Are you getting the most out of your credit union’s or bank’s referral program? Focusing on the right referral program tracking metrics can be the difference between a program that checks boxes and one that drives results.
While standard metrics like conversion rates and total referrals are important, financial institutions need to get more specific with their KPIs. KPIs that track customer longevity and lifetime value are the true measure of a successful referral program in this industry.
Keep reading to learn which data points your bank or credit union should monitor.
The Most Important Referral Program Tracking Metrics for Financial Institutions
Without further ado, here are seven referral program tracking metrics your bank or credit union should monitor:
- Account openings
- New deposit totals
- Customer acquisition cost
- Referrals per customers
- Age of referral
- Referrals per product
- Net promoter score
1. Account Openings
Financial institutions rely on long-term customer relationships, and one of the most effective ways to find customers who will stay with your bank for years to come is through referrals. According to credit union marketing strategy best practices, at least 10% of new accounts should come from customer-led growth. That’s why one of the most fundamental metrics for tracking referral program success is the number of new accounts opened.
For maximum insights, track the type of account referred customers open: checking, savings, credit card, etc. Through this data, you might discover that your referral program drives more checking account sign-ups but fewer credit card applications. When you understand these trends, you can adjust your credit union marketing strategies and incentives accordingly.
2. New Deposit Totals
Beyond simply counting account openings, it’s important to measure the value of referred customers by tracking their initial deposits to gauge your referral program’s success. Referred customers are more engaged and deposit higher amounts than non-referred customers.
Financial institutions should analyze how much referred customers deposit initially and how those balances grow over time. If your program attracts many new accounts with low deposits, you should refine your credit union marketing strategies to attract higher-value customers.
3. Customer Acquisition Cost (CAC)
Do you know how much it costs your financial institution to acquire each new referred customer? To measure CAC, add your total reward spend to your platform costs and divide by the number of new customers.
By tracking this metric, you can compare CAC per acquisition channel and allocate resources accordingly. For example, if your referral CAC is lower than your advertising CAC, you might reallocate some of your advertising budget into upgrading to a more powerful platform or offering higher referral rewards.
4. Referrals Per Customer
Some customers are more likely than others to refer multiple friends or family members to their financial institution. By tracking the average number of referrals per customer, your credit union can identify high-value referrers who you can nurture with additional incentives.
After segmenting these super-referrers, implement targeted engagement strategies like bonuses, exclusive rewards, or a VIP referral program to further drive advocacy. Referral software for banks and credit unions can simplify this process.
5. Age of Referral
Did you know that the average lifespan of a checking account is 17 years? This relationship can last even longer when customers join your financial institution at a young age. Younger customers tend to stay longer and engage with multiple banking products. Therefore, tracking the average age of referred customers can help your bank or credit union understand the lifetime value of its referrals.
Currently, only 26% of Gen Z and 14% of millennials are credit union members. However, younger customers who open their first checking or savings account through a referral may later apply for mortgages, car loans, and credit cards with your institution. Prioritizing younger referrals in your bank’s referral program can increase visibility among millennials and Gen Z and lead to higher customer lifetime value.
6. Referrals Per Product
Inevitably, not all refer-a-friend programs will perform equally across different financial products. Tracking referrals by product type (checking accounts, savings accounts, credit cards, and bundled offerings) can help refine incentive structures and marketing programs for banks.
For instance, if referrals drive more savings accounts but fewer credit card applications, you may need to adjust your referral reward structure or marketing messages to encourage a better product mix.
7. Net Promoter Score (NPS)
Net Promoter Score (NPS) is a key indicator of customer satisfaction and loyalty. Customers with a high NPS are more likely to refer their family and friends, which is why tracking the NPS of referred customers can help you understand the overall effectiveness of your bank’s referral program.
By integrating NPS tracking into referral program analytics, your financial institution can gain insights into how satisfied referred customers are and whether they are likely to become advocates themselves.
Wrapping Up: 7 Referral Program Tracking Metrics for Financial Institutions
Measuring the success of your bank or credit union’s referral program goes beyond simply counting the number of new customers. By tracking industry-specific metrics such as deposit totals, account longevity, and referrals per product, financial institutions can optimize their programs for sustainable, long-term growth.
Extole’s referral platform provides credit unions and banks the tools to track these critical metrics, refine marketing strategies, and drive customer-led growth. Schedule a demo to see how Extole can improve your bank’s referral program performance.
