One of the main challenges that most business owners and fitness professionals face is attracting new members. It’s not enough to just open a gym; you need to be bringing in the right kind of clients. There are 39,570 health club facilities in the U.S so you can bet that the competition is intense.
When it comes to getting feet in the door, a referral program could be just what your business needs. According to Nielsen, 92% of people trust referrals from people they know. As well as that 74% of people regarding word of mouth as a key influence on their purchasing decision.
It’s natural for friends to talk about an amazing experience they’ve had and share it with their friends. The power of referral can’t be ignored by a fitness business. In this article, we are going to discuss how you can create an effective referral strategy for your fitness business and the steps you need to take for success.
The Basics of a Referral Program
A referral program is a systematic way of getting clients to make referrals to your business. Individuals regularly talk about products and services that they love and enjoy. In the United States, there are approximately 2.4 billion brand conservations every day according to the Word of Mouth Marketing Association. With people four times as likely to buy when referred by a friend, encouraging referrals to your business is an essential move.
How Does a Referral Program Work?
Listed as a proven marketing strategy in our Fitness Marketing Guide, it is a word of mouth marketing tool. The idea is that you incentivize members to refer friends, getting you new members. When offering a refer-a-friend program, the offer needs to benefit both the new and existing customer. The marketing strategy leverages your existing customer base and turns them into brand promoters.
Here are some of the best examples of referral programs for inspiration:
- Dropbox – this is one of the most famous referral marketing examples resulting in exponential growth on the platform of an increase of up to 60% signups. Dropbox offered free 500MB space for both the advocate and the referred.
- Amazon Prime – Amazon uses well-written content, a strong call to action and encourages users to share experiences with their friends through Amazon Prime.
- Airbnb – the company offers an effective two-way incentive offer. The recipient and the referrer are both eligible for discounts on the platform. Airbnb is known to offer some of the best referral programs for their customers.
- Evernote – the note-taking app awards points to customers each time they make a referral. The points can then be redeemed against the premium features of the app. The app now has hundreds of millions of users. Thirteen million of these were referred by users.
What Are the Advantages of a Referral Program?
Many business owners might wonder why they should start using referrals when they already have other marketing strategies implemented. But, referral marketing is actually one of the most powerful marketing tools. Individuals referred by other customers have a 37% higher customer retention rate according to Annex Cloud.
The lifetime value of a new customer is 16% higher than a non-referred customer. There are several factors of utilizing referrals that contribute towards its success. It’s a cost-effective marketing tool that gives you extensive reach to new customers. Your brand and name are spread organically.
A referral program has the potential to offer accelerated growth to a business. With today’s advancements in social media, a single Facebook post could end up in front of hundreds or even thousands of future customers. Re-tweeting and re-posting can mean a referral could go further, reaching a lot of people in a short amount of time. According to the New York Times, 65% of new business comes from referrals.
By offering a referral program, you can also intervene early on if a current member doesn’t refer your gym to a friend. There may be a reason for this, and by finding out early on, you can make improvements or offer a more attractive incentive.
Starting a Referral Marketing Program for Your Gym
Now that you’ve decided to implement a referral program for your gym, we’re going to take you through each step from start to finish.
How Do You Start a Referral Program?
Decide on an Incentive or Promotion: The first stage of creating a gym referral program is deciding how you will reward your referring member and referral. Offering an incentive increases the chances of referral; however, the size of the reward doesn’t appear to matter. According to the University of Chicago, non-cash incentives are 24% more effective at boosting performance than cash rewards.
Here are some incentive examples for gym referral programs:
If you have certain gym members who crush it with referrals, then consider creating rewards for different levels of referrals. So when a customer brings in one new member, they might get a free gym pass, but if they refer five members, they might get a three-month free gym membership.
Keep it simple: The program should be easy for customers to refer your business. How do you usually communicate with your customers? These should be the channels you use for your referral program. Make it easy for customers to get referral rewards. Think about the process your customers will go through to sign up.
