Bring a Friend – Why it helps move the bottom line & How to implement!
01 November, 2019
A couple of days ago we chatted about why allowing your members to ‘bring a friend’ can enhance your business, but we thought we should explain the financial why and the HOW?!
How can ‘bring a friend’ impact your business revenue? Let’s look at some numbers, if every member at your gym successfully introduced a friend during the year, then your 50 members turn into 100, and based on a $60 per month membership you are looking at $36,000 extra annually. What would happen if, for every new member, they are also actively encouraged to bring another friend, are we now talking another 50 new members and another $36,000 per annum? When you think about the power in the numbers, you’d be crazy not to incentivize your members to bring along friends and family. PLUS, we already know that these members who train together will stay at your gym longer. More members with better retention, who doesn’t want that?!
“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.”
So how is it done?
Based on the above information we know that people are more likely to continue with exercise if they sign up with a friend or family member. We also now know that more people equals more revenue, so what are you going to do with this brand new information?! How can you create a ‘bring a friend’ environment at your gym or fitness business?
Here are some of our favourite referral ideas:
- Incentivized referrals
- Bring a friend pass
- Dedicated campaigns at set times of the year (Mother’s Day (maybe mum gets a special trial offer), Father’s Day, New Year, Birthday Vouchers)
- Family pricing
- Challenge a friend and one of you wins
- In gym events for friends and family
- Family challenges
- Facebook Challenges (all Facebook friends participate, the winner gets one free month or a free personal training session)
- Hand out physical referral vouchers to your members, that they can hand out to their friends and family (make it as easy as possible for them!)
Allowing your clients to bring a friend is a form of referral marketing. The overall advantages of referral marketing include increased member number (and longer-staying members at that!), increased revenue, and increased customer satisfaction! If you don’t have a referral program in place at your gym or fitness centre, then you need to get one in place right now!
How can you start your ‘bring a friend’ promotion?
Decide on the incentive: What do you plan on offering that person that comes into the gym with an already signed up member, and what will you give the person who brings their friend? Offering an incentive will increase the chances of a referral, and we can’t stress enough that you should NOT skimp on the incentive. If a new member is worth say $3,000 per year to your business, and your average member retention period is 24months, the lifetime value of that sale is $6,000. If you had to advertise for new members through external channels you would also be paying a substantial sum to acquire this member. So use the money that would have been spent on media, on a decent prize for the person making the referral. Branded collateral, cash rewards, dinner vouchers, wellness packs…put some thought into what is really going to turn the dial of your members and get them actively talking to their friends. In terms of incentivizing the person that they bring to join, this could be as simple as offering them their first class for free, waiving joining fees, and we also recommend some cool free stuff such as a t-shirt or a drink bottle, a welcome pack as such. People love free stuff! It generally adds more value to your proposition worth more than what it actually costs to buy it.
What is the style of promotion?: We’ve given you some nice ideas earlier on in this blog to get you started. Again think about your members, their demographics, their interests outside the gym. What style of ‘bring a friend’ promotion is going to excite them? For a very young market, it may be an event or challenge within the gym, for an older demographic perhaps it’s a free movie night they can bring friends along too, family-style gyms perhaps it’s a ‘sign up the whole family’ push.
Keep it simple: This program should be easy for customers to refer to your business. Utilize the channels you normally use to communicate with your customers and make it easy for customers to get referral rewards. Members need to be educated on how to make the referral and we recommend you put process in place to award the prizes immediately. If people can see the benefits straight away, they are more likely to do it again, and other members will also see it happening. If someone refers and then has to wait four weeks to get the prize, it can leave a sour taste in their mouth.
Promote it: In order for any program to be effective, it needs to be promoted! Emails, SMS’s, Gym Newsletters, Social Media, Referral cards and In-Gym collateral such as posters are all ways you can communicate to your existing membership base for little or no cost.
If you have space and plan to run ongoing referral promotions then perhaps set up a specific corner in the gym – a nice inviting space that will serve as a constant reminder to members. Make sure the space changes to promote the latest offer, and perhaps a big tally board of who is leading the promotions at your fitness centre. Everyone loves competition, and you could offer a really BIG prize at the end of the year for the person who has brought in the newest members.
Change it up: Just a note on referral programs. Here we are specifically talking about a ‘bring a friend’ promotion. Don’t just run ‘bring a friend’ time after time, all year long. People will switch off to it and referrals simply won’t happen. Switch up your style of referral and don’t have big campaigns back to back. We would recommend three a year, possibly four if you have the membership base to support it. You can have ongoing ways for people to refer such as vouchers, a specific space to make referrals, or a year-long challenge, that’s fine, but when you have planned campaigns you should allow some time in between the promotions.
How do you make it successful?
Keep track of results! This may seem like an easy thing to do but try to stay organized with your ‘bring a friend’ program. Keeping track of the number of referrals that come through the door can be key analytics for your business. This is also a great opportunity to get information from the referred parties as to why they decided to come in and/or why they did or did not sign up for a membership.
Tracking metrics can also help in understanding if this marketing strategy is working. You can understand how many people have been referred and who your top referrer is! Everyone walking into your business is a lead, finding out how they found out about your business is important in being able to foster the lead to close the sale. You may discover data as to the best time to run your ‘bring a friend’ promotion – are there key times of the year this works. Or is there a style of campaign that worked better than another.
If your numbers are not where you expected them to be the simply re-evaluate the referral program and see if you can change up the offer to deliver an offer that makes people walk in the door!
Want us to get you started with referral marketing? Sign up for our FREE individualized referral vouchers TODAY! First ten applicants only