Does Friendship Pay??

How much will an organization pay for a new client?

Consumers are seeing fantastic new programs to influence their behaviors and sustain their loyalty. Many of these new programs feature cash. 

Recently, Alberta Treasury Branches (ATB), introduced a new program to attract Alberta clients. It pays $350 to open a new account, $150 to refer a friend who opens a new account (they get $350 as well) and $50 to sign up for their ATB Gold MasterCard. While this may seem aggressive in a downer provincial economy, it is well constructed. Albertans are looking at dollars and financial services even closer in an environment of lower oil prices and daily layoffs.

Changing the consumer mind is easier when you get above the clutter.

Will a client walk across the road to a new bank for $350? Why not? In the face of the Royal Bank of Canada offer earlier, ($50 to visit with a recent statement) the ATB offer is seven times more rewarding. The ATB campaign also takes advantage of the consumer network to spread the 'fire' with a referral program - "do the deal and tell your friends" - everyone wins.

How much are you paying for new clients? Take your marketing expenses and divide them by the number of new clients in a period to find out. Don't be surprised if the advertising budget has risen and the number of new clients has fallen. Just when many thought the internet could reduce acquisition costs, client acquisition investments have escalated.

By the way, paying for customers is not a new idea. Peter Thiel in his book "Zero to One" tells how they grew PayPal to the first million subscribers by paying $10 for each referred friend. That story is more than a decade old.

Friendship does pay at ATB!