#022: How to Create a Gym Referral Program
Referred members are arguably some of the best members you could hope for. They’re already prepped to have a long-lasting relationship with your business and are excited to get into the groove with their referring friend who’s been talking you up for months now. Referrals are a major factor in cost-effectively growing your gym – but relying solely on word-of-mouth to get the word out is inconsistent and too passive to our liking. There’s another way…
This week on Gymwright LIVE, we break down the most effective ways to create a consistent and systematized flow of referral members.
How to create a Gym Referral Program:
- Keep the process very simple and easy to remember.
- Create a give/get incentive.
- The incentive should be worth at least 50% of a month’s of membership
- Automate the process and ask for a referral at the 6-month mark with a survey-to-referral strategy.
- Surprise them with an extra low-cost and high emotional value gift.
Watch the show below and check out the detailed show notes on this page for more info on the points above. This show was recorded live on Gymwright’s Facebook page on Friday, March 9, 2018. Join the conversation about gym referral programs here.
Table of Contents
- 1:15 Why all gym owners should have a systemized referral program
- 8:35 Keep it simple
- 13:30 How much should you offer as an incentive?
- 15:09 When should you ask for a referral?
- 18:46 Referral lifecycle strategy
- 28:36 What other incentives can I offer?
1:15 Why all gym owners should have a systemized referral program
First some considerations . . .
In a 2017 study, 7,500 small biz owners were surveyed to find out what they thought was the best way to get local customers. 85% of the business owners surveyed said word-of-mouth marketing which usually means their primary marketing strategy is just offering a good service and hoping for the best. That’s too passive and not consistent enough to be a reliable strategy.
While there are ways to create a system that works better, you can still optimize your word-of-mouthiness by perfecting your local listing. If people on the street are talking about your gym, you should make it very easy for them to find you online lest lose them to one of your competitors who ranks better than you. For more info on how you can improve your local SEO (search engine optimization) check out our Gymwright LIVE on: How to Improve Your Gym SEO.
Second, while having people out in the community talking about your business is great, you also have to realize that the effectiveness of word of mouth is different from industry to industry. If you’ve discovered a restaurant you really like and you tell your friend he should go there – it’s a simpler sales message to get across than someone explaining functional fitness to someone.
To the uninitiated, constantly varied, high-intensity movement etc etc is seen as this unconventional, crazy, intense thing. So, even if at the moment you feel as if your word of mouth marketing is effective in bringing in new members, just consider how many of those conversations and referral attempts are going horribly wrong that you don’t know about. This is why we create a referral system so you have more control over the more friction causing aspects of this word of mouth process.
Here are the benefits of getting referrals:
1) Low-cost. Referrals cost almost nothing to acquire. You’re not paying for ads and if you have an email automation system and client management system, the tools that you need to set this up the right way is already there. The only cost of a referral might be the incentive and gift.
2) You start at a higher point of trust. When you meet a potential new member for the first time, you need to show up “trustworthy.” There is really no better way to show up worthy of one’s trust than through an introduction from someone the prospect already trusts. You can see referrals like “borrowed trust.”
3) The cost of membership is usually less of an issue. When you work from referrals, people are almost always willing to pay a little more when you’ve been recommended by someone they trust. In fact, if a significant component of your member attraction plan is referrals, you can usually charge more for your products and services.
4) Referrals also beget referrals. A member obtained through a referral is actually much more likely to give referrals.
5) It’s fun. It’s a fun way to do business – especially if you create a “referral lifestyle” which we’re going to cover today. The prospects you call want to hear from you, they want to meet with you, they trust you more from the start, and are already excited to become a part of your tribe.
Image Credit: ICE NYC
8:35 Keep it simple
Putting together something that’s too complicated just won’t be easily remembered and likely not taken advantage of. If you want someone to do something, you have to make it easy for them. There’s an entire TED Radio Hour on this topic of “nudging.” If you can easily convey it in one sentence, you’re on the right track.
The approach we take is: Give/Get.
Here’s an example: “If you refer someone and they become a member we’ll give the $100 to go towards their membership and we’ll give you $100 which will go towards your gym membership.” Simple to understand. And it works because you make it about being able to give something rather than it feeling like a bribe. It empowers them to feel good about doing something good to make it easier for their friend or family member.
Remember, most people are afraid to be told no or shot down and even if they love you they’re still going to be hesitant to ask their friends or family. you don’t want to have them do the selling. You want to create a process in which they just make the introduction, you do the selling, and they cheerlead.
13:30 How much should you offer as an incentive?
We like to keep the number the same so it’s extremely easy to remember: give $100, get $100. Give $75, get $75.
As far as the value goes, the gift should be at least 50% of what your gym membership is. It makes it feel very substantial to the new member and for the referring member. It’s proven to work very very well as we’ve implemented this hundreds of times at other gyms.
15:09 When should you ask for a referral?
You want to ask for a referral when the athlete is feeling really good and comfortable in the community and with the movements which is at about 6-months from starting at your gym. It’s proven to be the sweet spot. We’ve implemented a survey-to-referral strategy to 100,000’s of members and again it’s worked very well.
18:46 Referral lifecycle strategy
The Platform’s referral process is based on lifecycle stages.
- 3-days in after becoming a new member we plant the seed of this program by sending an automated email that introduces the RAF program. While some will respond, most won’t but that’s not the point. The point is to plant the seed.
- At the end of their onboarding program, we suggest our gyms give an in-person announcement explaining the RAF program “…and by the way we have a really great refer a friend program.” This speech one time in person will get your early adopting promoters to do something about it to get the ball rolling but then you can leave it alone.
- 6-months of being a member triggers an automated satisfaction survey. One of the questions on the survey is “how likely are you to refer us to your friends/family?” If the answer is very likely a few days later an email automatically reminds them of the friends and family offer and gives them the link to proceed. And if it’s not a good rating, a notification is sent to your administrator telling them they should check in with this member.
It’s never salesy and never pushy.
The RAF program is a form on the site that’s built into the campaign architecture. they start putting their info in the forms and you follow up with them. make sure you pass on this info so you the don’t think we’re spamming them. It’s a great systematic way to get more referrals.
28:36 What other incentives can I offer?
Consider low-cost high emotional value gifts like handwritten “thank you” cards to make things feel really personal. Add a $10 Starbucks card, and you have an amazing referral incentive package that touches on all of the feels.
How much more likely do you think your members will refer members with the strategy above? You’re encouraging good behavior and starting that snowball effect that brings the bulk of your leads in through referrals. Your business should be able to run and grow off of referrals alone. If you’re not at the moment, you should reevaluate how you’re managing referrals.