Start an Investment Referral Program: Tools and Top Tips

Where to invest money? Who to entrust it to as I seek to grow my wealth? People trust the recommendations of friends and family the most when making significant financial decisions like these. 

So, it’s wise for your investment service or investing tool to grow its customer base using your existing network of loyal customers. 

The perfect way to mobilize recommendations – and track them – is with an investment referral program. Here’s how it works, how to know if you’re ready for one, and our best practices for starting one. 

What is an investment referral program?

An investment referral program, motivates your customers to suggest your investment service or platform to their friends, family, and colleagues.

When a customer refers your service or platform to someone they know, and that person decides to open a new account, you show appreciation to the referring customer by offering them a referral incentive for helping to bring in new business.

Additionally, many financial investment referral programs also provide a reward to the new customer when they open an account, creating an extra incentive for both parties involved.

The best investment referral programs are automated with software, so it’s easy to track who was responsible for each referral (more on this below).

Benefits of investment referral programs

When it comes to managing their finances and making investing decisions, individuals want to feel confident that they’ve made the right choice, often dedicating considerable time to explore their options. A referral marketing program can be advantageous not only for you and your business, but also for potential clients seeking that perfect match.

Here are some key advantages of implementing a customer referral program:

• Track every referral your customers make: Easily monitor how your program is performing and make informed decisions based on the data.
• Increase awareness of your financial services: Word-of-mouth referrals are incredibly effective, helping you reach ideal clients who might not have found your services otherwise.
• Attract new clients: Recommendations from friends carry more influence than other marketing strategies. In fact, client referrals are four times more likely to generate new business.
• Build loyalty: Referral marketing tends to attract the best clients, who are often more loyal. They are more inclined to continue using your services, leading to a higher customer lifetime value. Referred clients typically have a 16% higher lifetime value than those who come through other channels.
• Save on marketing costs: Referral programs generally have a lower client acquisition cost compared to traditional marketing methods like advertising. You only compensate for referrals that lead to sales, making it a budget-friendly approach.
• Market with minimal risk: Referral programs are low-risk since you only reward clients when their referrals convert into your clients.

Referral programs can work well for any investment-related service, including:

• Brokerages/stock services
• Cryptocurrency sites, like Bitcoin sites
• Investment portfolio services
• Wealth management apps
• Investment advisory services
• Apps that let someone manage a bank account, credit card, or debit card (see our article on bank referral programs for more tips, if you fall into this category)

Referral software for investing platforms [Free Tools]

These referral tools for investing platforms are a free and easy way to help you start your referral program.

Want a fully automated referral program for your investment business? Run your referral program with us at Referral Rock. Find out how we can build your program with you (and tailor it to your unique needs)

Are you ready for a referral program?

Not every investment platform is prepared to implement a referral program, even though there are many advantages. 

For a referral program to thrive, it’s essential to have certain key elements established before you get started. 

To start, it’s essential to have a strong customer base that has a high level of trust in your wealth management services. Your clients will form the foundation of your referral network, and having a substantial group is crucial for your referral program’s success.

You should also gather insights about your target audience, which consists of your current customers who will be making referrals.

Consider their demographics.

• Which platforms do they typically use to find information about your services? (such as specific websites, social media, television, radio, or print media)
• What channels do they prefer for communicating with friends? (like email, social media, or text messaging)
• What drives them to sign up? (for example, convenience, lower costs, or a commitment to community responsibility)
• What types of rewards would motivate them to invite friends?

Understanding your existing customers will also give you valuable insights into the leads you want to attract. Many of them may share similar characteristics, so developing buyer personas could be beneficial. You can even share the info about types of leads you want to attract with potential referrers.

Additionally, it’s vital to deliver exceptional customer service. A remarkable customer experience is the primary reason clients will feel compelled to recommend your services. You might consider surveying your customers about their experiences to gauge their willingness to refer you to others.

