Business network for customer retention
Businesses and professionals can collaborate to keep the customers within the network and provide comprehensive services.
Keeping customers within the network, where appropriate for the customer, allows for more proactive service coordination and better monitoring of service quality, both of which can help reduce unnecessary and costly service. However, keeping customer within the network is easier said than done.
Most businesses lose a fair amount of customers due to a number of factors including customer choice. Referral management is one factor businesses and professionals can control, and it’s one of the best methods to spur customer retention.
By following these five steps to manage referrals, businesses and professionals can effectively and significantly increase customer retention:
1. Define the network
In a fee-for-service world, businesses and professionals simply wanted to credential as many referral partners as possible. If you walked into the average business and asked for a printout of its network, you would likely walk out empty-handed. In a value-based purchasing environment, businesses must actively define and manage a distinct network. Initializing such a network is a foundational step and a significant achievement, but the work doesn’t end there. Network management is an ongoing discipline.
2. Evaluate why customers are leaving the network: Load the data associated with the newly defined network into a workflow or analytics tool. These tools enable administrators to pinpoint where business is going outside the network and evaluate why. They can then categorize the reasons and prioritize which categories to address. Is the reason the customer is going out of network acceptable? Does it represent negotiated referrals? This initial evaluation sets the baseline from which to measure future performance. In this step, it is important to extend the focus beyond the traditional PCP-to-specialist referral patterns. For example, many customers leave the network while transitioning from acute to post-acute business.
3. Communicate with referral partners : The responsibility for referring customers rests on the shoulders of referral partners. businesses need to have a process in place for educating referral partners on keeping customers in-network. This education is particularly important as businesses acquire referral partners with established referral patterns. At the most basic level, referral partners need to know which of their referral partners are in-network and which aren’t. Having quality performance data on hand is key to motivating referral partners to change their referral behavior. referral partners in value-based contracts who understand joint accountability for outcomes will want to see that an in-network referral partner delivers high-quality business.
4. Analyze why you’re losing customers in real-time: After establishing a baseline for customers leaving the network and addressing the issue with referral partners, organizations need to monitor data in real-time to see if in-network referral rates improve. Historically, the examination of the reasons customers go out of network has been a retrospective, periodic analysis using claims data. But as with any effort that relies on data to drive behavior change, a snapshot every few months isn’t sufficient. Some types of leakage are so expensive that a daily or weekly snapshot is required to enable earlier intervention. Ideally, organizations need a workflow tool that can guide referral partners in real-time to desired referral behavior.
5. Optimize the network: Of course, the ultimate purpose of the network is to ensure the best business and financial outcomes for customers and businesses. When the network is first established, a hospital’s goal might be to ensure that a targeted percentage of cardiology referrals go to its in-network cardiologists. However, as the sophistication of the organization’s network management grows, it will want to optimize its referral patterns even further. For example, data might reveal that one cardiologist delivers the best outcomes for heart failure, another for angioplasty and another for cardiac rhythm disorders.
No business organization can make a customer stay within its business network, nor would that necessarily be in the best interest of the customer in every instance. But through sophisticated referrals management, business systems can systematically — and successfully — guide customers to the highest-quality, lowest-cost business options.
