Member referrals are an extremely valuable source for finding new members for your gym. When we analyzed how people find martial arts schools, 21% of people found their current gym through a referral. However, 41% of people decided to visit their gym for the first time based on a referral – This means that an additional 20% of people looked for an opinion about a potential gym from someone they know, before trying it out.
While 21% increase in member signups is nothing to scoff at, that number is significantly higher at schools that have a good referral program in place. In addition, members who arrive through referrals already have a stronger initial tie to the gym – as the person who referred them can act as support and motivation for the key first few months of training, when most new people quit.
What makes a good referral program
In order for a referral program to make a real impact on the flow of new members, the following key elements need to be in place:
- Incentive – The additional reason for existing members to act and invite people they know to your gym
- Simplicity – The program should to be easy to understand and use
- Awareness – Members need to be constantly reminded and made aware of the benefits of referring new people
- Process – Tracking and rewarding successful referrals
When all 4 elements are addressed, a referral program can become the strongest channel you have for acquiring new members, and definitely the one over which you have the most control. Let’s examine each of these in detail:
Incentivizing members to actively refer people
Most people would be happy to train with someone they already know. If they like the gym, the instruction and the art you are teaching, they’ll gladly spread the word. So the first step is to make sure your school is a place people would recommend – by creating a welcoming atmosphere and a strong gym culture (we’ll be discussing this in future articles).
As we can tell from the 21% figure mentioned at the beginning, people are referring new members on their own, even though most gyms don’t have an actual referral program in place.
Those referral are mostly passive rather than active – they happen when the topic of training comes up naturally in a conversation members’ have with someone they know. The goal of having a referral program is to reduce the element of chance, and motivate members to actively invite people to join your gym.
We do this by providing a reward for making a referral. Examples of common referral rewards include:
- A free month of gym membership
- Free gear – most commonly at martial arts schools, would be giving away a new uniform
- Private lessons with the head instructor
Different people are motivated by different things. In my opinion, getting something for free is a stronger motivation than saving money, which is a more passive reward.
Getting a brand new uniform is much more fun than saving money you would’ve have spent anyway, but it also depends on your financial situation. Consider the overall makeup of your gym members when deciding on referral rewards – and perhaps even give a choice between a couple of options.
In addition to rewarding the referring member, you should provide incentive for the referred person to try out the school. I would always recommend having a free trial period for new members, and you can extend that for people arriving via a referral. Another option would be giving away one set of free gym patches (if your gym has those) to members arriving via a referral. Those small extra benefits help new members feel that you are willing to go the extra mile to make them feel welcomed.
Keep it simple, stupid
KISS – or Keep It Simple, Stupid, is a useful principle for many systems, and referral programs are no exception. I’ve seen some pretty elaborate referral rewards schemes, and while it’s obvious the people who designed those programs meant well, it ends up having an adverse effect.
Some gyms have multiple tiers to their program, to help create more urgency with making referrals, and also to make it a competition among gym members. For example, the person who refers the most people in a month, gets an extra reward – such as a private lesson with the instructor. Those can definitely help, as long as the program is easy to follow.
Make it easy for members to get referral rewards – they refer someone who signs up, and get rewarded once the referral pays for their first month. Don’t have multiple steps and conditions, such as referring 5 members who sign up for at least 6 months and visit 3 times a week, to get a better reward. Members can’t keep track of those conditions (and can you?), and it will not motivate them better than a simple “Invite a friend, get a reward” program.
Constantly build awareness of your referral program
You don’t want to be pushy, so you mention your referral program once every now and then, and hope that should do the trick. Whatever you’re currently doing is likely not enough.
People forget, don’t pay attention, or simply weren’t there when you made the announcement. You need to keep the benefits of referring new members on top of people’s mind in order for the program to be effective.
There’s a few ways you can do this without coming across as too pushy or annoying people.
- Remind people about the referral program once a month via Email. Hopefully, you already send gym updates through Email to your members, but if not – you should get started. (Easily mailing your members is one of our key marketing features).
- Mention the referral program at the end of class. Make the announcement shortly before you send the reminder Email, and mention you will provide all the details again over Email.
- Mention the referral program before the beginning of your next beginners curriculum cycle, at the beginning of the new year, the start of summer break, and other relevant occasions when people are looking to start training.
- Have business cards available at the front desk in a prominent location, next to a pamphlet about the referral program. People who stand by the front desk will read it while they wait.
- Mention the referral program when you sign-up new members (often referred to as point-of-sale referrals). Each new member has his own social circle he can make referrals to, and the time they sign-up is when they’re most excited about joining a new gym. Inviting people they know to train with them also takes away some of the anxiety of starting out at a new place, and especially martial arts schools which can be a bit intimidating at first.
If you do go the route of having another reward for the members who refer more people than others, a good idea would be to announce the winners publicly at the end of a class and via Email, to help remind members of the benefits of making more referrals.
Tracking and rewarding referrals
One of the most important parts of running a referral program is being able to track and properly reward a referral when it happens. It’s a good idea in general to keep tabs of how people found your gym when they visit or sign-up, in order to keep on top of your various marketing efforts.
You could do this manually with an excel spreadsheet or even pen-and-paper, but ideally the software you use to manage your gym could track this information for you. When we just launched our product, one of the initial feedback we received addressed this point specifically, as most existing gym management software doesn’t provide this functionality.
I’ll briefly cover how we did it, for reference. We added a simple interaction at the end of the member / visitor sign-up form that records how the member hear about you. It looks like this:
You can then access, on demand, a list of all referrals made, in order to reward the referring members according the program you have set-up.
Having a structured process to tracking and rewarding referrals is key to tying everything else together. If you miss out on rewarding a referral, your members lose the incentive to do future referrals, or worse, lose some trust in you.
This is the 3rd part in our gym marketing series. So far we covered how people find martial arts gyms, and search optimization. In the next articles we will be covering using social media for member acquisition and retention, building your brand on online communities and online advertising.