Get the Most Out of Customer References

We often experience that customer references are given great importance in a procurement process, and we also believe it is relevant to check references for potential suppliers as part of the process.

However, it is important to emphasize that all suppliers have customers who are happy and satisfied — and all suppliers have customers who are dissatisfied. You can therefore draw only limited conclusions about a supplier or system by speaking with just 2–3 references.

… all suppliers have customers who are happy and satisfied, and all suppliers have customers who are dissatisfied!

The customers that the supplier themselves point to as references are, by definition, positively inclined toward the supplier. If you find your own reference and they are not positive, you cannot necessarily use this for much. There may be many reasons why the customer is not satisfied — and it is not necessarily the supplier’s fault. It is also important to remember that you may be speaking with a party who has a stake in a potential conflict.

Another factor is that no one likes to say: “We chose wrong!” Once a supplier and a system have been chosen, organizations will typically be loyal to that choice externally, and it is only in rare cases — where the collaboration completely breaks down — that problems become visible to outsiders.

There is also no doubt that as soon as an organization has chosen a system, a process begins — whether one wants it to or not — in which the organization gradually becomes part of that supplier’s “ecosystem.” Typically, internal competencies are built up, the supplier’s concepts and terminology are adopted, and employees — especially within the IT function — are gradually assimilated into the supplier’s world. Not infrequently, some individuals develop such a strong professional bond with the system that they choose to leave the organization when the system is eventually replaced. This makes it increasingly difficult to remain 100% objective about the system and the supplier.

One should also be aware that it is not uncommon for the customer and supplier to agree, during contract negotiations, that the customer will act as a reference in exchange for a discount on the system price.

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With all that said, we still believe that taking customer references makes good sense. However, it requires thorough preparation and a clear understanding of the specific aspects you want to have illuminated — and that you apply proper source criticism! You must also always ensure the opportunity to speak with the reference without the supplier being present.

A reference can never answer the question of which supplier or system you should choose — but when used correctly, references can often provide valuable insights for planning the collaboration with the chosen supplier!

A reference can never answer the question of which supplier or system you should choose.