Expert tips for starting an investment referral program

Ready to get started? Here’s our roadmap for investing referral success:

Streamline the referral process

To encourage sharing, ensure your program is simple to join and promote. Make it easy for your customers to discover your referral program and share you with their friends. The sharing process should require minimal clicks or taps to access rewards.

Referral Rock’s One Click Access links streamline the sharing experience, allowing customers to start promoting you immediately. No need to sign up for the referral program—they’re already part of it. Remember to include these links in all communications about your referral program, such as transactional and account update emails.

Keep the program’s terms straightforward. Highlight the benefits of sharing—both rewards and intrinsic advantages—on your program’s landing page.

Simplify the instructions into 3-4 easy steps, and provide a clear call to action to encourage customers to proceed.

Additionally, allow customers to share through various channels. This flexibility enables them to promote you using their preferred communication methods. For example, don’t restrict sharing to just referral emails; offer options for social media, text messages, and other platforms. 

Even better? Give them a QR code to save on their phones, too. This way, they can pull it up when talking with friends, and it’ll function as a referral link when their friends take a picture.

A great way to enhance sharing is by providing a referral link that customers can easily copy and paste anywhere. We also suggest preparing pre-written messages for customers to send to their friends, ensuring they sound friendly and personal.

For even greater ease of access, incorporate the referral program into your portal. And if you have a mobile app, consider integrating the referral program into your app for convenient sharing on the go.

Carefully choose your rewards

Make sure to offer generous rewards for your referral program.

When determining your referral offers, it’s essential to strike a balance between being appealing and financially feasible. If the rewards are too low, customers may not feel encouraged to participate. However, it’s equally important to ensure that the rewards align with your budget.

The most effective investment referral programs provide double-sided rewards, for both the referrer and the new customer. This means giving something to the person who refers a friend as a thank-you for bringing in new business, and also rewarding the referred friend after their first investment.

Additionally, make the reward-earning process straightforward. If customers face too many obstacles to claim their rewards, they may lose interest.

Usually, investment referral rewards include a bonus deposit for the referrer’s existing investment account – whether that’s a cash bonus, free stocks, or free cryptocurrency – and an initial deposit for the new customer’s account. 

Or, referrers might receive an APY increase (a temporary increase in their ROI).This approach reinforces the connection to building wealth, and your commitment to helping with this.

Some platforms opt to provide gift cards instead, allowing recipients the freedom to spend their rewards as they wish. This is particularly effective for business investment account referrals, where the referrer may not be the account owner.  Plus, with Referral Rock and Tango’s gift card menu, customers can select their preferred type of gift card for even more freedom of choice.

Decide how you’ll structure your rewards

It’s a great idea to reward the referrer right away when someone they refer opens a new account, and to ensure that this reward is given for every successful referral made by a customer.

However, if you want to encourage specific actions from new customers, you might consider offering an additional reward to the referrer once the new customer completes a direct deposit above a certain threshold, meets specific balance criteria, or maintains good standing for a set number of days.

This approach, where you provide rewards at various stages (when an account is opened and when value is generated), is known as a multi-step referral program.

That said, a multi-step program isn’t your only option; there are other motivating structures that might suit you better. For instance, you could implement tiered rewards that increase in value after a member refers a certain number of customers who successfully open accounts.

Alternatively, you might offer different levels of referral rewards based on the type of investment account opened – say, higher-level rewards when someone opens a business account.

If you’re a stock investment brand like Robinhood, you might try a structure where the free stocks are given out at random – or take a play from their most recent playbook and let them pick their stock from a list.

And if you’re a cryptocurrency platform, you might pay referrers a percentage commission on their friends’ trading fees. 

Referral Rock is versatile enough to accommodate any reward structure you choose, whether it’s tiered rewards, multi-step rewards, or varying rewards based on account types.

Promote, promote, promote

Even if you develop a program that adheres to all the best practices, it won’t be effective if no one is aware of it.

Having more program members increases your chances of generating successful referrals and boosting revenue. Therefore, it’s essential to promote your program and its rewards across all customer interaction points.

