Referrals Programs Can Drive Stunning Profits for Banks: Here Are Top 5 Examples
When one of your existing customers is motivated to recommend your bank’s product or service to their family or friends. Isn’t it a win-win situation?! Your bank gets a free marketing service, your customer gets an incentive for referring to your bank and gets social validation among his circle and his friends get a recommendation from a credible source!
But want to know the hard truth?
This doesn’t happen often! People are so busy with their daily routines that they forget to tell their friends about your and your banking services often! Part of adulting, right? But, in consideration of the company's growth, it means you could be losing a potential customer! What if this is the case every time? You could potentially lose a lot of customers that you could have got with the least marketing efforts!
So concentrating only on offering regular banking services isn't just enough! Banks with successful customer acquisition strategies experience higher profit margins and greater long-term financial stability. Referral Marketing is one such strategy that involves the least marketing efforts but when done right could give you a lot of customers! It involves a bit of understanding of customer psychology but is more powerful than any other marketing!
Referral marketing, when combined with the incentives for the referrer and referee, deliberately influences your customers to take action to tell their circle about you! Incentives add an extra layer of motivation, making the referrer more likely to advocate for the bank, while the referee, enticed by the promised rewards, is more likely to take action. For 1 happy customer, you could potentially get 9 referrals! The referral incentives can take various forms, such as cash rewards, interest rate bonuses, waived fees, vouchers, lucky draw chances, or exclusive account benefits for both the referrer and referee.
But, why do banks need a referral program?
The recent developments in online banking have given easy access to customers to choose among various financial institutions offering services catering to their various needs. Despite this accessibility, many people tend to stick with their current banks for the long haul. In fact, according to research, the average lifespan of a checking account remains remarkably high at around 17 years, including Gen Z. This loyalty is a strong factor for banks to entice new customers with a rock-solid referral program! Also, according to a study by Harvard Business Review, customers obtained through referrals are both more loyal and more valuable than other customers.
So, it’s high time that both traditional and neo-banks effectively use referral marketing as their bank’s marketing strategy to establish continued growth and success in this competitive market. Let’s take a look at some of the top examples of bank referral programs below.
Examples of Top Bank Referral Programs
1. Provident Bank
Do you know what made Provident Bank’s referral program a success? The way they put that CTA button in the center! "Refer-a-friend! And get $25 or $50." We also appreciate how they give different rewards for personal and business accounts ($25 for a personal account and $50 for a business account). So simple, yet caught all the attention of the customers by making the rewards crystal clear! Also, the program has just 3 simple steps that make it so easy for any customer to understand its process. Plus, the customers earn rewards to their own account immediately after a friend opens a new account. Sounds enticing right? That's how Provident Bank’s emphasis on referrals to build relationships with the bank and the focus on sharing to help a friend are all noteworthy aspects that other banks should consider incorporating into their referral programs.
2. Axos Bank
Axos Bank’s referral program is simple with its three-step process on the page that exactly tells customers how to refer friends and earn rewards. When a referred friend signs up Essential Checking or Rewards Checking account, both the existing checking customer and the referred friend receive $50 deposited into their accounts. Plus, there is no limit to how many referees a customer can refer! Customers can keep referring and earning rewards!
3. Chase Bank
Who doesn’t love to win cash rewards? Understanding this, Chase Bank hooks the customers by highlighting their cash rewards at the top centre of the page! When a customer refers a friend they can get a cash bonus of up to $500 in a year, paid out as $50 per successful referral. They also have given a dedicated set of FAQs at the end of the page that clears everything about the referral program.
4. YES Bank
YES bank offers a unique reward program where the customers can earn 1000 YES Rewardz on every successful referral. When customers link accounts of their family members to YES Family accounts, they can earn 1500 bonus YES Rewardz. The customers can redeem these YES Rewardz on a wide range of merchandise, air tickets, movie tickets, mobile/DTH recharge, & more
5. HSBC Bank
The bright colors and the happy faces on the HSBC Bank referral program page create a positive vibe about sharing the excitement with referring friends! HSBC offers an unavoidable referral program where customers can refer friends or family to HSBC Premier and earn up to $6,000 - the highest reward offering on our list!! Upon successful referral, customers can earn $300 per for every qualifying referral, potentially earning up to $6,000 in a calendar year. Plus, when their referred friend opens an HSBC Premier account they earn a one-time bonus of up to $1,000. They have made the program irresistible by offering unique perks like global transfers, no foreign transaction fees, etc.
Value of Bank Refer-a-Friend Programs
To effectively acquire new customers
Acquiring new customers isn’t a strategic choice for banks but is essential for revenue growth. Referral programs when combined with tangible rewards for loyal customers encourage them to actively participate in expanding the bank’s customer base, while simultaneously providing attractive perks to new customers, thereby creating a win-win scenario for all parties involved.
To reduce acquisition costs
As banks widen their customer base, they reach a wider set of customers including a pool of depositors, borrowers, and investors. In customer acquisition, incentivized referrals are inherently cost-effective compared to traditional bank marketing strategies. Unlike expensive advertising campaigns or extensive outreach efforts, referral programs use the existing customer base, effectively transforming loyal clients into brand advocates.
To boost brand awareness
Referred customers are 4 times more likely to refer your brand to others. When individuals receive recommendations from their trusted social circles, it triggers a sense of reliability and assurance, making them more inclined to explore the recommended bank’s offerings.
To increase customer loyalty
When customers actively participate in referring friends and family, they become more invested in the bank’s success and reputation. This increased sense of involvement tends to translate into greater loyalty, as these referrers are more likely to stay engaged and satisfied with the bank’s services.
Protips for a Successful Bank Referral Program
Make sharing easy:
Did you notice a pattern in the above bank referral programs? The entire referral process is in just easy 3 to 4 steps with a CTA. That’s a tip you can use to streamline your own bank referral program page and show customers how simple it is to share!
Create an ongoing bank referral program
Word-of-mouth happens organically and the customer should be able to capture the benefits whenever possible. So, an ongoing referral program gives an opportunity for the same customer to refer multiple referrals over longer periods and build true brand advocates.
Offer enticing, meaningful rewards
The rewards need to be tangible, enticing, and sustainable. Setting too low of a reward may not encourage the customers to take action immediately. Give rewards to both the referrer and the referred friend. Plus, simplifying the process of earning rewards will also motivate the customers.
Have a reward structure
You can try multi-step referral programs. It's a cool way banks reward referrals for certain actions their referred friend takes afterward, like making a deposit or using their debit card. Or entice customers with a bonus-on-bonus! Reward more as they keep bringing in more referrals. Or, you can spice things up by offering different rewards based on the type of account their friend signs up for. So many possibilities, right?
Automate the process with the right referral software:
Say goodbye to the headache of manual referral management with referral program software! With the right referral software, your bank can effortlessly track referrals, know which customers they're coming from, and swiftly dish out rewards. It’s like an all-in-one solution. Plus, you'll get a treasure trove of data that can used to fine-tune your program whenever necessary.
Flyy – your go-to for bank referral programs simplifies referral program design, tracking, rewarding, and promotion, making it a key for any bank that wants to run a successful referral program. Flyy offers,
Quick Set-up
Fully Customizable Rewards
Referral Tracker
Automated Reward Payouts
Effortless Integration with your CRM
Program Data Collection
It's like having a referral genie in a digital bottle! So why wait? Fly high with Flyy today! Book a demo.
