The “Help Me Help You” Guide to Creative Credit Union Referrals

“Help me help you!”

If you’ve seen the ‘90s hit movie Jerry Maguire, this phrase may ring a bell. When Jerry’s client Rod refuses to do more PR work, Jerry responds by yelling and kicking the wall. “Help me!” he pleads. “Help me … help you. Help me help you.”

While your credit union members are unlikely to make such a passionate plea, it’s reasonable to assume that you have a core group of loyal and enthusiastic members who are more than willing to sing your praises. And while some may not need any extra nudging to gush about you, the easier you make it for your members to refer you to others, the more likely they are to do it.

But to make it easy, you need a plan. It’s estimated that only about 30 percent of banks and credit unions in the United States offer referral programs, despite the fact that referrals tend to be more profitable and retain a higher lifetime value than other types of leads. Your most loyal members provide a unique advantage, as they know both your credit union and the people in their circles who would most appreciate your products and services.

Not only that, referrals tend to be substantially less expensive to acquire. With more traditional marketing methods, new acquisitions can cost up to $400 apiece, 50% more than the average cost-per-acquisition of a referral.

If you don’t yet have a referral plan, it’s high time to get started. If you do, there’s always room to build on it to make it even better.

Ingredients of an effective referral plan

1. Simplicity: If a referral plan is convoluted or has too many steps, even your most enthusiastic members are likely to lose steam. Don’t make your super-promoters jump through too many hoops to tell their family and friends how great your credit union is! Reliant Credit Union offers an easy 3-step process and includes a prominent link to its referral page in the main navigation.
   If you offer a referral form on your website, make sure that you’re not asking for information up front that you don’t really need. We also recommend user testing the form to ensure that it offers the best possible user experience and doesn’t risk losing members along the way. Just remember the tried-and-true rule of seamless UX: Don’t make me think!
2. Meaningful and memorable incentives: Of course, we all want our members to promote our credit union out of sheer enthusiasm — and some of them probably do. But also, let’s be honest — credit union products and services may be less likely to come up in casual conversation than a coworker’s awesome pair of shoes or a friend’s memorable hotel experience. Many credit unions with established referral programs make direct deposits for both the referral and the referring member when a friend or family member joins the credit union. This is a great start, but perhaps there are other meaningful product- or community-specific incentives to consider. Keep reading for some great examples.
3. Well-timed, personalized reminders: Is your referral program languishing on a not-so-prominent corner of your website? An effective referral program requires recurring (but not annoying) and well-timed reminders, particularly after members achieve new financial milestones. For instance, if a happy member was approved for an auto loan and has just purchased a new car, it would be a great time to see if any friends or family members might also be considering an auto loan. Work with loan officers to ensure that they reinforce the messaging around your referral program so you’re not just relying on marketing emails to spread the word.

Why most referral programs aren’t as effective as they could be

It’s easy for credit unions to give their members money — after all, they can deposit it directly into their accounts. But is that enough to inspire your members to continue making referrals? On the one hand, everyone loves free money. On the other hand, a deposit is not particularly tangible and may simply end up getting buried in a member’s account statement.

Most referral plans, in their current iterations, are purely transactional, missing out on vital opportunities for relationship building. In a recent episode of The Remarkable Credit Union podcast, George Hofheimer, former Filene EVP and author of Banking on a Human Scale, points out that small but meaningful gestures have the potential to stick in people’s minds and can “really go a long way” toward building more human relationships.

A tangible gift worth $25 may actually be more enticing and more memorable than a $75 deposit in their checking account. Plus, there are other potential opportunities:

• Partnerships with other local businesses: If you offer business services, even better if you partner with business members!
• More attention on social media: A delighted member might post a picture of something as simple as a handwritten card. They are unlikely to post a picture of a line item in their latest eStatement.
• Good will: Did you make a member smile? Did you offer them access to a noteworthy experience or introduce them to a great local business? Good will has a tendency to pay itself forward.

5 creative ways to build on your referral plan

Here are a few concrete ideas for building on your referral plan to make it more memorable and less transactional:

1. Send welcome packages

After a new member opens an account, send something meaningful as a way to welcome and thank them for their business. Consider a gift card to a local coffee shop or restaurant that they can enjoy in the company of friends. In the welcome letter, let the new member know that if any of their friends or family members opens an account, they will also receive a special thank you gift.

2. Offer incentives tied to financial milestones

What relevant incentives can you offer to members who have just purchased a car or home? Perhaps a referring member who just started paying an auto loan can get a free oil change if they successfully refer a friend for an auto loan. Or what about a housewarming gift for a referring member with a new mortgage? A refer-a-friend sweepstakes could tantalize members with a hefty Grand Prize, like interior decorating services or a sizable gift card to a local furniture store.

3. Connect with parents and their children

As the fast food industry has unfortunately proven all too well, marketing to children can yield remarkably effective results. Fortunately for credit unions, the services and products you offer will not contribute to childhood obesity and can actually help children master lifelong financial skills.

Members with children are a natural pipeline for family referrals and can help you tap into up-and-coming generations. But do you know who these members are and how to reach them? Can you run allowance workshops for parents or sponsor a local Lemonade Day? What meaningful incentives can you offer to parents to open youth accounts for their children — perhaps a gift card to a local arts and crafts store or children’s museum?

4. Incentivize members to bring friends to workshops and other events

Do you already hold in-person mortgage or budgeting workshops for your members? Give them a little something extra if they bring a friend. A free coffee or sandwich at a nearby cafe could help you build rapport with nearby businesses and give the member something else to do with friends before or after the event.

5. Get people talking

Your referral program is just one component of a broader word-of-mouth marketing strategy. While it can be difficult to measure ROI on word-of-mouth marketing strategies, it remains one of the most effective ways to reach potential members. So how can you jumpstart conversation?

Here’s where you’ll want to start thinking pretty far out of the box. Take a cue from First Commerce Credit Union, which has joined forces with the South Georgia Medical Center (SGMC) Foundation for the #PinkPower #FlamingoChallenge. A news story covering the initiative explains:

First Commerce has challenged businesses, organizations, and individuals in Georgia communities … by delivering flocks of plastic flamingos and encouraging them to raise funds or donate to directly support breast cancer patients at SGMC’s Pearlman Cancer Center.

Once you accept the challenge and receive the flamingos along with the yard sign or poster about the initiative, post your photo with the flock and make a fundraising or donation pledge on social media – no amount is too small and 100% of these tax-deductible gifts directly support patients fighting breast cancer. Then, contact the organization or individual you want to challenge next and ask them to do the same. Once they accept, move the flock in front of their business, organization, school, or home and ask them to move the flock forward again within 24-48 hours.

I bet a lot more people talk about the mysterious migrating flocks of pink flamingos than they do about First Commerce checking accounts. But the buzz no doubt generates a few more account openings, along with a healthy dose of good will.

If you don’t yet have a referral program, it’s best to start simple and build from there. If you do have a program in place, chances are, there are opportunities to make it even better. Maybe your referral program can’t help Jerry help Rod. But it can help your members help you, and in the process, develop meaningful, human, reciprocal relationships that are more likely to stand the test of time.

This article originally appeared in CUInsight.