A well-crafted member referral program could be just what you need to make your club, organization, or group known to the rest of the world.
Gyms, YMCAs, golf clubs, mentorship programs, special interest groups, and similar entities require new members to grow and thrive. Some membership organizations might not have a business side, but they cater to people with identical passions and interests.
What exactly is this strategy, and who can benefit from it? Relax. We’ll enlighten you about this topic and prepare you to create a similar program for your organization. You’ll learn the best practices, too. Let’s start.
What is a Member Referral Program?
As the name implies, a membership referral program is a business strategy leveraging shared interests and passions among members of an organization, club, program, group, and similar entities.
It’s like referral programs, where customers invite friends and social contacts to try a business’s offerings. The only difference is referrers are members, and their job is to encourage colleagues, acquaintances, and friends to become members of their clubs or organizations.
In return, the organization or club offers rewards or incentives for every new member gained through the program. Hence, the goal is to grow membership, not the customer base or sales.
Why Choose Member Referral Programs?
A referral program is the soundest marketing strategy for any membership organization or business. Here’s why.
First, a membership program is perfect for like-minded people to share experiences, impart knowledge, and help one another optimize their skills. There is an instant connection when members congregate.
And here’s the fun part. Your members have social contacts who are not yet members of your club. They know their friends and acquaintances will also love your brand.
That brings us to the second point. Members become your brand spokespersons or advocates. They can encourage friends, acquaintances, and colleagues with similar interests to join your club. There’s no better ambassador than someone who knows and appreciates everything about your organization.
Here’s the thing (and our third point). Nine in ten individuals trust word-of-mouth recommendations by peers. You will feel more confident that potential members will trust your members’ words.
Would you be surprised that members referred by friends and acquaintances are more likely to stay with your club or organization longer? Studies show businesses with an effective referral program can boost customer retention by 37%.
That’s our fourth reason why membership programs are great for your organization. A well-designed referral strategy can expand your membership base. Members attract more new members into the club while staying longer with the organization. The net effect is an ever-growing membership.
Lastly, leveraging members’ social connections is more cost-effective than mounting an all-out member acquisition marketing campaign. Members bring new members to the club, and you only give them a membership incentive for every qualified referral (i.e., you don’t pay if the referral doesn’t become a member).
A referral program saves you more money by leveraging members’ social connections and trustworthiness. Remember, people’s trust is a powerful instrument for growing your membership business.
Who Can Benefit from a Member Referral Program?
Member acquisition programs benefit clubs, special interest groups, organizations, and similar entities. However, it’s not for everyone. Just because you have a group of people paying membership fees doesn’t automatically qualify you to set up such a program.
Like everything else, a referral program is perfect for membership businesses with certain characteristics.
First, your business must have a robust online presence. An official website is ideal, supplemented with social media accounts and other digital channels.
How else can members refer friends, acquaintances, colleagues, and social contacts to your organization if they cannot connect digitally? After all, nearly two-thirds of the global population surf the web. That’s how people connect.
Not having an internet presence can make inviting new members more challenging. Signing up for a membership can also be frustrating. You will not have any means of engaging members (both existing and prospective). Converting audiences into club members will be a chore.
Hence, a responsive and easy-to-use website is necessary. It must offer value to members.
Second, your business must have dedicated members. They must love your offerings. Otherwise, marketing your organization to potential members can be challenging.
So, membership referral strategies will only benefit businesses or organizations with happy members.
And this brings us to the third requirement – exceptional member experiences.
Such a referral program is beneficial if your organization delivers exceptional services and offerings. High-quality engagement must also be present. After all, you want to convey a message about your brand looking after members’ welfare and happiness.
If you tick all three boxes, your organization will benefit from a well-designed referral program.
How to Create a Member Referral Program?
You can start creating and designing a program for acquiring new members to your club or organization if you have a robust internet presence, dedicated and happy members, and stellar member experiences. So, how do you begin?
Identify your referral sources
Your first task is to determine your referral source or where prospective members will come from. Although potential audiences can come from anywhere, zeroing in on the most common channels can make new member acquisition more cost-effective.
For example, suppose your membership club is about business people, entrepreneurs, and like-minded individuals. Facebook might be an option. However, professionals are more active on LinkedIn. You might want to focus your marketing efforts on this social media platform.
Some prospective members might prefer receiving invites via email or messaging apps (i.e., WhatsApp and Telegram). Others might not use these platforms, preferring organic web surfing.
So, how do you identify your sources of prospective new members?
You could analyze your existing members’ social interactions. What platforms do they use to communicate and interact with friends and acquaintances? It should give you an idea about the likely sources of potential traffic.
For instance, if 80% of existing members use Facebook to engage social contacts, focusing on this platform will give you the best results. Moreover, Facebook has over three billion users who could become aware of your brand. They might not be interested in becoming a member but might know someone who might.
Decide the rewards and incentives for participants
Identifying where prospective members will come from is one thing. Now, you must devise a strategy to attract them. Accomplishing this objective is easy if you offer existing members something they cannot resist.
