Ally Bank Expands Successful Referral Program with New Features

DETROIT, Mich. – Ally Bank is enhancing its customer referral program, which has become a key element of its marketing strategy, accounting for about 15% of the bank’s account volume. David Hixon, head of product and lifecycle marketing at Ally, stated that the program was launched last year and now includes a QR code feature to simplify the referral process for customers.

Hixon highlighted the challenges of creating an effective referral program. While marketing is fairly straightforward, the backend systems need to ensure that customers are properly compensated for their referrals. A small test of the program in early 2024, involving 250,000 customers, proved successful, leading to a full launch in August.

Under the referral program, existing customers earn $50 for each referred friend who opens a spending or savings account, with a limit of five referrals. The new customers can receive $100 after meeting specific criteria, such as establishing direct deposit.

To increase awareness of this promotional offer, Ally is now providing a mobile wallet card with a QR code, making it easier for customers to refer friends without searching through emails. Hixon’s team is also exploring automatic payment directly into savings accounts for referrals, enhancing the customer experience further.

Gen Z customers exhibit the highest referral rates, as they are keen to engage in influencer-like marketing. Hixon noted that employee customers and people who join through referrals contribute to a growing cycle of engagement.

The bank aims to ensure that referrals are for high-quality accounts while minimizing any gaming of the system to prevent fraud. Hixon mentioned that the program is currently three to four times more cost-effective than traditional marketing methods, with an acquisition cost of less than $100 per new account.

Even though the referral program is scheduled to end in December due to legal requirements, Hixon is optimistic about its future. He believes it will be extended into the next year, as it has proven beneficial for the bank.

Ally Bank, known as the largest all-digital bank in the U.S., is focusing on broadening its customer base. Currently, the bank serves about 3.3 million deposit customers and has $146 billion in retail deposits, adding 58,000 new customers in the last quarter alone.