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Referral Roulette: Your Bank Can’t Afford to Play!

Referral Roulette

banking roulette wheel

Your Bank Can’t Afford to Play!

Every bank gambles. The bank bets that the customer will repay their loans on time, they bet that their investments will create a respectable return, they bet that their customers will instinctively send solid referrals to them.  2 out of 3 ain’t bad.

Referrals are extremely profitable for any business for a variety of reasons.

  •  They have a zero acquisition cost
  •  They require less selling on your part because their friend has already “sold” them on you
  •  They are 17 times more likely to refer their friends to you than someone who just walks in off the street.

Account managers, loan officers, and mortgage departments who perform in the top 8% among their peer institutions do not gamble on referrals; rather they weave the expectation of referrals into every meeting with their prospects and customers. In their eyes, it is just part of their culture. They also understand that if they don’t ask for introductions, their bank will actually lose business!  (read my previous post, 3 Reasons Why Your Bank is Losing Customers)

How do you start a culture of asking for referral business in your bank or credit union?  3 simple strategies that my most successful bank and credit union clients use include:

1. Be Intentional

Culture is caught, not taught. If you are the president of the bank and run into a customer of the bank while you are dining with a few staff members, thank that person for doing business with you, and plant the seed for them to introduce you to a new prospect. If you don’t bump into a customer of your bank, talk to your server about banking with you. Your staff will notice, and they will practice what they see.

2. It’s an “Introduction”, not a “Referral”

I’ve enjoyed working with you on this piece of business. Could you introduce me to 2 people who you would want to know if you were in my shoes?” is an awesome phrase to integrate into your every day conversation.

Many people’s version of asking for referrals sounds something like, “If you know anyone…hand ’em my card.” All while shaking their head from side to side. This one principle that I have been touting to audiences for years has helped countless bank and credit union professionals grow their business.

3. Realize that you are paid twice from each sale

Your close a particular transaction and there is some sort of commission or fee generated. The real money is realized when your customers begin marketing for you. I coach several high performing financial advisors, and they all say some variation of, “I get paid two ways…my management/transaction fees, and when my clients introduce me to two people per quarter. Whether or not they invest with me, I really enjoy meeting new people!” Notice how they planted seeds of expectation for referrals within the customer’s minds.

What are some of your most effective referral marketing strategies? Please share this post with your friends!

This entry was posted on Thursday, April 4th, 2013 at 6:12 am and is filed under banking convention topics, Banking Customer Growth, Building Business Relationships, Building customer base, cross selling and referrals, Leadership Lessons, Marketing and Promotion, mortgage best practices, referral programs for banks, Sales Tips . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.


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