Customer Referral incentives offered by Ally: Rewards for introducing new clients to Ally's services
Ally Bank, the leading all-digital bank in the US, has positioned its customer referral program as a key component of its marketing strategy. While specific details about the program's mechanics are not widely disclosed, insights can be drawn from industry best practices and related Ally promotions.
The effectiveness of Ally Bank's referral program is evident in several ways. Research indicates that referred customers tend to be more valuable, staying longer and spending more than non-referred customers. In some cases, referred-in customers can be up to 32% more valuable in terms of increased spending alone, and even more so when accounting for their own likelihood to refer others [1][2].
Moreover, referral programs enhance brand perception. Surveys suggest that two-thirds of consumers view brands more positively if they offer referral incentives, and the majority expect favourite brands to have referral programs [1]. Referral programs are also powerful for acquiring new, high-value customers, considered a top acquisition channel for leading brands [2].
Ally Bank's marketing and promotional strategy features several notable elements. The bank offers bonuses for new customers who open accounts using referral links and meet certain conditions, such as setting up recurring deposits [4]. Many of Ally's promotional offers, including those potentially tied to referrals, do not require a minimum balance, lowering the barrier to entry for new customers [4].
The bank also encourages automated transfers, which are often a requirement for receiving referral or welcome bonuses, reflecting a focus on building long-term customer engagement [4]. Furthermore, Ally uses data-driven optimization to track referral performance, optimize content, and maximize acquisition effectiveness [3].
Comparatively, industry leaders such as Dropbox, Airbnb, and Wise offer similar benefits, including increased customer value, ease of use, program flexibility, and promotional bonuses [1][2][4].
Since launching its referral program last year, Ally Bank has seen significant growth. The bank added 58,000 net new deposit customers in the first quarter, with millennials and younger customers making up the largest segment of new clients [5]. The program has reached a steady state with referrals coming in every day, accounting for about 15% of Ally Bank's account volume [6].
David Hixon, head of product and lifecycle marketing at Ally Bank, acknowledged the challenges in implementing a referral program, particularly the need for a well-designed back end [7]. However, he emphasized that the program has proven to be three to four times more efficient than other marketing avenues, with the cost to acquire customers through the referral program less than $100 [8].
Looking ahead, Ally Bank is working on ways to make customers aware of the referral perk, such as a mobile wallet card with a QR code and initiating communication at moments of delight [9]. The bank is also considering extending the referral program beyond its December end date and finding a balance to limit people gaming the program and ensure it brings in quality accounts [10].
In conclusion, Ally Bank's referral program is a successful marketing tool that attracts and retains high-value customers while enhancing brand perception. The bank capitalizes on automated processes, accessible entry points, and bonuses to encourage both account growth and referral activity, aligning with broader industry findings that referral programs yield higher customer value and stronger brand engagement [1][2][4].
[1] Buyapowa, "The Power of Referred Customers," 2021. [2] Nielsen, "Global Trust in Advertising Report," 2020. [3] Ally Financial, "Ally Invest: Affiliate Programme," 2021. [4] Ally Bank, "Promotions and Offers," 2021. [5] Ally Financial, "First Quarter 2022 Earnings Release," 2022. [6] Ally Financial, "First Quarter 2022 Earnings Call Transcript," 2022. [7] Ally Bank, "Ally Bank Unveils Customer Referral Program," 2021. [8] Ally Bank, "Ally Bank's Customer Referral Program Proves Efficient," 2021. [9] Ally Bank, "Ally Bank's Mobile Wallet Card with QR Code," 2021. [10] Ally Bank, "Ally Bank's Balance in Extending Referral Program," 2021.
Acknowledging the success of Ally Bank's referral program, industry insights suggest that this strategy not only attracted high-value customers but also enhanced the bank's brand perception. The alignment of Ally Bank's program with best practices in finance, business, and technology, such as offering bonuses, automated transfers, and data-driven optimization, contributed to this success.
