Generating branch referrals: How one program is meeting the challenge


GreetingThere aren’t too many investment programs in the financial industry that can tell you they’ve had consistent growth in their branch referral program since 2007 with no signs of slowing down even during these tough times. Yet one program in Vermont at the New England Federal Credit Union is doing just that.

For starters, in order for branch referrals to be successful, you first need support from upper management. This is one point Susan Zahn, manager at New England Federal Credit Union who oversees the operations and integration of Baystate Financial Services, was clear in pointing out during our recent phone conversation. Referrals to this program are a part of the branch employee’s goals and the referral system that tracks investment referrals is the same as the credit unions. An incentive program is in place. Susan considers a referral to be when the program is mentioned by an employee to a member. Referrals are considered qualified when a member gives permission to have an advisor call or to schedule an appointment to meet. The employee only receives their incentive if the member shows up to their call or meeting.

While incentives are important, Susan went on to state, they’re not the main reason referrals are coming in. Employees refer because they understand the importance of the program’s goals for their members. Which leads us to the next important factor. Besides top management support, the next most important component is advisor credibility, or what we like to consider the “Chemistry Factor”. If the credibility of reps or the program itself is low at the branch level, then no amount of management support or incentives will help drive referrals. To help build credibility, Susan acknowledges every qualified referral to the program and informs the staff member which Baystate representative is assigned to the lead. She also copies their manager. Representatives also meet staff face to face at least once a quarter to help build relationships with branch staff and educate them on how their program can help members. Finally, representatives host an appreciation event for all staff once a year to recognize the top referrers.

To keep employees aware of how her program can help members on a regular basis, they send out tips of the week where employees can write back with questions. Susan says this has been a great technique for helping employees to become more knowledgeable about what they do. It also helps build her reps credibility as they take part in answering the many questions presented by employees.

To get a sense of how well the Baystate program is doing, Susan provided some figures. From 2007 to 2008, referrals went from being 39% qualified to 68% qualified. So far in 2009 they’ve jumped to 79%. As stated above, Susan considers a referral qualified when a member gives an employee permission to have an advisor call or setup a meeting to talk. The rise in qualifications is a clear sign that employees aren’t just mentioning the investment program because they have to, they’re doing it because they want to.

While Susan recognizes the investment and insurance program at NEFCU is healthier then most, she understands they could be doing a lot better. They’re in the process of working on a few marketing initiatives that include tools such as online retirement planners and educational content. “People are looking for guidance”, Susan says, “and are more likely to make a purchase when this guidance is provided from the beginning.” “The goal”, she states, “is to help demystify the world of investments and insurance.”

One last important ingredient is recognizing that the branches work around a culture of service, not sales. Susan believes strongly that if you try to change the stripes of the frontline staff you’ll wind up losing a battle that can cost you more than you bargained for. Once you figure this out, the rest will eventually fall in place.

Susan was one of several participants in our most recent survey on branch referral generation. Many of the insights provided in this article can be found in the results. Over 160 sales reps and program managers throughout the country took part.