Should you insist on vendor references if a prospect requests client references?

During Executive Coaching, an agency owner asked me about whether to require vendor references if a prospect wants client references:

“From time to time prospects will ask us for client references to speak to before they will agree to work together. I’ve always disliked it for some reason and I think I just realized why—because we have bad client experiences just as much as they have bad vendor experiences. So should we make the same request back to them to provide the same level of references that they request from us? I’m thinking that a prospect unwilling to do the very thing they’re asking from us might be a good sign that it’s one to steer clear of.”

My answer on whether to request vendor references from prospective clients? Maybe. It depends on the strength of your positioning and your sales pipeline, including how willing you are to lose a prospect. Consider three categories:

  • Strong (your agency’s positioning & sales pipeline are solid): Go for it, especially if you’re sensing a potential red flag. You have others behind them in line if the prospect balks at sharing vendor references.
  • Moderate (your agency’s positioning & sales pipeline are so-so): Handle on a case by case basis, especially if the prospect has shown other yellow or orange flags.
  • Weak (your agency’s positioning & sales pipeline are shaky): You’re likely to turn-off otherwise qualified prospects when you push back for vendor references. Fix your positioning and pipeline first.

Asking for vendor client references is worth a try, since it signals confident positioning—and that can help close the sale. But it’s also rare—so you’ll want to frame it properly, to avoid repelling prospects who are otherwise a good fit.

How to make that happen? Read on—including two free step-by-step templates: how to ask for vendor references and what questions to ask their vendor references.

Why do your prospects want client references in the first place?

It helps to understand your sales prospects’ underlying motivation in requesting client references. In my experience, prospective clients want client references from your agency for one or more of the following reasons:

  • Curiosity: They believe you can do the work, but they’re not sure what the client experience will be like.
  • Boilerplate: Their procurement department requires doing reference checks before signing a contract.
  • Confirmation: They’re pretty sure your agency is a match, but they want to be more sure.
  • Cowardice: They aren’t interested, and see this as an easy way to escape the conversation.
  • Distrust: They don’t trust what you’ve said, in your agency’s marketing and in sales meetings.

Asking you for client references is a reasonable request. But be strategic about how you handle the requests—you don’t want to torpedo the deal, waste your references’ time, or over-invest in a lukewarm prospect.

What are vendor references from sales prospects?

Vendor references (also known as “two-way client references,” “service provider references,” “partner references,” or “reciprocal references”) are when you won’t share client references unless the prospect also gives you references from one or more of their vendors.

Their vendor references might be their current agency (not likely to be happy to speak with you), their past agency (potentially happy to unload on the experience), or another professional services firm (their accountant, HR consultant, or another advisor).

Should you avoid using the word “vendor”? Not necessarily; agencies want to be seen as “partners” rather than vendors, but let’s not over-complicate it. Calling these “valued strategic partnership references” would sound ridiculous, right?

Why would you insist on vendor references?

If a prospect is pressing to know what your agency is like as a service provider, it’s reasonable to know what they’re like as a client. For instance, are they slow to sign off on deliverables? Do they disappear on you at key points? Are they always rescheduling meetings, or prone to executive Swoop & Poop?

You can get insights on this from vendor references. But be skeptical—a vendor may feel pressure to be overly positive, because they don’t want to lose their client’s business. A former vendor is likelier to give you a more honest answer, since they’re not relying on current revenue from your prospective client.

As with any reference check—for instance, if you were checking references about a prospective employee—pay attention to what they aren’t saying. Ask followup questions to dig deeper. This will help you understand if there’s more to the situation than what the vendor reference wants to say at first.

WWKD: What I do when someone requests client references from me

I’m glad to share client references for my services at Sakas & Company—but not until the last stage of the process. Typically this isn’t until after a prospective client has eliminated other advisors and they just want to be sure before they move forward.

  • I frame it as, “Once you’re at 90-95%, and you want to get to 99% sure.” People haven’t pressed to speak to references sooner—but if they did, I’d note my clients are busy running their agency, and I don’t want to take up their time until someone is serious.
  • I don’t share client references for info products or my one-off services, like my discounted Bite-Size Consulting Call. Why? Because if you’re spending less than $1,000 and can see hundreds of free articles (and my stellar Clarity.fm reviews), I question why you need more reassurance.

But keep in mind—I don’t currently require vendor references from prospective clients at Sakas & Company.

Why do I skip them? Vendor references haven’t seemed necessary; I’m pretty good at assessing whether there’s a match. And besides, no new clients this year have asked me for client references—because they were a referral, or they were already familiar with my work. I expect this will continue as people experience my public Agency Office Hours, since they’re hearing me advise agencies “live.”

