Create a Successful Referral Programme
Since GDPR came into effect back in May of 2018 leisure operators have had to adapt their member referral processes to comply with the legislation concerning personal data. This guide gives some tips and suggestions for how you can still make referrals your number one source of hot leads by utilising word of mouth marketing techniques.
For decades, marketeers have been generating leads through referral incentive programmes. If you buy double glazing then you’ll likely be offered a further discount if you provide 3 friends’ names and numbers who might also be interested. Sky TV regularly promote their ‘Introduce a Friend’ offer and have used wine, M&S Vouchers, Sky package discounts and pre-loaded credit cards as incentives.
Leisure has followed this route too, and for years we have been training sales teams and frontline staff to ask new members to provide names and contact details for their friends who might also be interested in joining. We estimate that word-of-mouth marketing is directly responsible for up to 20% of new membership sales each month and influences another 30% of buying decisions. Over 90% of consumers trust peer-to-peer recommendations than any other form of advertising.
The General Data Protection Regulation (GDPR) came into force on May 25th 2018 and was designed to modernise laws that protect individual’s personal information. In the context of referrals it is the section regarding ‘Consent’ that has had the most impact. For a person’s data to be processed that individual must give consent that is “freely given, specific, informed and unambiguous”. Therefore, an individual cannot provide consent for another individual, and so providing contact details for anybody other than yourself is not permitted within the GDPR.
Nope, none. Marketeers and advertisers will often look to manipulate or interpret the laws to still allow them to operate in a certain way that benefits their company’s goals. For example, within GDPR it allows individual’s data to be processed if the legal basis for doing so is “legitimate interest”. This ambiguous terminology is being used by many companies to promote their services to anybody based on the fact that the individual being targeted has a legitimate interest in their product. In leisure the common example is contacting ex-members with an exclusive offer just for previous customers. In this case has the customer given consent or are they being contacted because organisation can justify a legitimate interest? Currently this is left to each organisation to interpret and make a judgement based on their risk levels towards GDPR.
Without the ability to collate referrals directly from new members where does this leave us in leisure? Well, if you’ve been at the frontline trying to collect referrals in this way, then you’ll know over the past few years it has got more and more difficult to obtain contact details from new members. In an era of heightened awareness of privacy laws, protection over personal data and data breaches being reported in the media, customers are becoming more protective over their data let alone giving out the details of their best friends and family.
Over the past few years operators have had to adapt their strategies concerning referral programmes.
Here are some ways to operate a successful, GDPR-compliant referral programme.
Touchpoints to Highlight your Referral Programme
Your referral programme should have two key focuses so far; an incentive for the members to refer their friends, and guest passes to encourage new customers to visit your centre.
A comprehensive referral strategy will then have a number of touchpoints with both members and guests to highlight and promote the referral programme:
Point of Sale
As an alternative (or in addition) to handing out guest passes in welcome packs you could offer to send the new member an email that they can forward to their friends which invites them to redeem a free pass. We would recommend setting up a bespoke landing page on your website that this email directs them to which can track the responses and includes a “Name of Referring Member” on the contact form.
Train your front-of-house teams to recognise and acknowledge new members. Not only is this great customer service to make the new customers feel welcome, it presents an opportunity to open up a sales conversation such as:
“How are you enjoying the centre? Did you get your guest passes when you joined?” or “Is everything going ok with your membership? Just a reminder that your guest passes expire after 2 weeks”.
Your fitness teams should have access to guest passes which can be given to new members if a conversation opens up about their friends who may be interested in joining.
Also, when a member achieves something positive (participates in a gym challenge, hits a fitness milestone) the fitness team can hand out a guest pass as a reward and encourage their friends and family to join in their success too.
Each month your centre should be sending communications to new members, existing members, ex-members, prospects and casuals. Each of these messages should be bespoke to the target audience but take the opportunity to talk about the referral programme.
New member emails should welcome them to your centre and remind them of the free guest passes in their welcome pack. Ex-members and prospects should be encouraged back with a free pass and reminded that when they join they can also refer their friends and benefit from the referral programme.
Word-of-mouth is now being replaced by world-of-mouth, in that social media is making it easier for us all to have conversations across the world and spread good and bad news further and quicker than we ever have. Ten years ago if we found a great product or service we’d tell people face-to-face when we next saw them, nowadays we share it on Facebook, send it round a WhatsApp group, write a blog about it, video it live and post it on Twitter, etc. Leisure operators need to capitalise on this with their social media channels.
- Encourage customers to leave reviews on Facebook, Google, Yell.com, TripAdvisor and any local directory sites that you may be listed.
- Turn these reviews into testimonials and share them with your followers and use them in your next membership campaign literature.
- Post on your own channels about your referral programme and the incentives for members to refer their friends. Encourage followers to tag friends who may be interested.
- Use social media advertising (Facebook, Instagram, Twitter) to promote free passes at certain times of the year. Analyse your conversions from passes and target these demographics when setting your advertising criteria.
Our final tip is to ensure you have literature around your facilities promoting the referral programme. Avoid having these as permanent fixtures otherwise they simply become wallpaper that customer’s ignore. Consider some of these alternatives:
- Movable roller banners that can be rotated between the studios, reception and on the gym floor.
- Floor stickers in areas where customers hover, i.e. drinks fountains, noticeboards, reception areas.
- Ceiling hangs – large dropdown posters from the ceiling that catch people’s eye
- Strut Boards – bespoke die-cut strut boards that stand out from the rest of the banner adverts
- Machine tags/displays – discreet but noticeable promotions on gym equipment
- Digital Screens – these are becoming increasingly lower in cost to advertise multiple services and products within your centre. They can also be a revenue stream if you advertise local businesses.
GDPR has not killed off the referral process, it has merely made leisure operators think differently about how we encourage our members to be our best source of leads and future sales. It is worth noting that members will not refer their friends if they don’t enjoy using your facilities, and guests won’t join if your service levels don’t live up to ever-increasing customer expectations. Whilst referrals are seen as part of your sales and marketing strategy, they are heavily influenced by your retention efforts across the whole centre.