Your existing members are the backbone of your organization. They're a reliable source of ongoing revenue that should be nurtured and maintained for the years to come.
But your members also serve another important purpose. By referring you to their family and friends, they can drive in new members to your association.
While it’s possible that your members will be so impressed with your service that they will go out and tell the world about it on your behalf, most require some additional coaxing in the form of a member referral program.
These plans create incentives for referring members and the new customers they bring in, rewarding them for their gesture and encouraging them to repeat it again and again. In this scenario, everyone wins, which is why several associations are offering referral programs to their members.
But what makes a good referral program? What other associations have succeeded in creating popular programs? How can you create a can’t-miss member referral program that actually works?
In this article, we’re going to answer all of these questions and more.
What Makes a Good Referral Program?
A membership referral program urges existing members to bring in new customers by incentivizing the process. This can include a free membership period, discounts, swag, and other notable incentives that can encourage your members to bring in their friends and family members.
A good referral program knows who to target. For example, you should try to reach out to your strongest advocates first and foremost when launching the program. This includes long-time members or members who have shown a particular passion for what you’re offering.
For example, at a health club, this could include members who come in regularly, those who have left you positive reviews, and brand-new members who are at their peak excitement level when starting a new fitness program.
For something like a meal delivery kit, you can focus on members who recently renewed their service or those whose renewal is just about to come up. The incentive you offer might be enough to both encourage these members to revive and bring on new customers with them.
Good referral programs also reward both the referring member and the new members alike. Not only are you incentivizing the existing member, but you’re making the deal sweeter for the new member to join. It’s also important to choose incentives that are both attractive to the members and cost-effective for your organization.
Finally, a good member referral program considers the preferences of existing members. You understand what these people want and need, as you’ve successfully marketed to them in the past. Now, you must appeal to those wants once more to craft an attractive member referral program.
Notable Referral Program Examples
Many organizations have created exceptional member referral programs, using existing members to expand their reach. Here are some of the best examples out there of referral programs that work.
The health club LA Fitness has a VIP referral program that gives members points for every new member they sign up.
For every enrollment they bring in, they get 1,000 points. These points can then be redeemed for valuable items. For example, the 1,000 points you get for bringing in a new member can be redeemed for a stainless steel water bottle. But if you can bring in 25 members and accumulate 25,000 points, you can get a brand-new Apple Watch!
How to Create a Referral Program Step-By-Step?
Identify Channels to Promote Your Referral Program
There are several places where you can communicate directly with your members to let them know about the exciting referral program you’re rolling out.
First off, there’s email marketing. You should have the emails of all your subscribers, so reach out to them directly and tell them about the incredible incentives you’re offering. Consider using an email marketing system for this.
You can also promote on your website or app, both on their main pages and in members-only sections where your dedicated members can access their account information. Make sure you’re really emphasizing the perks they’ll receive so that they don’t overlook what you’re offering.
If you have a brick-and-mortar establishment, like a gym or health club, you can hang signs there and encourage these referrals while your members are using the facility.
Then there’s social media, which can be a useful place to share information. If you have a members-only Facebook group, for example, this could be an amazing place to talk about your referral program and how your existing members can benefit from it.
Create Resources to Alert Your Members
Before you can share the good word about your referral program, you need to create resources that will help you communicate the information effectively.
This means crafting expert copy that eloquently illustrates the benefits you’re offering. It also means creating visuals like signs and images that convey the proper feeling to your audience. You can display these visuals in your association, share them on social media, and send them out in email blasts.
Find out how to create interactive Facebook posts here.
Take Tailor Brands as an example. They have a wildly successful referral program, and the proof is all over social media. They have a selection of products that participants can choose to promote, from their logo maker to their LLC services. Users love partnering with Tailor Brands because they offer excellent commissions (up to $500 per referral) and professional support. They even have personal dashboards for affiliates to use to track their campaigns and commissions.
Remember, you’re trying to push the benefits of your membership referral program. So on top of hyping the incentives, the referring member will receive, show them imagery like two friends exercising or cooking together. Describe the benefits of having a friend accompany them on their membership journey.
Set up Tracking
You’ll have to ensure that you have the right system in place to keep track of your various members and the new members they bring through the door. Remember, this referral program is an extension of your memberships, and if there are hiccups and inconsistencies, it makes your association look weak or incompetent.
