The Importance of Referral Programs for Your Fitness Business

Members are the beating heart of every fitness business across the country and around the world. Without them, you wouldn’t be able to stay in operation. But one of the biggest challenges most business owners — not just in the fitness industry — face is getting new members through the doors.

You might have the best facilities and equipment, offer the most inclusive and wide-ranging classes, and provide exceptional customer service. Yet, it’s not enough to simply open your doors and wait for members to roll through. 

There are almost 40,000 different types of health club facilities across the United States, meaning competition to attract new members is at an all-time high. And not only do you want to attract new members, but you also want to attract the right kind of customers. 

For fitness centers, implementing a referral program could be the perfect solution. It’s no secret that people tend to trust referrals and opinions from friends and family. It can often be the best kind of proof someone can receive without having to try something for themselves first. 

To help, we put together this guide that will break down everything that you need to know about a referral program for your fitness business. We’ll cover how they work, some benefits, how to plan and execute one, and more. Keep reading to learn all about the importance of referral programs!

What Is a Referral Program?

Basically, a referral program is a way to reward your existing members for helping bring in new customers. You can leverage their personal network to attract customers that you might not have had the opportunity to otherwise. The overall cost of rewarding your existing member is also going to be far lower compared to the lifetime value a new member will bring. 

This will ultimately contribute to generating more revenue as time goes by even though you might offer a few products and services for free at the time. Think about how often you might rave about a new product or service you recently used to your family and friends. When you can encourage and entice existing members to do the same thing about your fitness business, it becomes a win-win for everyone involved. 

Statistics have shown that people are four times more likely to make a purchase when they get referred to a product or service by a friend. 

Referral Program

How Does a Referral Program Work?

The general concept of a referral program is quite simple. Think of it as a specific marketing tool that leverages the power of word of mouth. The basic idea is to entice and incentivize your current members to refer their friends, family, or anyone else they may know. In the end, this leads to your fitness business gaining new members. 

It’s important to recognize that when implementing a referral program, the incentive needs to appeal to and benefit everyone involved. Existing members need to get something in return and so do new members. 

For example, if a member refers a friend, they might receive a free gift bag of gym merchandise or a discount on the price of the next month of their membership. In return, the new member might also receive a discount on their first month or receive one free personal training session. 

One of the greatest things about a referral program is you’re able to get creative with the product or service members get in return. Using this type of marketing strategy allows you to leverage your existing members and have them act as brand ambassadors. 

Main Reasons to Use a Referral Program

A gym referral program is an excellent way to attract and acquire new members, and it’s cost-effective. The only real expenses you’re going to have are the products or services you offer as an incentive. 

They can also play a major role in customer retention strategies. When members have people that they know are also part of your fitness business, they’re going to be more likely to stay members for longer. And having loyal members is good for your bottom line.

It becomes a win-win situation for everyone involved and it’s a low-cost type of marketing strategy. 

Benefits of a Referral Program 

You might have other marketing strategies in place that are doing a pretty good job at raising brand awareness. So why should you change things up and implement a referral program? Because when someone is referred by a friend to either try or purchase something, they’re more likely to use that product or service for longer. 

It establishes a level of brand authority, which makes referral programs one of the most powerful marketing tactics at your disposal. Statistics show that the lifetime value of newly referred customers becomes almost 16% higher compared to non-referred customers. 

Here are some of the biggest benefits of a gym referral program:

  • Increase the number of members in your gym 
  • Build a dedicated and loyal community of customers 
  • Reduce customer attrition and increase customer retention 
  • Generate additional revenue
  • Members get rewarded, leading to long-term loyalty 
  • It’s cost-effective

How to Plan a Referral Program

Now that you have a better sense of what a referral program is and how it works, let’s dive into how to plan and execute one. 

The first step is to choose which type of incentive you’re going to use. How are you going to reward both existing members and the new ones they refer to? What are you going to offer them in return for their referrals? Here are a few ideas to help you get started: 

  • Discounted memberships 
  • Free fitness classes
  • Free membership for a month
  • Free merchandise, like gym gear
  • Gift cards, like massages

An important thing to consider with your incentives is that the total size of the reward doesn’t necessarily matter. Whatever it is that you offer, an incentive drastically increases the chances of a referral becoming successful. 

You can also take it a step further and add layers of incentives. For example, if some existing members are regularly bringing in new referrals, they could receive higher incentives for every five or ten new members that sign up. 

But, always keep things simple. There’s no need to overcomplicate the process and you want it to be as easy as possible. 

The next thing you’re going to do is determine how you’re going to promote your referral program. There’s no sense in putting a strategy together if you’re not getting the word out in the most effective way. 

Think about how you usually engage with and interact with your members. Is it through things like posters and flyers? Is it across your social media channels or through regular emails? 

Here are a few effective ways to implement your referral program:

  • Word of mouth. Connect with your members and engage with them. Explain what’s happening and the benefits of them taking part. This will encourage them to interact with their friends and family to help drive referrals. 
  • SMS messaging and emails campaigns. Leverage the power of marketing automation to set up communication channels. Create a strategy that targets existing members through SMS messaging and emails explaining what the referral program is. Continue to highlight the benefits as the program proceeds. 
  • Advertising and signage. Strategically place posters and other signage in your gym and around the community in high-traffic areas. This helps keep the program top of mind and ensures that members are aware of what’s happening.
  • Social media. Use the reach that your social media platforms have to spread the word. Members can like, comment, and share posts about the program to help raise awareness and increase the number of referrals. 

You can use one of the ways outlined above or you can use a combination of a few. Whatever avenue you use, leverage the reach that you already have to encourage members to get on board. 

