Customer reference call protocol: scripted or open?
TJ Moruzzi
Published At Mon Oct 05 2026
Customer reference calls are one of the highest-leverage diligence steps in M&A. A strong call validates the seller's customer relationships and growth thesis. A weak call breaks deals. Most LMM sellers underprep customers and the calls go poorly.
The right protocol is hybrid: customers are prepped on the format and likely topics, the banker is on the line as a quiet observer, questions are semi-structured rather than fully scripted. Customers stay genuine; bankers stay protective; buyers get the validation they need.
This post covers the hybrid approach, banker's role on the line, customer selection logic, common buyer questions, and what to do when a key customer can't or won't take a reference call.
The hybrid approach
Three approaches and why hybrid wins:
Fully scripted. The customer reads a prepared statement. Buyers see through this immediately. They know the customer is rehearsed and discount the call entirely.
Fully open. The customer takes the call cold. The customer answers honestly but may not frame answers well. The seller gets surprised by what the customer emphasizes (or doesn't).
Hybrid (recommended). The customer is briefed on the call format, the buyer's likely topics, and the seller's growth narrative. The customer answers in their own words. The banker is on the line, listens, and may interject only when necessary.
The hybrid approach gives the customer enough framing to answer well without making them sound coached.
Pre-call prep with the customer
Before the call, the banker briefs the customer:
- Why we're doing this. "We're running a sale process for the company. Buyers do reference calls during diligence."
- What the buyer will ask. Common topics: relationship history, satisfaction, future plans, contract dynamics.
- What we'd appreciate emphasis on. "When asked about the team, we'd appreciate you highlighting [specific strengths]."
- What's off-topic. "If asked about specific pricing or commercial terms, you can decline to share specifics."
- The format and length. "30 minutes max. Banker on the line as host. We'll send the buyer's name and background ahead of time."
The brief is direct but not coercive. Customers should feel informed, not scripted.
Banker on the line: when, why
The banker should be on every reference call. Two reasons:
- Protection. The banker can intervene if the buyer asks something inappropriate or off-topic.
- Observation. The banker hears the call and can debrief the seller honestly. If a customer's tone shifts on a particular topic, the banker catches it.
The banker's role is to host, not to participate. Open the call ("Thanks for joining; this is X from LockRoom Capital, hosting the conversation; the buyer is Y from Z Capital"), turn it over to the buyer, and stay quiet unless intervention is needed.
Bankers who try to drive the call disrupt buyer-customer rapport. The buyer wants to hear from the customer directly.
Customer selection logic
Customer selection drives outcomes. The seller's banker chooses which customers to make available. Selection criteria:
- Loyalty signal. Long-tenured customers with strong relationships beat shorter-tenured customers.
- Articulate communicator. The customer should be able to explain their relationship and use case clearly.
- Strategic fit. A customer in the buyer's target sector or geography is more credible than a random customer.
- Willingness. Customers who agree readily are usually fine. Customers who hesitate may be lukewarm.
Avoid:
- The single largest customer (a bad call here breaks the deal)
- New customers (they don't have enough history to validate)
- Customers in active commercial dispute (even minor)
- Customers known for candor that may include criticism (unless the seller wants honesty over polish)
A working selection: customers ranked 3-7 by revenue, with strong tenure, in sectors the buyer cares about. Have 5-7 customers ready; the buyer typically calls 3-5.
Common buyer questions in reference calls
Standard reference call questions:
Relationship questions:
- How long have you been a customer?
- How did you start working with the company?
- Who are your primary contacts?
Satisfaction questions:
- What does the company do well?
- Where could they improve?
- Have you had any service issues, and how were they handled?
Future plans:
- Do you anticipate expanding your relationship?
- Are there any RFPs or competitive evaluations planned?
- What would cause you to consider switching providers?
Contract dynamics:
- What's your renewal cadence?
- Have prices increased over time?
- How does the company compare to competitors?
Operational signals:
- What does account management look like?
- How responsive is support?
- Have they delivered on commitments?
The customer answers naturally. The buyer is listening for tone as much as content.
