Many gym owners typically don’t think of creating a referral system when they think about gym marketing. The first things that come to mind are social media posts, Facebook and Google ads, and email marketing. These are all excellent ways to get leads for your business. But an even more effective way to get better leads is by creating a referral system in your business. Leads that come from a referral system are typically easier to close because someone they trust recommended them. There are some gym owners that base their whole lead generation strategy on their referral system (Check out the video below). This article is going to give you everything you need to create an effective referral system to generate leads for your gym.
Step 1: Cost Per Acquisition
In order to create an effective referral system to generate leads for your fitness business you need to start with what you know. You need to determine what you can spend on your marketing efforts. The way to do this is by calculating your cost per acquisition. The formula for doing this is your total marketing spend divided by the total number of conversions. So, if your marketing budget is $500 per month and you close 20 sales then your CPA is $25. The CPA will give you a starting place for how much you can spend in incentives to acquire referral leads.
Formula: Total Marketing Spend / Total Number of Conversions = CPA
Action Step: Calculate your cost per acquisition and document what you have to spend for incentives.
Step 2: Nail the Incentives
Now that you have calculated your cost per acquisition you can start to identify the incentives you want to offer. There are several angles that you can take and they all have their advantages.
Here is a list of possible incentives:
- Double sided: This is an incentive for both the person referring and the person being referred. Think about what you can do for both people and use some options below.
- Gift Cards: Offer gift cards for various local stores or popular companies that can fit anyone’s wants.
- Swag: This is an opportunity to get your brand out into the world. Offer t-shirts, sweatshirts, water bottles, or any other branded products.
- Percentage Off: Offer a percentage off a specific service that you offer.
- Philanthropic/For a Cause: Sometimes people don’t want something for themselves but they would prefer that the reward be donated towards an organization of their choice.
With the above examples, you can also create a tiered system. So that the more people they refer, the better the reward. Here is an example:
Tier 1: Free Shaker Bottle
Tier 2: $25 Amazon Gift Card
Tier 3: $50 Gift Card for Local Restaurant
This tiered system automatically tracks who is making the most referrals. This helps you identify who is really valuable and refers good leads who are actually your ideal clients. Think about how you can continue to reward them. So that they continue to make those referrals. The output here is the incentive, it should motivate your clients to refer people to you. So make sure that it’ll be in line with what they find appealing or interesting.
Action Step: Choose which incentive you would like to offer and whether or not you want to use a tiered system.
Step 3: Outline your Opportunities
You’re going to want to clearly understand all of the potential referral opportunities that you have. What are the opportunities? How frequently do they occur? These opportunities generally fall into one of these four categories: people, action, client achievements, events/promotions.
First think of the people around you. High-value clients, in other words, people that have spent a lot of time and money with your business, will typically have good things to say about you. These are great people because they truly believe in your service. Another opportunity is with clients that you know have large social circles. If you target them in your campaign then those referrals will create a stronger gym community. Clients are not the only people that can be a part of your referral system. Another opportunity is with staff members, allow them to participate in the referral system too! This gives you an opportunity to give them rewards as well.
Next, think about the actions that these various groups of people are taking in your business. One of the first ones that comes to mind is POS, point-of-sale. The client could be purchasing a product or a service and this is a great time to make a referral request. They are in the process of committing more money and time to you, so they most likely believe in your service and business. Another great time to make a referral request is when you receive praise on a specific program or when you receive general praise. This is when people are at their happiest and they will be glad to refer you to their friends or family.
Another great time to make referral requests is when your clients have reached a certain achievement. It could be a weight loss goal that they have reached. Or they may have hit a personal record. When clients see results from your program, membership, or training, they are at their most excited. They have worked so hard to get to that achievement. You were there during the hard times and you’re there when they’ve reached the goal. In that excitement, it is a great time to request a referral because they are feeling and seeing the results that you provide.
