Leveraging brand advocates: Smart marketing for banks and credit unions
Who are the most effective sales people for your bank or credit union?
The obvious answer is the front-line staff. No one can represent your organization’s value proposition as well as your managers and customer service employees.
But there is another group that you may be overlooking: your customers. They have the potential to be your strongest brand ambassadors. And if they have been loyal users of your services, they bring a passion and perspective to the discussion that can be extremely powerful with their peers. So why not put them to work, so to speak?
A few years ago, we collaborated with our client, the University of Iowa Community Credit Union (UICCU) on a Refer A Friend program to recruit new members and grow market share. Simply, here’s how it works:
UICCU members are encouraged to refer one of their friends, family members or acquaintances to the credit union. For every referral that results in someone joining the credit union by establishing an active checking account, a $50 reward is deposited into the accounts of BOTH the referring member and the new member. There are, of course, certain qualifiers to protect against someone scamming the system.
Now, you may be thinking this is just a way of “buying market share”. Or that if people are such loyal brand advocates, why is a reward necessary? Legitimate questions. But the reward is really just fair compensation to your member/customer for taking the time and effort to encourage their friends to participate. And building market share is always a legitimate and appropriate investment. Since protections against abuse are built into the process, the critical marker of success is customer retention. That’s where the onus falls on your organization to deliver an overwhelmingly positive experience that will enhance the likelihood of your new customers staying on and becoming brand advocates in their own right.
The program has been very successful. Although confidentiality prevents me from stating specific results, I can say that UICCU has been running the program for several years and continues to see very positive activity in the program. And since it was introduced at UICCU, about a dozen other credit unions have elected to participate in the promotion. Most report excellent results, usually in direct proportion to the degree they engage in active and significant support of the promotion.
The Refer A Friend project, however, is not really the point of this article. It is simply a real-life example of leveraging the brand loyalty of your customers to help increase market share and revenues. Some brand advocacy programs involve cash rewards. Many offer special discounting. And some are completely organic (think of the thousands of people who wait in line outside the stores whenever Apple introduces a new product).
Why is brand advocacy important? Consider these statistics aggregated by barnraisers.com from various research organizations:
- Brand advocates are five times more valuable than average customers.
- They spend three times more with the brand over the lifetime of their relationship.
- 92 percent of consumers trust brand advocates.
The latter statistic comes from a wonderful infographic published by marketing guru, Jay Baer.
Let’s face it. Financial services is becoming ever more competitive. The more you can leverage a competitive advantage, the more you can increase market share and grow the business. Marketing through brand advocacy is just such a tool.
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