How Patelco turned friends into members

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To operate in the highly competitive San Francisco Bay Area, Patelco Credit Union needed to generate not only new members but also active ones.

The Pleasanton, Calif.-based institution developed a “refer-a-friend” program as a way to thank its members for their loyalty while increasing its membership. The goal was to create a truly holistic, multi-channel program that would make joining Patelco as convenient as possible, whether in-branch, online or over the phone.

The program yielded thousands of new members who are more engaged with the credit union than others. Because of that, the credit union is being honored with a Best Practices Award this year for member acquisition.

Patelco has served Sacramento for a number of years on a more limited basis but in late 2017, it expanded its field of membership to include essentially the entire metro area. The credit union initially launched the refer-a-friend program there to help boost membership in the area.
The $6.4 billion-asset credit union assembled teams across IT, marketing, retail, operations, finance, internal communications and legal to implement the pilot. The institution offered both the referring member and the prospective member $50 each upon a qualified enrollment, requiring new membership with a checking account and minimum deposit of $100. Members could earn up to $500 total for a maximum 10 referrals over the course of the campaign.

Beginning June 20, the institution first targeted its most loyal members within the Sacramento metro area. That included members with at least four products and services with the credit union, and then those Patelco calls “promoters,” said Rina Johnson, Patelco’s vice president of marketing and project leader on refer-a-friend. The promoters were identified through an internal survey as being likely to recommend Patelco to family and friends.

These members were sent personal referral codes, either through email or direct mail. The personal referral code could be passed to friends and family through various channels, including text, email and social media.

Using the code, the prospective member could open a checking account online, in branch or over the phone. Upon qualification, both the referring member and the new member would automatically receive their bonus usually within 24 hours.

Patelco’s IT team developed automated tools to deliver an easy-to-execute and scalable program. This included the ability for branch employees to verify codes, automatically tracking each time a particular code was used and an automatic thank you and confirmation message after a successful referral.

In the first week, the pre-selected members helped bring in 43 new members. By week five, new member acquisitions jumped to 211 per week for a total of 685. Due to this initial success, the program was rolled out to the majority of members region-wide.

“At Patelco, we are very inclusive and did not want to create a situation where only a few members could benefit from this exciting promotion,” Johnson said. “In addition, once we realized the platform we developed functioned as we intended, we felt very comfortable expanding to most of our network.”

After the program’s completion, the results surpassed expectations for new members added and overall engagement, Johnson said. Patelco gained 3,139 new memberships with 2,851 qualified referrals from June 20 to Sept. 30.

The new members who joined through this campaign have better participation in the credit union compared with other new members. Members from the refer-a-friend program average 4.34 products and services while other new members use 3.9 products.

Refer-a-friend members also have a higher percentage of core usage – which Patelco defines as those members who use three or more Patelco products and services – at 87 percent. In comparison, 56 percent of other new members use at least three Patelco products.

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Referral marketing Referrals California Best Practices Awards
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