Why do firms only give out good references?

Before making most purchases—large or small—I do my research. Amazon, Yelp, REI, Angie’s List and retail sites all give me opportunities to read client references. When I read reviews, I first read the five-star reviews and one-star reviews. I want to hear what people love about a product and what they hate.

Five-star reviewers represent the most loyal or generous clients. Often, they are the most ignorant/naïve about the product/category or they often have a completely different buying criterion than I have. One-star reviewers are usually disaffected Internet trolls, but many times they have very valid feedback on the product that comes from unique demands and uses.

When products or services do not have any bad ratings, I wonder what I am missing. More importantly, I question how the company would respond if I had a bad experience. I want to know the good, the bad and the ugly. Ultimately, I make purchases because I am confident in my ability to see the truth between the two extremes.

Professional services firms don’t share client references with such transparency.   They share feedback provided by their happiest and most loyal clients.   Herculean effort goes into maintaining “happy” clients lists.   I say Herculean because one day the client may be happy, and the next day there may be a problem with delivery, billing or a promised result. Why do firms go to all this effort? That’s easy: they think it will get the business.

 

But, the thing is, that is not how clients buy.

 

I seldom buy a bike or related component without tapping the collective knowledge and experience of my cycling race team. The same is true for the services I buy: design, accounting, legal—painting. Information flows quickly and easily in our highly networked world. By sending just a couple of emails, I can almost always find someone connected to a potential service provider. We cannot hide from our reputations. I propose an alternative approach.

Let your prospects speak to any of your clients—satisfied or not. Did that make you shudder? If so, then you have other things to worry about before getting new business.

Clients are smart business people; to think otherwise is to be condescending and naive. Smart clients know that no service provider is perfect. Smart clients know that problems arise during complex projects. Smart clients know that all engagements do not realize their potential. Smart clients know that it is better to work with people who will work with them to resolve issues.

Sharing good and bad client references alike allows you to demonstrate to a prospect how you work to resolve issues when they come up. Do you nickel and dime clients? Do you hold to the letter of the contract? Do you have skin in the game? Are you willing to change direction or people? Are you weak and cut and run?

Take away

There are legitimate reasons to not give a client’s name as a reference: confidentiality requirements, on-going negotiations or simple troll-like nastiness on the part of the client. Beyond that, there is no legitimate reason not to share.

I have found that at the heart of most firms’ reticence to share bad client references is the most telling and debilitating reason: a lack of firm-wide confidence. Firms that believe in their capabilities are not afraid to have authentic conversations about their performance. In addition, they see past performance as a way to improve and deepen client relationships, most importantly, to build trust. Confident firms have the processes in place to enable learning and the operational prowess to feed back that learning into the firm’s delivery. Unsure firms don’t learn and fix problems. Rather, they make excuses and blame others for their under-performance.

If you are afraid to let a prospect talk to any of your clients, then you need to address your more significant leadership and cultural problems.

When clients ask for references, give them willingly: the good, the bad and the ugly.

Be prudent.

 

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