The Top 10 Barriers Slowing Your Fitness Business Growth
Promote it: For your program to be effective, you need to get the word out there. Post about it across your social media channels. Use posters on your business premise to advertise the program and approach customers directly. Encourage gym members to spread the word about your referral program. Whether you’re using printed referral cards or keeping everything online, make sure to promote the program well.
How Do You Make It Successful?
Keep Track of Referrals and Pay Attention to Analytics: When you start a referral program, it’s essential to keep track of it and measure the referrals that come in. The first reason for this is you want to make sure that everyone who has referred you received the incentive you offered. Always deliver on your promise. You also don’t want to give away more freebies that you intended to by accident.
The second reason for tracking metrics is to find out if the marketing strategy is working. You can find out how many people have been referred to. Then find out if those people went on to become loyal customers and purchase memberships and services with you.
If your numbers aren’t what you expected, then it’s time to re-evaluate the referral program and see how you can optimize it to deliver a program that gives you a better return on your investment.
If you’re using a CRM for your referral program, this will help to organize the data and keep track of customer relationships. Save your referral’s details including name, email, phone number and the name of the person that referred them. This way you can reach out to both parties to arrange a visit and make sure they get their reward.
Provide an Exceptional Experience and Service: This goes without saying, but you need to give your new customers an exceptional experience. The first time and second and third for that matter should be memorable and provide the best service possible. How do you stand out from the thousands of other health and fitness facilities? Why should a new member sign up for your membership?
These are things you can use to grow your customer base and build a loyal following. To keep customers engaged and find out how to accelerate growth, check out our awesome ideas for gym membership retention.
How Do You Market a Referral Program?
How you market your program is crucial to your marketing strategy. You need to communicate with your customers where they are most likely to hang out both online and offline. There are several ways to market it and which ones you decide to use will depend on your target market and clientele.
With a whopping 84% of people trusting recommendations from people they know, referrals can be one of the best ways to get more business. Use your existing loyal customer base to get your customers into your referral program. Send emails and post across all your social media groups and pages. Make sure to feature a prominent call-to-action in your website as well as use push notifications through your app.
Paid advertising such as Facebook ads and Google Adwords are also a great way to get in front of potential customers. For some social media marketing inspiration check out:
- Social Media Marketing Workbook: 2019 Edition – How to Use Social Media for Business by Jason McDonald
- 2000 Social Media Marketing Tricks: The Best Tips, Advice, and Practices To Grow Your Business: Facebook, Instagram, YouTube, and More by Invictus Media
Leave reminders in email newsletters and social media bios encouraging users to refer your gym. Depending on your business, posters and printed referral cards may work well for you. From talking to current members to running paid social media campaigns, you need to promote your referral program to gain the benefits.
The Key to Your Referral Program Success
To land a successful referral program, there are a few key ingredients you need. Great content which is well-written, easy to understand and grabs the reader attention is vital. Use a simple but fantastic headline. If you can gain attention and explain the benefit of joining in just one sentence, your customers will be intrigued. As well as excellent written content, use high-quality imagery. Images help to break up text and keep customers engaged.
There should be absolutely no confusion in the referral process for the advocate. Design a landing page with FAQs specifically for the referral program. Your landing page should look professional, so nothing too crowded. You want to avoid bombarding your customers with huge chunks of text. This is where the FAQs section is useful. It will help to explain your program in more detail and answer commonly asked questions.
Think about your timing when launching your program. Why not use these holidays as a reason to run the promotion? Don’t feel constricted to the typical holiday calendar. If you’re celebrating a business milestone like an anniversary, you can tie in your promotion to a celebration.
What Are the Key Points?
Maximize awareness and make it as easy as pie for customers to make referrals. To run a successful referral program, it needs to discoverable. Here are some fantastic ways to reach more people:
- Pin it to your social media pages
- Include in your email signature
- Have it on your main page on your website
- Build warm customer relationships
- Spread the word with blog posts
- Flyers sent to customers
Now you have the basics; there’s no stopping you in creating your kickass referral program to reap the benefits. It’s an effective marketing strategy that doesn’t require too much initial investment to launch. Once you’ve decided on your incentive that’s going to send your customers wild, it’s time to implement your gym referral program, accelerate growth and drive traffic through the door.