Let’s say you are running a point system like LA Fitness. If you’re not properly tracking those points and a member decides to cash them. They then discover that they have far fewer points than they should. You might lose a member because of your referral program in such an event.
So, make sure that you’re tracking the progress of the program, keeping a record of every referred member. This will also help you evaluate the overall success or failure of the program later on.
Identify your Incentives
Now it’s time to decide what kind of incentives you’re going to offer your members. It’s important to make sure that the incentives you offer both serve a need that your potential members have, and are financially viable for your organization.
For example, Samsara offers up to $500 in rewards when a colleague or friend you referred purchases any of their products. This includes fleet dash cams, security equipment, or software.
The best part is that both the referrer and the new customer get rewards. Now, $500 in rewards is a great incentive for your existing member and the new customer they bring with them. But that’s not something every organization can afford. You don’t want to cut off your nose to spite your face.
If you’re losing money on every new member, your referral program will be a huge burden on your organization. Instead, figure out what you can afford to offer and make it seem as lucrative as possible.
It’s relatively less expensive for service providers to offer a discount with their referral programs. Let's say you are a TV package provider. By offering additional discounts to members who bring in referrals, you’re providing an incentive that comes at a very small cost to your association. For example, Infinity Dish offers free monthly movie rentals to first responders. That’s an affordable incentive that can be easily replicated for members that bring in referrals.
Gamify your Referral Program
Gamification is a tool that can make the incentives associated with your referral program feel more fun. Basically, gamification assigns a point value to actions, turning the referral process into a giant game that your members are playing to win prizes.
The LA fitness example we listed before is a great example of gamification. You earn points for every referral. You can then either save those points for larger prizes or spend them on smaller offerings.
In the image above, you can see some of the prize options, starting with a stainless steel water bottle and going all the way up to a pair of expensive Bluetooth headphones.
People love to feel like they’ve won something. They enjoy competing in games and find the entire process thrilling. By including gamification, you’re adding an element of fun to the experience and creating a more fulfilling and engaging program. People will want to bring more of their friends in so that they can earn new points and save for an expensive gadget.
List your Possible Referral Sources
By keeping track of where your members referrals are coming from, you can better understand what platforms are working best for your referral program.
For example, if you’re finding that more members are coming to you with referrals because they received an email, that’s an effective platform and should receive more attention in the future.
To learn how to write the perfect membership invitation email, read this article.
If, on the other hand, you’ve had little to no success from social media posts, perhaps you should shift your focus away from that platform. This could mean a simple slow down or it could lead to you dropping that platform entirely from your membership referral program.
Make sure you’re tracking this information. When someone comes to you with a referral, ask them where they heard about the referral program. If you’re not keeping track of this data, you’re leaving a lot of money on the table. Plans like this will naturally evolve, and you might be surprised at how effective or ineffective certain platforms can be.
Track everything in your CRM, or at the very least an Excel spreadsheet. That ensures the information can be looked up at a moment’s notice and compiled into a report when necessary.
Start With Member Referral Templates
If you’ve never run a member referral program before, then it might be wise to start off using referral templates.
These are sample layouts of sign-up forms that can be altered with your company’s branding to make the process easier for the referring member and new customer alike.
You can also create templates that can be rolled out across your company. In the image above, you’ll see several potential places where templates can be applied.
- The sign-up page for the program
- The initial email invite to your member
- The referral program portal
- A direct email invitation
- A member referral feedback form
- A social media message
- A referral message is delivered to the new member
- A referral landing page
By using these templates, you can ensure you’re getting all of the proper data and delivering your messaging in a way that aligns with your brand voice.
Your existing members are not only an excellent revenue source for your association. They also are a potential referral source, delivering motivated new members who will sign up with your organization ready to start using your services.
To review, when creating your member referral service:
- Identify the channels you’re going to use for promotion.
- Create the resources that will hype this program for your existing members.
- Set up tracking systems so that you can review data.
- Identify the incentives you’re offering and ensure they’re financially viable and attractive.
- Gamify the program to enrich the experience.
- List all of your possible referral sources.
- Use member referral templates to start with.
By doing this, you’ll be able to set up a winning member referral program that works and generates recurring revenue for your association that will pay out for years to come.
If you would like to explore how Glue Up can help you accomplish your mission and increase membership growth, contact us.
Our team will get back to you with a demo of our all-in-one software to automate your membership management processes, maximize retention, and pamper your members with the premium experience they deserve.