How to Start a Credit Union Referral Program [+ Examples]

Creating a credit union referral program is an invaluable step toward acquiring high-value members with minimal effort. The strategy turns your army of satisfied and loyal members into reliable brand advocates, powering your brand awareness and client acquisition engine. It’s part of human nature to talk about positive experiences. So, if you can use that to your advantage, you’ll tap into a powerful marketing tool that will yield impressive results. 

Today, we’ll look at the top benefits of starting a credit union referral program and best practices that will land you high-value members. Get ready to harness the power of word-of-mouth marketing. 

What is a credit union referral program?

A credit union referral program is a system that motivates your members to recommend your financial services to their friends, colleagues, and family members. The aim is to attract new leads that are a good fit for your business. Usually, the program rewards a member when a friend they refer opens a new checking account, savings account, debit card, or credit card with the credit union. It also rewards the newly referred account holder once they open their account, encouraging them to maintain the new account. 

A dedicated referral program is automated with software, making it seamless to track the referrals and their exact source. The software also helps credit unions measure the performance of their marketing strategy and identify areas of improvement.

Why should you start a credit union referral program?

Referral marketing presents a cost-effective way for businesses in all industries to grow their customer base. 78% of marketers agree that referrals generate high-quality leads, and 60% say referrals generate more leads at faster rates. Instead of pumping money into paid advertisements, you can motivate your happy customers to spread the word about your credit union to their friends and family. 

Here are more compelling reasons to start a referral program for your credit union:

• Increases brand awareness around the credit union: Implementing a referral program is an excellent way to boost brand awareness. It has the power to reach out to a broader target audience without much cost to you. Increased awareness means a higher market share and a greater competitive edge.
• Effective for member acquisition: Studies show that 92% of people trust word-of-mouth recommendations more than ads, meaning more clients are likely to open an account when a friend refers them. All you have to do is excel in your services.
• Brings in loyal members: Your existing members provide a unique advantage since they’re well-versed with your credit union and know who among their circle would be willing to become potential members. That (along with the trust factor) means they’ll bring suitable matches for the credit union, who will likely remain loyal to your services and keep their accounts open and active.
• Has a relatively low member acquisition cost vs. other credit union marketing methods: Referral marketing reduces your member acquisition costs exponentially since it relies on word of mouth and existing customers. Unlike other costly marketing methods like paid ads that don’t always promise a ROI, this system costs you nothing but a fixed incentive per referral. That means you can successfully grow your client base, even on a tight budget, by implementing the right referral marketing tactics.
• Enables credit unions to harness word-of-mouth in a trackable way: With the help of referral software, you can create a unique link for each of your existing members and easily track every referral they make. That way, you will reward them on time, which builds trust and encourages them to bring more referrals. The software also makes it easy to measure the performance of your marketing efforts and make changes as needed to increase effectiveness. 

Referral software for credit unions [Free Tools]

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

Want a fully automated referral program for your credit union 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)

Essentials for a successful credit union referral program 

Even though credit union referral programs offer a wealth of benefits, not every credit union is ready to start one. In order for a credit union referral program to be successful, a credit union must have the following elements in place before launching a program.

• A healthy network of satisfied members, who would willingly recommend your credit union to their friends
• A track record of stellar service to members: The reason your members will want to recommend you
• Capacity to handle an influx of new memberships and deliver the same service you’re known for
• Knowledge of your existing members, who will be doing the referring:
  • Demographics
  • What made them open an account
  • Why they chose the credit union over competitors
  • Where they get information about the credit union
  • How they communicate with their friends
  • What rewards would motivate them to refer friends
• A profile of the ideal new member (the ideal referred friend): What type of new members do you want to attract?

Credit union referral program best practices

Creating an effective credit union referral program becomes easier when laying the foundations correctly. Follow these best practices to help you build an irresistible program that will land you high-value members.