What to do if a customer can't take the call
Three scenarios:
Scenario 1: Customer is unavailable due to scheduling. Reschedule. The buyer waits.
Scenario 2: Customer is willing but uncomfortable. Substitute. The banker selects a different customer with similar characteristics (revenue rank, sector, tenure). The buyer doesn't need to know which specific customer.
Scenario 3: Customer declines. This is a yellow flag. The seller should understand why. Common reasons: customer is in a competitive evaluation and doesn't want to confirm vendor relationships, customer policy doesn't permit reference calls, customer is changing buying decisions.
If the largest customer declines, the seller has to decide whether to:
- Disclose to the buyer that the customer declined
- Substitute a different customer without disclosing
- Provide an alternate customer with disclosure
The right answer depends on the relationship's importance. Disclosure is usually better. Discovered non-disclosure during diligence is worse than disclosed customer reluctance.
What buyers do with reference calls
Buyers debrief after the call and look for:
- Consistency with the CIM and management presentation
- Tone of the customer's relationship description
- Specific mentions of strengths and weaknesses
- Future intentions (renewal, expansion, switching)
- Red flags in the customer's body language or pauses
Buyers often run multiple reference calls and triangulate. Three customers saying the same thing about service quality is more compelling than one customer's enthusiasm.
Multiple calls per buyer
Active buyers run 3-5 customer reference calls. The seller should have:
- 5-7 prepped customers ready
- Mix of segments (large, mid, small)
- Mix of tenures (long, medium, short)
- Mix of geographies (if relevant)
This gives the buyer authentic variety without exposing the seller to bad calls.
Common reference call mistakes
Mistake 1: Underprepping the customer. The customer is surprised by the call topics and gives weak answers.
Mistake 2: Overscripting. The customer sounds rehearsed. The buyer discounts.
Mistake 3: Banker drives the call. Buyer-customer rapport never develops. Customer feels constrained.
Mistake 4: Picking the largest customer first. A bad call here is fatal. Reserve large customers for later in the process or skip.
Mistake 5: Only happy customers. Buyers expect some balanced perspective. A customer who says "service is great, but their billing system is annoying" reads as honest. A customer who says only positive things reads as scripted.
Mistake 6: Not debriefing the customer. After the call, thank the customer and ask how it went. Customers who feel valued stay loyal.
When in the process
Reference calls happen post-LOI, typically:
- During the diligence period (week 4-8 after LOI)
- Often in the final stretch before signing definitives
Some buyers ask for reference calls before LOI. Most sellers decline this; reference calls are a privileged step in diligence, not a screening tool.
Bottom line
Hybrid protocol wins. Customers prepped, banker on the line, semi-structured questions. Customer selection drives outcomes; pick from rank 3-7, with strong tenure, in sectors the buyer cares about. 5-7 customers ready, buyer calls 3-5.
Banker's role is host, not participant. Customer's role is to be authentic with light framing. Buyer's role is to evaluate via tone and content.
Reference calls done well validate the seller's narrative. Done poorly, they break deals.
FAQ
When in the process do reference calls happen? Post-LOI, during the diligence period (weeks 4-8). Some buyers ask earlier; most sellers decline pre-LOI reference calls.
Should the banker be on the line? Yes. As host and observer, not as a participant. Open the call, stay quiet, intervene only if necessary.
How many customers should I prep? 5-7 ready; buyer typically calls 3-5. Mix of revenue rank, tenure, and geography.
Should the customer use a script? No. Brief them on format and likely topics. Let them answer in their own words. Scripted calls fail.
What if the customer can't or won't take the call? Substitute another customer. Disclose if the declining customer is the top customer; otherwise, substitution is fine. Discovered non-disclosure is worse than disclosed reluctance.
What does a bad reference call look like? Customer is lukewarm, evasive, or critical of service. Tone is flat. Buyer discounts the entire customer base.
How long is a typical reference call? 30 minutes max. Buyers go shorter when the call is going well; longer when probing.
Should I provide reference calls for the largest customer? Generally no. A bad call with the largest customer breaks deals. Reserve the largest customer for very late in the process or substitute with the second largest.