The most effective promotional channels are those that customers frequently encounter. Here are some suggestions for promoting your program:

• Design a website banner or hero image that is easily visible on your homepage, linking directly to your referral landing page.
• Explore subtle ways to feature your program on your website, such as adding a link in the footer or menu. If customers can see and access it, they are more likely to participate.
• Incorporate links to your referral program within your online portal for easy access by regular users.
• Share posts about your referral program on your social media accounts.
• Extend personal invitations to customers to join your referral program during their happiest moments, like after a significant deposit, following a positive review, or on their account anniversary.
• Send out mass emails to all customers about your program. We suggest sending dedicated emails monthly to quarterly to engage newer customers and keep the program fresh in everyone’s mind.
• Include promotions for your referral program in transactional emails, balance updates, newsletters, and other routine communications, with a brief call to action for referrals.
• Leverage your regular customer surveys to lead into your referral program. If someone provides positive feedback, guide them to your program.
• Utilize Referral Rock’s Monthly Summary emails to keep members engaged by sharing a personalized overview of their activity each month.

Pro tip: Continually promote your program so your customers will instinctively use it when they want to tell their friends about your investment services.

Brands with the most successful referral programs know a program doesn’t run itself. They’re promoting their programs consistently, on multiple channels. Referral program promotion is a long-term investment.

Select the right referral software

With the right referral software, your platform can say goodbye to the tedious task of managing referrals manually.

Referral software tools enable you to monitor how many referrals your customers are generating, identify the sources of those referrals, and swiftly distribute rewards. You’ll also gain valuable insights into your referral program, allowing you to assess its effectiveness and make necessary adjustments.

Additionally, referral software creates unique referral links that customers can easily share through social media and email.

Referral Rock software simplifies the design, tracking, rewarding, and promotion of your program, making it an essential resource for any investment platform aiming to implement a successful referral initiative.

With Referral Rock, you can:

• Customize rewards to your liking: Choose any type of reward and structure you prefer, including tiered and multi-step options.
• Effortlessly track referrals: Each customer receives a unique referral link, enabling you to pinpoint the origin of every referral. Customers can also monitor their own referrals through personalized dashboards.
• Automate reward distribution: Deliver incentives as soon as they are earned to keep your customers satisfied. You can also automate multi-step payouts by linking with your CRM.
• Streamline promotions: Automated promotional emails keep customers engaged, and passwordless links make sharing a breeze.
• Integrate with essential tools: Easily connect Referral Rock with over 50 different tools, including your CRM.
• Gather program insights: Quickly assess your program’s performance and make data-driven improvements.
• Set up in no time: Referral Rock allows you to launch your program in just days, with expert assistance available at every stage.

Make your program ongoing

You may have noticed that some investment platforms offer referral bonuses for a limited time, or perhaps you’ve even tried this approach yourself. It’s important to avoid this common pitfall.

When people see that referring friends to your platform can benefit those friends, they are more likely to do so. Word of mouth is a natural process, and you want to take full advantage of it.

However, if you only reward referrals for a short period and then stop the rewards, the effort and resources spent on creating a referral program may not be justified.

In contrast, having a continuous refer-a-friend program allows you to encourage multiple referrals from the same customer over an extended time, fostering genuine advocates. Additionally, you’ll gather valuable long-term data on word-of-mouth referrals.

That doesn’t mean you have to forgo “flash” rewards, though. While your program should be ongoing, you can still introduce special referral bonuses for limited-time offers or customize promotions for different seasons and holidays. Acorns provides a great example of the flash offer, which applies on top of their standard referral reward.

Set up an investment referral program

Creating a successful investment referral program requires careful attention to your customers’ needs, the overall design of the program, the structure of rewards, promotional strategies, and how you track referrals. These elements are essential for crafting an outstanding referral program.

If you’re looking to streamline the process and avoid starting from the ground up, Referral Rock can significantly speed things up and enhance the word-of-mouth marketing you’re already experiencing.