When you’re starting a brand new customer reference program, or re-starting a program, it’s important to have realistic expectations. Nominations and Reference Requests: these are two fundamental “motions” of a reference program. One correlates to building your reference database, the other with effectively using that database: two sides of the same coin.
Remember in elementary school math how you learned to estimate? Estimating ensures you’re on the right track. If you estimate 30, but your calculation yields 62, you know something is off. So how does this apply to nominations and reference requests?
When you seek reference nominations from co-workers in sales, customer success, product management, professional services, etc., you can make some assumptions to arrive at an estimate. Let’s think about CSM nominations.
We’ll start with the common sense approach first.
- If you have 50 CSMs, then you would think that each has at least 1 customer to nominate, right? (If not, there are bigger problems.)
- So, you should expect to get at least 50 nominations.
- Does it sound crazy to ask CSMs to nominate their top 3 advocate accounts? Run that idea by your colleagues in CS. If it’s not a stretch, then you should expect 150 nominations!
Another way to estimate is by percentage. Some percentage of the CSM’s assigned customers are going to be advocates, or strong advocate candidates. How do you get to that percentage? The most objective way is to consider recent customer feedback.
- Using round numbers, imagine you have 50 CSMs who manage a combined 500 accounts.
- Let’s say the last customer satisfaction survey, or Net Promoter survey, had 300 responses and of those 150 were a) “somewhat” or “highly” satisfied or b) promoters (provided a 9 or 10), respectively.
- The best case scenario is that 50% of accounts, or 250, are potential advocates (150 out of 300 responding accounts) when extrapolated across the entire base.
- The worst case scenario is that 30% of accounts, or 150, are candidates of 500 (total base).
With this information, you should expect a nomination campaign to yield somewhere between 150 and 250 nominations, assuming just one contact per unique account. Of course, it’s very possible that each account has more than one happy contact. Stick with one contact per account if you want to be conservative, or be more ambitious with an assumption that 10, 20 or 25% of accounts will have two contacts with reference potential.
To estimate reference request activity you need to understand how sales opportunities work in your organization (this post provides a deeper dive). In short, you must have answers to these questions:
- What percentage of opportunities require references to close?
- How many opportunities close each month, on average?
- How many reference accounts are requested by a buyer, on average?
- You survey the sales team and learn that 75-80% of opportunities require references.
- In the same survey you ask how many reference accounts, on average, are requested by buyers, and learn the number is 1.7.
- You do some opportunity analysis of the past 12 months and find that, on average, 85 net new customer opportunities close each month. These aren’t upsells, they are new logos.
What you should expect in terms of request volume is of 85 closed opportunities per month, 64-67 require references. With an average of 1.7 reference accounts per opportunity, there should be 109-114 unique account requests each month. Before settling on that number, consider that some salespeople won’t look for references outside their own “back pocket” of references. The more tenured salespeople will do this more frequently, while the newer salespeople will need your help or that of their other colleagues (e.g., CSMs or AEs). This is more art than science. You’ll want to discount the 109-114 estimate by some percent to account for the “back pocket” references. Maybe the number is 10 or 15%; it’s an intuition call.
It’s important to set expectations for yourself and your leadership when it comes to nominations and requests. You don’t want to be too conservative and “smash” your numbers, with no meaningful traction to show for the program. On the other hand, you don’t want to set sky high expectations and burst everyone’s bubbles, thus losing attention/momentum. By using the estimation approaches outlined above, you’ll be able to establish goals that are attainable and impressive. If you miss your estimates, you’ll find our posts on executive support and the reference “black market” useful in planning your next steps.