Score Major Points With Member Referrals

Whether they offer formal incentives or an environment for people to interact, cooperatives are relying on members to help build a buzz around their brand.


One week before the September kickoff of the college football season, Coach Nick Saban’s University of Alabama Crimson Tide ranked No. 1 in the USA TODAY sports coaches poll. This poll is significant because its results are not based on talking heads, university marketing teams, or biased bloggers. Instead, it relies on a panel of 59 Division I head coaches weighing in on what teams they think are top dog. These are the individuals with real skin in the game.

For credit unions, getting a member referral is a lot like getting a top spot in the USA TODAY poll. It’s a nod of support from the member-owners who know cooperatives best and an indication the institution is meeting members’ needs. This section of CUSP takes a look at the different ways a credit union can secure referrals and the value they bring in terms of new members, new business, and enhanced credibility in the community.

For example, Pennsylvania’s Freedom Credit Union is an advocate of paid referrals campaigns. The $623 million credit union has achieved significant success by rewarding members who refer their friends. Conversely, Alliance Credit Union ($364.1M, San Jose, CA) has tried incentivized member referral campaigns for loan products and prefers to focus its resources on other types of campaigns. Other credit unions are employing referral strategies outside of traditional campaigns. From going on-site at SEGs to creating community events and online groups, these institutions are finding new ways to encourage member-to-member and member-to-community interaction.

However a credit union goes about obtaining them, referrals are a badge of success and a metric that reflects high esteem from the people that matter most. Affinity Plus Federal Credit Union ($1.66B, St. Paul, MN) even uses new member referrals as a baseline to judge overall institutional success. For each of the past five years, approximately 80% of its new members have joined the credit union because of a referral. Such consistent success has prompted it to try to push that percentage even higher in 2013.

Many credit union executives say referrals cost less than pricey marketing campaigns and are more effective as well. Better yet, some referred members are more engaged with the credit union, which helps drive up metrics like average member relationship. According to Callahan & Associates’ Peer-to-Peer analytics, credit union membership has grown 7.70% since 2008. In the same five-year span, average member relationship has grown 15.70%. These are significant wins for the industry. Now, credit unions need a solid game plan to build on the good word members are spreading.