This week on BARBELL BUSINESS, we discuss:
- Why referred members are the most valuable members
- Why you cannot rely solely on “word of mouth” marketing
- How to set up a smart direct referral system
- Offering incentives – should you or shouldn’t you?
- Tangible referral cards that crush during the holidays
- How you can partner with local businesses for lead generation
Referred members are the key to cost efficient growth of your gym. They’re so valuable because:
- A referred member comes at a much lower cost of acquisition and a higher potential for retention and loyalty
- 1 in 3 people come to a brand through a recommendation, and customers who were referred by loyal customers have a 37% higher retention rate. (Deloitte)
- Word of mouth is the primary factor behind 20-50% of all purchasing decisions, especially when considering a first time buy or something relatively expensive. (McKinsey)
- They are overall better members as they are like those you already have
Since getting referrals is so critical to your business strategy, we’ve put together a few different ways you can make referral business the foundation of your marketing strategy.
Types of referral strategies
Implied referrals / word-of-mouth: this is when you do things that make it very obvious you’re creating a great experience without necessarily asking for referral. This sets up a situation where a friend sees results or hears how great it is and comes in to try it for themselves. Relying on word-of-mouth should be one of the tools in your arsenal. It spreads too slowly and there’s no way to control what people say. Remember, most people have a very HARD time explaining CrossFit.
Direct referrals: this is when you simply state your refer-a-friend program to your existing members and give them a way to refer people easily. i.e. a flier in the box, a CTA in the newsletter or website. In certain situations, this can be the most effective because it’s direct, however it can be awkward to ask for a referral if that just isn’t your jam.
With the Logic platform, we’ve advanced the direct referral program by automating it and adding context and lifecycle stage into the mix. We found that 6 months into a membership was the sweet spot for asking someone to refer a friend. Logic sends the 6 month member a smart survey which asks how likely they are to refer a friend to your box. If it’s a positive response, they’re enrolled in the Refer-a-Friend campaign which asks them who they’d like to refer and what they get as a thank you for spreading the love. To see how we do this, watch this short demo of Barbell Logic.
Tangible referrals: this is when you put something in the hands of your members that has real value and that they can give to a referral source. The thing we love about this strategy is that you can run it all year as a low cost, high exposure way to keep referrals top of mind. You can get some really great quality gift cards at www.fitnessgiftcards.com. Use coupon code DEAT for $50 off your order.
Community referrals: This is when you partner with a nonprofit or a local business and support their mission, events and needs. You can also offer promotional support by running the occasional promotion that benefits your partner. Your partner benefits from whatever sales occur and they’re also motivated to talk about and refer your gym to their customers. The great thing about taking this kind of approach is that you can build one program and then simply keep adding them until you have referrals coming from numerous sources.
If you want to learn more about creating programs that give back to the community, be sure to check out Evolved Enterprise, authored by our guest a few weeks ago Yanik Silver. Find it at www.evolvedenterprise.com/deat
- Watch this demo of Barbell Logic to see how automated referral campaigns work
- Get $50 off of referral cards for your gym at www.fitnessgiftcards.com with coupon code DEAT
- Learn how to give back to your community by ordering Yanik Silver’s new book Evolved Enterprise at www.evolvedenterprise.com/deat
- Simple referral tracking sheet