1. Offer meaningful rewards for referrals

Many clients will likely ask what’s in for them before recommending your services to their loved ones. People feel motivated when their efforts are appreciated. So, offering your members rewards they love is a perfect way to encourage them to send more referrals.

Your referral rewards should be worth the effort and time that your existing members spend recommending your credit union to friends and family. Deposits to the account are the best referral bonus, as they tie back to your credit union. But other rewards, like gift cards, custom tangible rewards, gift baskets, or even event tickets, could work for the referring members as well.

It’s also crucial to welcome new members with incentives of their own, as a way of encouraging them to use your services and remain loyal. Cash in the new member’s account is the best way to encourage these new members to open their account. 

CFCU places their referral reward front and center. They offer a cash reward for referrals to directly tie things back to the credit union.

When setting your reward amounts, ensure you stick to a budget that you can pay out consistently but high enough to motivate referrals. Still, it’s best to make the reward available for all successful referrals (with no rewards cap for existing members).

Make the reward eligibility terms clear as well: what must be done for both parties to earn a reward? 

• Must the new member simply open a new account and make any deposit?
• Must the new member make direct deposits totaling a certain amount, within a given number of days of account opening? 
• Must the new member use their account for a certain number of transactions in a given timeframe? 
• Must the new member maintain a mimimum balance for a certain amount of time?
• Are there other criteria that the new member must meet to be considered a member in good standing?

Be sure to reward both parties immediately after they complete the conditions you set, to build trust and encourage more action. 

2. Make sharing easy

Your member referral program should be straightforward, to accommodate all types of members. You’d be surprised how many programs fail to work because clients don’t know how to use them. To avoid this, concisely explain the program in a few simple steps and make your program page uncluttered, so members know how to refer. Include a clear call to action to help them take the next step.

Members should be able to find and share the program with just a few clicks or taps. Additionally, you need to create a unique referral link for each member to instantly copy and paste anywhere. 

Offer several sharing options based on the channels that most of your clients use to interact with their peers, including emails, social media, and texting. 

First Financial offers multiple sharing options in their referral program, explains how it works in a few simple steps, and includes a clear call to action.

3. Track your referrals with software

Credit unions need to set and track progress towards measurable member acquisition goals to see if the referral program is returning the desired results. It’s nearly impossible for a credit union to do this on its own. Investing in referral software is vital because it streamlines your program creation process and makes tracking and managing referrals easier. 

The software allows you to create a customized referral experience for your credit union, with personalized messages that sound like they are from the referrer. You get to properly identify where your referral traffic is coming from, thanks to unique referral links for each member. 

With this tool, you can win the trust of your members and new account holders by instantly issuing rewards for all successful, qualifying referrals. The fact that it can collect all program data makes it seamless to measure success and refine your program.

4. Promote your program

Promoting the program continuously is key so all members know about the rewards for sharing. Here are the different ways to ensure its success. 

• Post about the program on your credit union social media accounts (have branches promote it on a more localized level if those branches have social accounts of their own
• Promote the program on your credit union website’s homepage, including through an attractive banner (like Cutting Edge does)

• Include a referral program section in your online banking portal, so members can find it when they login
• Place “refer a friend” options in website headers and footer
• Display banners and signage in credit union branches
• Send mass program promotional emails
• Send personal invitations to top credit union members (any members who have had their account open and active for a given period)
• Promote the program in newsletters
• Mention the program in transactional emails
• Direct members to the program after they have given high ratings on a member satisfaction survey

5. Play up the community and connection elements

Credit unions generally share profits with members and are more able to build personal connections with them. Most of their members are local or regional, so it’s a good call to use referral program messaging that emphasizes friendship and community. 

Show how sharing helps friends find a caring and personal financial home. Also, emphasize how sharing enables friends to become part of a community that knows their region and is invested in their financial well-being.

Signature Federal Credit Union emphasizes the web of connections existing members have, and how they can share the credit union’s benefits with this community.