But I realize your agency likely isn’t in this position with your prospective clients. What to do? I have two free templates for you!

[TEMPLATE #1] Script to ask prospects for vendor references

Ready to ask prospects for vendor references? You’ll need to customize this “script” to your agency’s unique circumstances—but here’s a template to get started! Let’s imagine they’ve reviewed your proposal and the prospect seems promising so far.

  • Prospect: “Based on your proposal, we’d like to speak with some client references.”
  • Agency: “We’re glad to share client references, at an appropriate point in the process. To confirm, how close are you to signing a client agreement?”
  • Prospect: “Well, we like your proposal; it’s currently between you and <OtherAgencyName>.”
  • Agency: “Got it; they do good work. Have you received their proposal yet?”
  • Prospect: “No, not yet.”
  • Agency: “Once you review their proposal, let me know if you’d like to speak further. We’d love to help you, but I want to be sure you pick the right agency for you.”
  • Prospect: “OK, but then we can get client references?”
  • Agency: “Yes. We’re picky about clients we serve, so we’d actually exchange references.”
  • Prospect: “What do you mean you ‘exchange’ references?”
  • Agency: “We’d provide 1-2 references of clients who can answer your questions about working with us, and you’d provide 1-2 vendor references who can answer our questions about working with you.”
  • Prospect: “Wait, you want references about us? We’ve never done that before.”
  • Agency: “I know vendor references are somewhat unique. But we limit our active client count—to ensure each client receives a boutique experience—so we need to be sure firms are a match for us, too.”
  • Prospect: “Huh. OK, that makes sense. Uh, who’d you want to talk to?”
  • Agency: “Ideally—once you narrow your options—we’d speak with your current agency and your prior agency.”
  • Prospect: “Um, things didn’t go too well with our last agency, and I’m not sure our current agency would be happy to speak with you.”
  • Agency: “That’s OK; we’re willing to reach out based on your intro.”
  • Prospect: “Could you talk to someone other than our agencies?”
  • Agency: “You’re saying you’re concerned what we’d hear if we spoke with your current and past agencies?”
  • Prospect: “Um… well, if they don’t want to talk to you, is there anyone else we could use?”
  • Agency: “Sure; for instance, your accounting firm, your printer, your HR advisor, or any management consultants you’ve worked with before. Since we prefer long-term client relationships, preferably someone you worked with for a while.”
  • Prospect: “OK, I think we can do that.”
  • Agency: “Great! Let us know once you’ve reviewed the other proposal, and we can regroup from there.”

Wondering what to ask their vendor reference(s), once it’s time for the reference-check call(s)? Read on for a list of starter questions!

[TEMPLATE #2] What to ask prospects’ vendor references

Here are some questions to consider asking the prospect’s other vendor(s):

  1. Could you summarize how you and <ClientName> work[ed] together, in terms of the length and nature of the work?
  2. On a scale of 0-10, how likely are you to work with <ClientName> in the future?
  3. Why did you pick that number? [pause to let them answer; bite your tongue]
  4. What do you like most about working with <ClientName>?
  5. What kinds of firms would be a bad match to help <ClientName>?
  6. How would you describe <ClientName>’s approach to being a client for your services?
  7. Is there anything to keep in mind as we decide whether to work with <ClientName>?

Remember to ask followup questions; they’re a great way to help you dig into whether the reference is telling the truth… or perhaps a half-truth because they don’t want the client’s revenue to stop coming in.

Next steps on vendor references at your agency

If you plan to require vendor references—by speaking with prospective clients’ other vendors—work out your process and talking points before you tell a prospect they need to give you references, too. Start by customizing my script above, and then iterating as you get initial feedback from using the script.

Consider adjusting based on the strength of your positioning and your sales pipeline. If your pipeline is weak, consider strengthening it before you push back to demand vendor references from sales prospects. Commit to investing in your own marketing. And be sure to create and follow a structured sales process in the first place.

Not feeling bold enough to request vendor references from sales prospects? That’s OK—there’s a simpler proxy.

  • My accountant asks prospects if she’ll have issues getting copies of their old documents from their prior firm. If the answer is “Yes,” it’s usually a sign they stopped paying the prior advisor… and she tends not to move forward with the prospect.
  • The agency version of that question? Ask if you’ll have any issues getting copies of their assets and account logins from their current (or prior) agency. If so, dig deeper into why.

Question: How do you handle requesting vendor references from prospective clients?

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