You can look at it as the carrot-in-a-stick trick. You will want existing members to become excited about promoting your brand and encouraging their social contacts to join and become members.
An enticing referral program reward helps you accomplish this mission.
You could offer a discount on membership fees. For example, existing members would appreciate it if you could slash 20% off their annual membership dues. The higher the perceived value, the more encouraging to members. After all, nine in ten consumers love exceptional deals.
Not a fan of discounts? No problem! You could offer free gifts. For instance, you can entice gym members to refer friends by rewarding them with special items. You could partner with an energy drink provider or a gym apparel brand for the giveaways.
Coupons and cash rewards are always an option.
You can also give incentives to referees (friends and social contacts of existing members who become new members of your club). We call it a double-sided reward because referrers and referees receive something special.
For example, you could give referees (new members) a 10% or $10 discount and a similar incentive to their referrers.
Whatever reward or incentive you decide, ensure its value doesn’t undermine your club’s bottom line. Ideally, expenses for rewards must be lower than revenues.
Set up the program’s rules
Rules exist to guide people. And since we’re talking about membership programs, you will want members to abide by regulations to enjoy the rewards.
A rule worth establishing is referral qualification. What do you consider a qualified referral? If a member refers a friend twice, does that mean you will also reward the referrer twice? Does visiting your website translate to a qualified referral, or do you need the referee to sign up as a member?
What platforms or channels should existing members use when inviting social contacts? Should it be social media only or a combination of websites, social media, and emails?
How will the program credit referrals to referrers? What incentives or rewards do they get? Do referrals have equivalent points or weights to gain a reward?
So, think about how existing members should invite friends and acquaintances to your membership business. Write these as rules or regulations and prepare to share them with members.
Select the right referral program software
Launching and managing a referral program for membership businesses isn’t as straightforward as it seems. You will manage a membership database that includes existing and prospective members.
Memberships have unique attributes, although members share a common interest. They vary in age, location, socio-economic status, and other demographics. Existing members have preferences, too. Some might be more at ease with social media platforms, while others are more confident with emails.
And then there are prospective members or referees. Where do they come from? What interests and passions differentiate them from existing members? How many of them clicked referrers’ referral links?
You will also produce and develop referral submission forms, invitations, landing pages, and other tools to mount an effective referral program.
Managing heaps of data and loads of resources can be intimidating. That’s why membership businesses should consider a referral program software. You’ll never worry about mounting and handling your referral program with such technology.
You can check out UpPromote because it’s easy to use and offers customization to suit your organization.
Promote your member referral program via multiple channels
Promoting your program on all possible channels makes sense. This strategy boosts your new member acquisition. After all, not all prospective members will come from the same source.
You can start with social media platforms. Would it blow your mind to know that three in five people worldwide have social media accounts? That’s nearly five billion people!
Facebook alone has over three billion users, while YouTube has about 2.5 billion. WhatsApp and Instagram aren’t far behind with two billion users.
Create captivating social media posts and engage social media users in a friendly exchange. Comment, share, and like posts and pages to increase engagement.
Please don’t forget about emails. This channel is more personal than social media because you communicate directly with the recipient. You could encourage existing members to use an email template inviting email contacts to become members.
And here’s why no business should neglect email marketing. This channel is 1.74 times more effective in converting traffic into members than social media.
Please don’t forget your website and traditional word-of-mouth marketing. These strategies can still bring new members to your organization. Moreover, word-of-mouth promotions have the added advantage of meeting and interacting with members face-to-face. It should motivate them to invite more friends.
Track performance and optimize your program
Organizations and clubs would want to know if their program produced membership growth. More importantly, they must determine if the growth is the referral campaign’s direct result. Otherwise, there’s no point in mounting such a strategy.
That’s why businesses must constantly monitor the program’s progress.
For example, if the organization expects a 10% increase in membership in the first three months, tracking reports must reflect this value. If the figure is lower, clubs can tweak their program to ensure more robust results in the succeeding months.
Monitoring a referral program can be tricky without the right tools. Although you can use ordinary spreadsheets (i.e., Excel or Google Sheets), referral tracking software is more convenient and accurate. You shouldn’t worry about this if you didn’t skip Step No. 4.
7 Best Practices for a Successful Member Referral Program
Creating a membership acquisition program is one thing. Ensuring it delivers the expected results is another. You could wing it or observe these seven best practices to achieve the best outcomes.
Keep your program simple
Increasing your member referrals starts with a crystal-clear message – invite a friend to become a new member and get rewarded. It cannot get any clearer than that. Of course, you can play with words, but keep it concise. Observe the action-incentive-urgency format, and your existing customers will go on a referring spree.
Check your membership goals and determine what actions you must take to achieve them. Translate these strategies into realistic member actions.
Moreover, you will want the referral process to be seamless. Although referral forms are necessary, lengthy questionnaires can make a prospective member want to back out.
