Over the years, I have worked across many different industries in many different roles. Whether my primary accountability was sales, service or product marketing, there is a single truth that continually emerged; a focus on referrals accelerates business growth. The more personalized the business model, the more truth to the statement.
In telecommunications, the impersonal nature of the sale meant that referral business was heavily based on quality of service and product capabilities. Build a better product, retain more customers and reap the benefits of them recommending you to new customers.
In the consulting world, word-of-mouth referrals generated better than 70% of new business every year. That referral business was the direct result of a personal relationship combined with outstanding results.
The reality is that there is a multi-point connection between maintaining your current customers and gaining new ones. In a fitness business, it’s not only the personal connection with the coaches and business owner, it’s also the connection with the other gym/box/school members. That sense of community is what leads a current customer to reach out to a friend with, “you have to come with me, the place is AWESOME!” That’s not just a referral, it’s advocacy.
At the deepest level, your loyal customers become advocates for what you are doing and bring more business in. It also leads to a business model that transcends a single coach, business owner or class as the reputation for the organism that is your business spreads and grows.
So I like numbers, here’s how it works:
- Every customer who is an advocate (let’s assume 30 of the current 100 customers in this model are advocates) brings in a single additional member per month.
- Of those new members, one third become advocates 3 months after joining and follows the pattern of the first thirty advocates by referring one member per month.
- In a single year, that member base grows from 100 members to over 700 with nearly 150 new members per month coming in from referrals alone.
Now is the time to start. Make sure you’re giving every existing member as much love as the prospects you’re trying to recruit. Ask your current members to bring their friends and neighbors.You are a force in their lives, they will be happy to introduce you to their circle. Market to your existing members. Run referral programs and throw them a few bucks, a discount on their membership or a “wall of fame” presence for bringing more awesomeness to your business.
Get step-by-step tips on how to create, promote and measure your own referral program in our free 7-Step Guide to Creating a Successful Referral Program.