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Archive for February, 2011

As we mentioned in yesterday’s long-overdue issue of the OMFG! e-mail newsletter about word of mouth marketing for banks and credit unions, we’d like to offer you a sweet little deal: a free copy of Andy Sernovitz’s leading (and aptly-titled) book on buzz, “Word of Mouth Marketing.” This book will give you a great overview of the concept of word of mouth marketing at your bank or credit union, and is loaded with examples from every corner of the business world.

Here’s all you have to do:

  1. Set an objective for your bank or credit union’s word of mouth marketing efforts this year.
  2. Contact us using the Request an Estimate form, and tell us about your goal. It takes about 12.3 seconds.
  3. We will schedule a time to discuss your word of mouth marketing goals and efforts at your bank or credit union, and then send you a copy of the book.

And in case you are not yet subscribed to the OMFG! email newsletter, subscribe now and you’ll get monthly doses of advice and tips on word of mouth marketing for your bank or credit union. For instance, yesterday’s issue featured the article, 3 Ways to Brainstorm Word of Mouth Marketing, which answers the big question: “we want to build WOM–but where do we start?!”

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Many banks and credit unions offer a fairly standard referral program–either on an ongoing basis, or as a special campaign. The offer is simple and predictable: if you refer a friend and he/she joins/becomes a customer, then you both receive a spiff ($25 each, etc.).

There’s a good chance this program is taking money out of your pocket unnecessarily.

Let me give you an example. I recently joined a new gym, which offered a referral reward. They asked, “who referred you to us?” The truth? Nobody. But I do have a buddy who already works out there. So I answered, “my friend Josh,” knowing that Josh would then get a month free at the gym, and I would score brownie points with him.

This is a problem…and the reason is simple: you’re paying people to do what they were going to do anyway. In my case, I was going to join that gym regardless. At your bank or credit union, if they truly found your offering compelling enough to refer a friend, they would do it anyway. If they don’t find it compelling enough, $25 isn’t going to change that.

It’s importance to understand the difference rewarding a behavior, and behavior modification. Simply put, with your referral program, you’re wanting the latter…but paying for the former.

Rewarding a behavior is retroactive–you give them a pat on the head for something they already did. Behavior modification is giving someone an incentive to do what they otherwise wouldn’t.

The problem is this: the “incentive” most banks and credit unions try to use is tangible or financial (cash or swag). Based on the principles of word of mouth marketing, though, the real incentive a person has for telling others is the feeling of importance, VIP-status or helpfulness that they get from making a referral (more on this in the free download, Bottling the Buzz: Harnessing Word of Mouth Marketing to Beat the Competition

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The Takeaway: If you want positive ROI on your referral program, you need your company to be extremely buzzworthy, which is what makes people WANT to tell others about you.

 

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