The Network Referencing Effect
In economics and business, a network effect (also called network externality or demand-side economies of scale) is the effect that one user of goods or a service has on the value of that product to other people. When network effect is present, the value of a product or service is dependent on the number of others using it.
The classic example is the telephone. The more people own telephones, the more valuable the telephone is to each owner. This creates a positive externality because a user may purchase a telephone without intending to create value for other users, but does so in any case.
The expression “network effect” is applied most commonly to positive network externalities as in the case of the telephone. Negative network externalities can also occur, where more users make a product less valuable, but are more commonly referred to as “congestion” (as in traffic congestion or network congestion).
Over time, positive network effects can create a bandwagon effect as the network becomes more valuable and more people join, in a positive feedback loop.
This can be applied directly to Landlord Referencing Services, for instance;
On Fri just gone we had 123 members join and these will register approx 6 tenants each (as per our terms and conditions), so by the end of the next week the network of landlords that joined on just this last Friday alone will have grown to offer their fellow landlords and agents the opportunity of checking on 738 more tenants.
It is simple maths that the more that join and network, the bigger the network and the safer we can all become.
With a database of over 200,000+ low score tenants it is 200,000 reasons for people to become a member and tell others to become members too.
Lets face it, we all want to stop bad tenants and 200,000 less bad tenants you may not need to take by joining a free service is a pretty good deal.