6. Keep your program going

Referral programs take time and money to set up and promote, so deactivating shortly after setup isn’t the best time and money investment. Some credit unions only run limited-time referral programs, but members will be more inclined to refer more friends if they know there’s always a reward on offer. Besides, word of mouth happens naturally, but it’s hard to track without a referral program. 

Running an ongoing referral program offers the following benefits:

• Ensures more word-of-mouth sharing is trackable
• Encourages repeat referrals from individual members
• Makes the investment in the setup worth it

UNIFY wants its members to “go to town on this here form” and keep referring friends. They keep their referral program running for the most impact.

The best credit union referral programs

Looking for more inspiration as you start your credit union referral program? Check out these examples of the best credit union referral programs below.

A+ Federal Credit Union

Started for educators and focused on giving back to the community, A+ Federal Credit Union now offers checking, saving, investment and loan options for members from all walks of life. Their referral program is also strategically designed to appeal to the many types of people who might open accounts.

What we love about their referral program:

• Strong community focus: “Share the love” language and images of members having fun with friends and family
• Multiple types of referral rewards for different types of members, including one for youth and one for businesses
• Reviews and testimonials show why members love the credit union, as inspiration for referring
• Double-sided rewards mean both the referrer and friend earn cash when the friend joins the credit union
• Engaging video about the referral program
• Members can access their referral code from their accounts

What could be improved:

• All the links on the page are a bit confusing. How to access the referral program page?

OnPoint Community Credit Union

OnPoint Community Credit Union serves the state of Oregon with personal and business accounts and loans. Their referral program is straightforward and easy to understand.

What we love about their referral program:

• OnPoint leads with a meaningful headline and then explains the reward right away
• Double-sided rewards mean both the referrer and friend earn cash when the friend joins the credit union
• Easy to understand how the program works, including the terms
• Short referral form removes friction

What could be improved:

• OnPoint doesn’t need a paper referral form along with their digital one; offering the paper option means some referrals won’t be tracked automatically

Eagle Community Credit Union

Eagle Community Credit Union serves the Orange County, California community with six branches and 11 ATMs. The credit union offers personal loans, business loans, home loans, and auto loans, as well as checking accounts, savings accounts, and IRAs. We appreciate how their referral program blends a standard structure with an exciting contest structure.

What we love about their referral program:

•  Members earn set rewards with each successful referral, but also get entered into a monthly drawing for a larger gift card
• Eye-catching image advertises the reward and explains the program in a few simple steps
• Double-sided rewards mean both the referrer and friend earn cash when the friend joins the credit union
• Members can use the QR code to access the program
• Members can submit multiple referrals at once
• There’s no limit to the number of referrals someone can submit

What could be improved:

• The page text could be less cluttered, as the image already explains the program well. An FAQ would be a great way to cover more info without cluttering the main page.
• Although the expiry date creates a sense of urgency, it’s unclear if the program will continue past the date mentioned

NIH Federal Credit Union

NIH Federal Credit Union offers $50 Visa gift cards when members get their friends to open a new checking account. Referred friends must also meet certain deposit requirements within 90 days, meaning NIH only pays when they truly see results from their referral program. 

What we love about their referral program:

• NIH explains the program in three easy steps
• Double-sided rewards mean both the referrer and friend earn cash when the friend joins the credit union
• Expandable FAQ answers questions in a less cluttered way
• Eye-catching referral image in the top menu directs members to share, and makes the program easy to find from other pages

What could be improved:

• Even with the three-step explanation, there are ways to cut down some of the text on the page
• The referral form is a little long; it probably isn’t necessary to ask for the friend’s home address and phone number

Wrapping up

Referral marketing is a powerful channel that can bring high-value members to your credit union and help you build a solid client base. Setting up a successful referral program requires you to embrace the right strategies and tactics.

 By following the referral program best practices outlined above, you’ll make it easy for your members to make referrals and set up your program for success. Of course, using referral software will streamline your program creation process while making it easy to track and manage your referrals.