A reference material, in mixing especially, is a benchmark to compare mixes & masters deemed ‘perfect’, to a mix/master in progress. It’s useful for deducing exactly what aspects of a mix/master need to be focused on. Usually they consist of a well-balanced mix between all of the instruments and stems in the specific reference track.
It can help our mixes by providing a reliable and consistent standard to use as reference for a good mix/master. Using a reference material is optimal for when you start mixing or mastering on a new setup or sound system, as you may not be to differentiate between different mixes as they may possibly be too loud, quiet, muddy, etc. without potentially using a reference material.
An engineer’s reference material may differ depending on personal preference, or more usually, the exact type of genre they’re trying to mix on. For example, a trap producer may prefer to use tracks that are bass-heavy with punchy kicks and crunchy snares. For my production I usually use the track Go Oli Go! by Oli XL, as the minimalism of the track helps me to not feel so overwhelmed. This track also has compressed percussion with equal gain levels to most of the other instruments in the song, which is useful because I can individually benchmark each stem to see how they should sound on a signal flow.