Step1.cs

public class Step1
{
    public void Process(PipelineArgs args)
    {
        var processorItem = args.ProcessorItem;

        var customField = processorItem.InnerItem["Custom Referenced Item"];

        var referencedItem = processorItem.InnerItem.Database.GetItem(new ID(customField));

        var name = referencedItem.Name;

        args.CustomData.Add(name, name);
    }
}