Give and You Shall Receive
Referrals are the lifeblood of your gym, and you should do whatever it takes to maximize your referral efforts. Unfortunately, I still see many gym owners still refuse to give something away in order to get a referral. Oh sure, they give away a prize AFTER a referral joins, but never before. Why not try giving something to your member, regardless of whether or not their friend joins. “Give and you shall receive” is one of the greatest lessons in life; and as it turns out, it’s one of the greatest lessons in your fitness business as well.
Think of something that you can provide a member as an incentive to provide you the names and numbers of the people in their life they would most like to see join the gym. I know that it’s not always easy to ask them to offer this information, especially if they’ve been a member for a while. However, you’ll be surprised at what people will do for a guaranteed gift. Immediate satisfaction is a powerful weapon to use to get your members to give you referrals.
Instead of offering a free month IF one of their friends join offer a free month if they give you the contact information for five of their friends. You might have them go one extra step and have the member text those five people right there on the spot with a special offer you’re willing to give the member’s friend. In exchange for this, give them their free month right away.
OMG! What if everyone takes me up on this offer? I’m going to lose a lot of money next month! Relax, even if 100 people take advantage of this, you can space out the months when you’ll comp their dues. In addition, don’t forget that if 100 people do this, you now have five00 names, numbers, email addresses, mailing addresses, etc to market to!
Let’s assume your monthly dues on average are $40. Realistically, 40 percent of the leads given to you will be bogus or will never answer the phone right? So that leaves us with only 300 relevant leads. Let’s also realistically assume that you can get only 20 percent of these remaining leads in for a tour. That leaves you with only 60 people who come in for a tour. And since I’m sure you’re pretty decent at sales, you and your staff have an 80percent close rate. Which means, out of 500 leads, you end up with 48 new members from this promotion.
One month of dues at $40 x 100 referral participants equals a $4000 decrease to your bottom line for giving away the prize. But, 48 members x $40 per month, on a year term equals an increase of $23,040 to your bottom line, giving you a net increase of $19,040 in revenue. Not bad for giving something away up front rather than after their friend joins. And don’t forget, that’s 48 more people to collect five friends’ contact info at the point of sale.
The only explanation I have for why giving before receiving works in this scenario is the fact that people LOVE immediate gratification. “I will give you a free month RIGHT NOW, if you share with me five people you would like to see working out at the gym.” “I will give you this gym bag and t-shirt and coffee mug right now if you’ll help me identify some people you’d like to give a special membership offer to.”
People love free stuff, but more importantly, people love free stuff right now. They see it in your hand, and they want it in their hand. The value proposition is stronger if you give them something now rather than if their friend joins, and they are more likely to participate for the immediate gratification.
You don’t even have to give them any other incentive if their friends join since you already gave them a gift up front. They can be rewarded knowing that their friend is being provided a special offer because of their standing at the gym.
To really promote this referral program, don’t forget to promote it from a variety of angles. Put signs up all over the gym, send letters to current members with a form for them to put their friends’ contact info on, call your best members, call any member who has referred in the past, email every member, text every member, have your front desk tell everyone about the promotion. And when you send an email, simply tell them to put their friends’ contact information in the email and you’ll have a prize waiting for them the next time they come to the gym.
I would also call it a “Nomination” rather than a referral contest. They can “nominate five friends to receive this gift today.” If you give away a tangible gift rather than a free service (monthly dues, personal training session, boot camp, etc), make sure you put it on display so they can see what you will give them the moment they offer up their friends’ information.
Happy lead collecting!
Curtis Mock is the host of www.FitnessBusinessTelevision.com the TV show for fitness entrepreneurs. He is also the executive director of gymsuccess.com. Curtis can be reached at firstname.lastname@example.org.