If an employer is seriously considering hiring your firm to manage their retirement plan, at some point in the sales cycle, chances are they will ask you for references.
It goes without saying that good references can be an invaluable resource to help you close new business. The interesting thing about reference requests is that by the time many prospects ask for them, they have often already decided, or at the very least, are predisposed in their opinion about whether they want to hire your firm or not. The reference check is sometimes a mere formality. After all, who provides bad references, right?
But it is those situations where prospects are on the fence about making a change and hiring you – or when you are in a close competitive bid situation with other retirement practices – where references can play a critical deciding role.
To maximize the value of your references, you want to avoid some common mistakes.
The first is to just turn over a simple list of client companies with key contacts. This is a missed opportunity, as you cannot control a prospect’s diligence in reaching all of your references. And many times, due to lack of effort (or inability to connect with your contact), they don’t. So it is important that you still find a way to communicate the value you have delivered for each client reference provided to a prospect. To accomplish this, you should create “reference summaries.”
A reference summary presents each client reference in a mini case study format. In other words, following the name of the company, key contact and contact information, include one or two paragraphs describing actions taken over the tenure of each reference client relationship. Be creative. Reference summaries can describe fund and/or investment strategies applied, plan design strategies implemented, participant education and communication policies employed, the introduction of automatic plan features, steps you have taken to improve fiduciary governance, or even more.
Below the reference summary description, include bullet points highlighting the results or outcome of your work:
• I increased participation rates by X %
• I increased deferral rates by X %
• I lowered plan costs by X %
Another benefit of reference summaries is they can “suggest” what questions your prospects might want to ask about your firm and services when they do connect with your references. Many times, you will find that the prospect will ask your client questions directly related to details you highlighted in your reference summary. This is very advantageous.
A second common mistake when providing references is to assume that the prospect making the request will check your references in a prompt manner. As sales professionals, we know the importance of “striking while the iron is hot.” Delays in reference checks can unnecessarily drag out the sales cycle.
Try and get the prospect to commit to a timeframe for checking your references. This request will seem quite reasonable if you explain that you need to let your client references know when to generally expect a call. Getting this commitment will usually push the prospect to complete their reference due diligence in a timely manner.
Lastly, whenever possible, try and provide references that bear similarities to the prospect company making the request. For example, if the company requesting a reference is a small professional services firm, a restaurant chain is probably not the best reference match. If your prospect can easily identify with the references you provide, it will reflect positively on you.
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