wasteful.
How the primary goal of meeting reference demand gets lost?
When there’s always so much going on, it’s easy to lose track of the raison d’etre. One or more of the following factors causes a temporary loss of reason (“What are we doing this for again?”):
- A mindset of “beggars can’t be choosers” underpins the recruiting effort. With this attitude, any new customer reference is a good addition.
- There’s pressure from salespeople or CSMs to make a customer a program member for the benefits. The program manager doesn’t want to offend their co-worker or demotivate them to nominate in the future.
- There’s pressure from “above” to increase the database by an arbitrary number that seemed appropriate (“Well, we should have at least 25% of our customers in the reference program!”).
- The number or percentage increase looked good on the program’s annual goal list, and it’s achievable.
4 Steps to Determining Reference Quantities
#1 Understand which company growth goals will require customer references
Some of your company’s growth strategy won’t translate to reference needs, but those will be the minority. If one of the goals is, for instance, to “increase Q3 revenue by 20% from mid-sized healthcare organizations in the Midwest region using the new cloud product,” you’ve got a good idea of the kind of reference requests to expect. Based on the relevant growth goals, start identifying the general categories of reference customers needed. You’ll refine these categories after completing steps 2 and 3.
#2 Estimate both current and near-future demand
The customer reference program must support the current pipeline of reference needs, as well as what will be required 60, 90, 120 days into the future. The current demand is in the data from the Sales team. Report on open opportunities and identify segments that’ll represent the bulk of reference needs based on estimated close dates. Look for patterns in the data. These could be industry, geography, product, specific channels, and of course, combinations of criteria.
For needs outside of Sales, consult with leaders of your stakeholder teams (PR, Social Media, Demand Gen, etc.). They’ll have their own objects and action plans. Some elements of these plans will require customer advocates, and a calendar to go with it. In some instances your colleagues will already have customer stories in mind (e.g., an email campaign featuring customer X, with a product Y story). There will also be opportunities for you to suggest ways to best leverage the customer references you know well. Again, look for patterns in the reference needs that emerge. Are there “stories” of a particular type that will be needed (partner success, integrations, cost savings)? What segments are most urgent (industry, product, use case, enterprise size)? What are the time frames for various reference needs? You’ll need these deadlines for new references to be of any use.
#3 Identify database gaps
Once you’ve obtained the expressed or anticipated demand, compare those needs with the existing database. Assuming you have some pool of customer reference data to start with, you’ll need to assess whether or not the data has been maintained and how confident you are in its accuracy. There is some amount of churn within any customer reference database. Before you finalize your gap analysis, review existing data and remove any accounts/contacts that are no longer referenceable.
Consider the volume of anticipated Sales requests. How many reference customers are typically needed for each opportunity? How often can you use any given reference contact? Knowing your company’s Sales process in the context of customer references is essential to arrive at an accurate estimate. Our How Well Do You Understand Your Company’s Sales Process blog post delves deeper into the topic of gaining insight into your Sales team’s practices and operations.
The same exercise is needed to evaluate non-Sales reference needs. Perhaps the event team will need more VPs and CxOs for virtual events, or analyst relations is going to need 15 customers for the Forrester Wave, with specific criterion, in 30 days. Is the program prepared to meet those needs?
This data analysis will save you lots of time down the road, ensuring you build your reference database efficiently on the right criteria. Remember, you have limited time and can’t afford to cultivate reference customers no one needs. Start prioritizing what gaps you need to fill first. Not all gaps are of equal importance. After addressing the top priorities, you can move down the list.
#4 Fill the data gaps
There are many decisions to be made concerning the best ways to fill your data gaps. Here are a few considerations:
- What are your best sources of new reference customers? CSMs? Sales? Partners? Customers?
- What level of support/participation can your expect from the various identified sources?
- How quickly do you need results? Will an incentive be required to stimulate participation?
- What are the best ways to communicate your specific needs (meetings, newsletters, Slack/Chatter/Teams channels, etc.)
Whatever means you choose to use for your recruiting effort, be sure to communicate what you’re looking for precisely in the interest of both time and effort expended by all parties and because there’s a customer relationship aspect to consider. Imagine you’re the customer. Your CSM proposes membership in the program, explains the benefits (whatever they may be), and gets you excited to participate. Then, because your customer story isn’t in-demand (on the priority list), you don’t get a request in 3 months, 6 months, maybe ever. That’s not the message you want to send to a valued customer.
For more information about customer reference recruiting strategies, check out our Building Your Customer Reference Advocate Army blog post.
What happens next?
Each customer reference program manager defines a process for onboarding a new customer into the program. Some strive to meet with each new member and walk them through the various opportunities, time commitments and benefits. A live conversation establishes a direct relationship, which can pay dividends down the road. Direct connection is a good way to ensure the customer’s reference profile is complete and accurate. You might even discover they’ll do more reference activity types that you had been led to anticipate. Score! Regardless, this is the labor-intensive approach, and it may simply be impossible. At the other end of the spectrum is providing a way for customers to self-nominate (e.g., email campaign + web form). Any customer who “self-nominates” is automatically accepted into the program, and that’s the extent of the onboarding “process.” Whatever way you go, be sure to document your process and follow it consistently so that as your company grows, the program can scale accordingly.
Hopefully, after reading this post, you understand why an arbitrary count or percent growth goal picked out of thin air is meaningless. Goals of this sort will waste valuable time and energy, and in the end you’ll be in no better position to support your company’s reference needs than before. This aspect of running a program is more scientific than many imagine. Educate your manager and executive sponsors on the right way to answer the question, “How many is enough?” It is important for stakeholders to understand that it isn’t purely a number but having customers with the matching attributes. We wish you great success on your mission to have the right reference for each request and showing your executive team what a real reference program can do!