Why a Referral Network increases Customer Loyalty
When a significant life event occurs, consumers make substantial changes to their routine and as a result, have large batches of needs. This is one of the key lessons found in the 1980’s team of researchers led by U.C.L.A. professor Alan Andreasen. At Harvey Pence, we think of these events as belonging three categories; Personal Events, Personal Transactions and Business Transactions. These may include a new relationship, buying a home or selling a small business.
During these significant events, businesses who are part of a network are best placed to help consumers with a group of needs. Referral networks use the power of many different skillsets to help their customers with many of their needs. A business gives help (read our previous article) to their customers, solving their needs through referring customers to someone they trust who can help. By taking care of all of your customers needs, you win customer loyalty and help them purchase sooner as their needs preventing them from purchasing your product or services are resolved.
Scenarios where Referral Networks build customer loyalty.
Businesses build loyalty through helping their customers more. By shifting from a transactional relationship to one where a business helps a customer more through utilising the power of a network, loyalty is one as more customers have more needs met. Let’s explain with examples of:
- Half help, a business solves only the need they are contacted to help with.
- Full help, a business uncovers and tries to solve their customers other needs.
Customer scenarios, where we describe the way to create customer loyalty:
- Alex moves city, wants to buy a house and speaks with Ken Starr, a real estate agent:
- Half Helping. Ken is happy to show him around houses and suggests getting financing in order.
- Full Help. Ken introduces Alex to several properties and refers him to a local mortgage broker to get finance and a solicitor who reviews the terms of the sale. With these referrals, he is able to buy sooner.
- Joy wants to open a café and speak with Susie Sharp, her accountant:
- Half Helping. Susie suggests starting with writing a business plan and finding a Commercial Real Estate Agent to find a space.
- Full Help. Susie informs Joy that are many people who can help bring this to life, get inspiration and avoid any pitfalls. Susie refers Joy to an Architect to think about some designs, a business loan broker and a great builder to build the space.
People might think this is typical sales training, it’s not. Help your customers with their batches of needs by becoming part of a referral network. If you’re looking to understand the Basics of Referral Networking or Create your First Referral Network check out these articles.
Harvey Pence helps businesses to grow faster with a referral network. The Harvey Pence Referral Platform and our Comprehensive Guide are the best resources to help you create, improve and grow your referral network.