You can use open houses, workshops, and seminars to bring people together and to get referrals. You can create a “bring a friend event” where you choose a specific day where current clients can bring a friend to your gym for free. (It could even be for a specific program). This is a great way for these new prospects to get a feel for who you are and what you offer. Another promotion you can offer is a referral contest amongst your staff or your clients. You can offer a reward for the most referrals achieved within a certain time.
Action Step: Identify what are the people you have that fall into those buckets. And then identify the various opportunities you have to make those referral requests. Take it a step further by coming up with your own promotional idea.
Step 4: Entice with Ease
This fourth step has to do with messaging. What you want to do is remove the need to think about this on the spot. Or create assets to make this as simple as possible for you and your team. If you don’t have a plan this will result in really weak language and poor referral requests. An example of a poor referral request is: “Yeah, if you know anyone that’s interested just let me know.” Or even worse putting the burden of outreach on the referee or the person who’s trying to refer. An example of this is: “Yeah, just have them call me or let me know when they’re ready.” You want to have your messaging dialed-in before the conversation occurs. Even though you have incentives, at the end of the day, this person is doing something for you and your business. So you want to make it as easy as possible for them.
You may want to create an asset like a referral card. This makes it easy for you and your team. It will clearly give them all the information that they need to know to go make the referral. You will want to include a little bit about your business, your local market position, your differentiators and your contact information. Make sure that you make your referral offer clear.
Verbal Messaging Formula:
[Hey First Name]
[Express thanks, congratulations, or statement of appreciation.]
We are always looking for more people like you who are a great fit for our community. If you know anyone that’s interested in/looking to… [benefits you provide]. We’d be happy to give you [incentive].
Train your Team:
Once you have created your assets and created your own unique messaging for these referral requests. You’re going to want to train your staff so that they’re prepared to make these requests. The only way they’re going to be powerful and effective is if they’re prepared and confident in what they’re going to say. Similar to how you train your staff in sales conversations through role-playing, you want to do the same with these referral requests. Once they start getting into the habit of making the referral request, check in with them and see how they are doing and if they need help.
Action Step: Create your own unique messaging for different referral opportunities and decide if you want to create a referral card or not.
Step 5: Systemize for Success
The first step in systemizing for success is by setting a goal. You want to commit to asking for ‘X’ amount of referrals in ‘X’ amount of time. So using the opportunities that you identified in step 3, find out how many of these opportunities you typically experience on a weekly basis. Set a goal based on that number. For example, if you make 3 sales a week, 4 clients hit PR’s, and one person leaves a positive review. You know that is 6 opportunities to ask for a referral weekly.
Use your CRM, or some other way, to manage your list of clients and when you have asked them for referrals. You want to make sure that you’re managing the list so that you’re not asking the same people over and over for referrals. You don’t want to exhaust that same client. So if you ask a client make sure that you put them on the bottom of the list. This way you will have some time before you ask them again.
You want to keep your referral program at the top of everyone’s mind. Make sure you’re bringing it up to staff members. And sending it out in your weekly email newsletter. Internally, for example, you can use staff meetings to discuss it and use examples of when your team has an opportunity to ask for a referral. Externally, you want to make it visible by hanging a sign by the entrance or the exit that explains the program. Another way to keep this top of mind is to make sure that you publicly recognize when people are making referrals. So if you’re giving out gift cards take a picture and post it on social media. If you have referral contests make sure to announce them and the winner can also be announced in your newsletter. Just make sure that you make your referral program known because it can be one of the most effective ways to generate leads.
Action Step: Make your commitment of how many referrals you will ask for over the next two weeks. Then create a plan to keep your program at the top of everyone’s mind.
Gym Marketing: Key Takeaways
- Referrals are some of the most valuable and qualified leads that you can get in your fitness business.
- Be intentional with your messaging. Don’t leave referral opportunities to chance!
- Train your team. Equip everyone with the tools and skills to capitalize on these referral opportunities.
If you want additional training and coaching support on building a referral system in your fitness business then sign up for our FREE Mini Program.
(Want to learn more about what fitness business coaching can do for you? Check out this article to learn about how coaching can help you reach your goals.)
Success Coach, Fitness Revolution