Increasingly competitive markets demand effective ways of generating positive
buzz around your credit union. Word of mouth is a powerful tool that is gaining
popularity among credit unions.
Word of mouth, viral marketing, or member referral campaigns are all variations
of the same concept: Transforming customers into brand advocates. While all
of these tactics rely upon the public to spread the word, here are three things
your credit union can do to help encourage and promote member referrals.
1. Offer Rewards
Money talks, but is it too much to compensate your new members with $100 for
joining your financial institution? First U.S. Community Credit Union
($162m in Sacramento, CA) does not think so. Last month First U.S. Community
joined the ranks of national institutions offering financial incentives for
new member. ING Direct USA and Bank of America are two prominent institutions
already using this tactic to generate referrals.
2. Initiate Positive Services
Proactively addressing members' changing needs can also spawn positive word
of mouth. Last week Pennsylvania State Employees Credit Union (PSECU,
$2.2b in Harrisburg, PA) impressed members and competitors when it reissued
7,300 credit cards after a nationwide security breach. Rather than waiting to
assess the damage control as other financial institutions did, they quickly
issued new cards to the most vulnerable members to assuage their fears and curtail
3. Give Thanks
A simple way to sustain word-of-mouth momentum is with a structured effort to
thank members and employees for referrals. New England Federal Credit Union
($480m in Williston, VT) surprised members by sending them a thank you note
for referring new members. They also use their members in print ads and will
have one of the photos enlarged and framed as a thank you gift. Similarly, Services
Center Federal Credit Union ($22m in Yankton, SD) initiated a campaign to
thank members when a new member mentions being referred by a current member.