How to Execute a Referral Program and Make It Successful

Once you have the strategy of your referral program in place, it’s time to execute it. One of the most important things to consider is how you’re going to keep track of it, monitor it, and measure new referrals. 

You want to make sure that if a member is delivering on what you asked for, you’re also delivering on the incentives you offered. But the good news is this can be easy to track. You can leverage the power of online tools, like a CRM, or use a simple spreadsheet. Whatever you choose, just ensure you’re keeping things accurate and up to date. 

Once you execute your strategy you’re also going to want to track and monitor analytics. This is going to provide valuable insights into whether or not the program is working and if you need to make any adjustments. 

Analytics can offer details into how many people have been referred, who these people are, where they’re located, and any other details that you might find important. If things aren’t working the way you had expected, you might need to evaluate a few things. 

Here are some of the most effective ways to reach a wider audience:

  • Post to your social media platforms
  • Highlight the program on your website’s homepage 
  • Engage with your members and build relationships 
  • Send flyers to customers
  • Hang posters and other signage around the gym

With all of that said, the most important aspect of executing your referral program will likely be exceptional customer service. You can have all of the tools in place to spread the word and incentivize your members, but if new members aren’t met with a valuable experience it could all be for nothing. 

What does your gym do to stand out from the rest of the competition? What are the services you offer that make members want to join? Essentially, why should the new member sign up at your gym? 

Knowing all of these details inside and out makes a big difference when you start to market the program. Communicating these details effectively to your target market will lead to a higher chance of success. 

Think about this: almost 84% of people trust the recommendations they get from a friend or family member. All of these things go hand-in-hand to help drive your referral software solutions and reach the broadest audience. 

Here’s a quick recap of how to execute your program:

  • Determine the way you’re going to implement the strategy, like word of mouth, campaigns, social media, advertising, signage, or a combination of a few.
  • Track and monitor analytics to find areas of both strengths and weaknesses.
  • Adjust if needed.
  • Provide an exceptional customer experience throughout the program.
  • Deliver on the incentives you promised. 

Examples of Fitness Business Referral Programs

There have been some great examples of fitness businesses running successful referral programs. Here are a few of the best: 

  • Gold’s Gym — Gold’s has had several successful referral programs over the years. There have been ones that are specific to program members and ones that are specific to franchise owners. They regularly promote their Turn a friend into a training buddy campaign to help drive new members to their gyms and reward existing members for helping.
  • 24 Hour Fitness — This referral program was called Fit for all your friends and there were a few options to incentivize members. They could choose between either a MyStore coupon or a free training session if they invited a friend to the gym. If the member’s friend joined the gym then there were additional rewards, but the referral would still receive a 3-day pass.
  • YMCA — Several YMCA locations run their own, independent referral programs. But one location offered a Save up to 20% if a member referred a friend. Both the existing member and the new members received 20% off their memberships in a double-sided reward. 

Start free trial

The Importance of Authentic Customers 

It all starts from the top. To have authentic customers, you need to have an authentic brand. When you’re authentic it leads to higher customer loyalty which will contribute to them being long-term members. 

And that’s exactly what you want. It’s great to get new members through the doors, but if they leave after only a short period then it doesn’t provide any value to your small medium business. Authentic and loyal customers are going to become your own brand ambassadors. 

They’ll help to promote your fitness business without even realizing it. All of this will help with customer retention. 

Take a look at a few of the main benefits of being an authentic brand:

  • It promotes a higher level of trust 
  • It leads to a deeper bond of customer loyalty 
  • It allows you to engage with and create deeper connections with members

Why Do Customers Trust Word of Mouth Referrals?

Word of mouth has always been one of the most effective marketing strategies. Why? Because it’s based on a high level of trust and it typically comes from friends, family, or other people close to you. According to a report, 92% of people are going to trust a word of mouth referral from someone they know compared to any other type of advertising. 

And in the day and age of social media and online reviews, a customer can quickly access millions of authentic experiences from other customers. To help put it in perspective, check out these referral program statistics: 

  • When referred by a friend, a customer is more than 4 times as likely to make a purchase 
  • Over 83% of people in the United States are more likely to make a purchase when a word of mouth recommendation comes from a friend or family member
  • 72% of people will trust an online review the same way they would a personal recommendation 
  • 81% of consumers get influenced by a friend’s social media post
  • Just 1,000 customers can generate almost 500,000 conversations about a specific brand using word of mouth

Conclusion 

As you can see, referral programs can be an incredible way to help boost revenue, increase customer retention, and provide valuable incentives for your members. There isn’t a perfect recipe for putting together a program as it’s going to be what works best for your fitness business. But the first step you’re going to take is deciding what type of incentive you’re going to use. 

Think of things like discounted memberships, free membership for a month, or free personal training sessions and swag bags. From here, you can begin to put a strategy in place for how you’re going to promote the program to the widest audience. 

Leveraging the power of social media, word of mouth, and using traditional advertising like hanging posters, SMS messaging and email campaigns are all good ways to spread the word. Before you know it you’ll be creating deeper relationships with members, promoting a higher level of trust, and establishing long-term loyalty. Referral programs are an effective way to reward members and build an engaged community. 

Are you looking to take your fitness or wellness business to the next level? Gleantap is here to help you scale in the most intelligent way. By using the power of automation, we help you simplify the way you handle sales and marketing to deliver a faster and more personalized customer experience. 

Take your fitness business further and reach more customers with Gleantap.

start free trial

Connect

Subscribe

Join our email list to receive the latest updates.