Be clear about the rules. For instance, you might want the new member to stay with the club for at least two months before you can reward the referrer. You can also limit the number of referrals per referrer per month. For example, they can only refer up to ten new members monthly to avoid incurring additional expenses on incentives.
The bottom line? Keep your referral program simple to ensure better understanding and more convenient joining.
Show your appreciation
Showing existing members your appreciation for promoting your brand can go a long way towards nurturing positive relationships. Although you can give incentives and rewards for each referral, frequently engaging members is sometimes better.
Small events or gatherings celebrating organizational achievements can make members feel more at home. They’ll see your brand as a family or a friend. Talk with them. Send emails every now and then. Send gifts on birthdays, graduations, promotions, holidays, and other special occasions.
These things might not have monetary value, but your members will appreciate the gesture.
Of course, incentivizing member efforts to attract new members to the club works. That’s why you might want to devise a lucrative reward system to motivate members and show how much you appreciate them.
Select the right time to ask for a referral
Membership businesses must recognize the nature of asking for a referral, even from members. It’s a favor. You’re asking someone to accommodate your request to drive new members to your organization. And that includes the right timing.
Think about it. Would you ask a friend a favor if you observe them as cranky or depressed? Most folks would wait for the dark clouds to disappear before asking their friends for a favor.
It’s the same with asking members for referrals. You will want to pop the request when members are in a good mood.
For example, suppose a new member posted a positive review about your club on social media. That’s your cue for opening the possibility of referring a friend.
What if the member wrote a scathing review? Would you still ask for a referral?
We won’t. Instead, we will reach out to the member and understand the circumstances behind the negative review. Maybe we could help them and turn the experience into something positive. And if we solve the member’s issues and they are happy, we can ask for a referral.
Here’s a tip. Ask members for referrals when they’re happy with your organization.
Prioritize the best advocates first
Not all members of a group are enthusiastic about promoting your brand. Some might prefer focusing on membership activities to inviting social contacts to become new members.
That’s understandable. And that’s why you might want to identify your best advocates. They are the happy members who appreciate and value your organization’s relationship with them. Loyal members are upbeat about expanding the membership base because they know how your club can benefit others.
So, how do you identify them?
First, check their histories with your club. Loyal members stay with organizations longer than disgruntled or unhappy ones. They value friendships and the many benefits your club provides. Check their participation in organizational activities. Were they active?
Next, review their social media comments and posts. What are they saying about your membership business? Is it positive?
You could also try administering a Net Promoter Score (NPS) test to identify the promoters, passives, and detractors. You will want to partner with promoters (NPS scores between 9 and 10) to refer more new members to the club.
While anyone in your membership business can refer new members, you might want to prioritize inviting the promoters (the best advocates) into your program.
Offer double-sided rewards
You can reward the referrer (existing member) and the referee (new member). That’s what double-sided referral rewards are.
The idea stems from the observation that friends are more likely to join each other’s pursuits if they enjoy similar benefits.
It’s like this. If you were a marketer, wouldn’t you find promoting products to a friend easier if you could offer him something other than the product? Membership businesses offer members rewards or incentives to invite new members. So, why couldn’t existing members do the same for their referees?
For example, suppose you give members a 10% discount on monthly membership dues for a year for every qualified referral. Your referrer has an incentive to invite friends and social contacts.
But then, the referrer also needs something to entice the prospective referee to become a member. So, you can give the referee (new member) a $10 discount on the first three monthly membership fees.
Now, your members have a “carrot” to entice prospective new members.
Select unique and meaningful rewards
Rewards and incentives are excellent motivators to get members to invite social contacts to your organization.
However, rewards must be valuable and meaningful. Otherwise, your existing customers won’t feel the need to go out of their way to refer your organization to their contacts.
You might want to analyze your advocates’ passions and interests to determine the most meaningful rewards for them. For example, some folks prefer gift cards to discounts or cash rewards. Others might opt for special items and similar giveaways.
Ideally, the reward must be something you don’t usually offer. It must be unique to convey how much you appreciate advocates’ efforts to bring new members to your brand.
Personalize the referral message
Personalization conveys warmth and appreciation for the person. Hence, you might want to give existing members resources for writing personalized messages when inviting friends, acquaintances, social contacts, and colleagues. After all, they are the ones reaching out to prospective members.
For example, you could create a message template with customizable sections. Advocates can fill in the blank segments with their thoughts, giving the message a personal touch without detracting from your brand messaging.
Here’s a tip. Encourage member advocates to consider the benefits of inviting a friend when personalizing a message. They could reflect on their experiences as members, and they would want referees to enjoy the same.
FAQs
- How do I know if my member referral program is successful?
You can collect and analyze referral data and compare it with your objectives. It’s the only way you will know if your program is successful. For example, if you aimed to grow the membership by 20% within a year and managed 25%, you can consider the referral program successful.
- How can I promote my member referral program?
Use multiple marketing channels and platforms to reach as many potential members as possible. For example, you can combine conventional blogging with email and social media marketing to promote your program. Referral technologies can simplify processes and make promotional campaigns more efficient and productive.
Conclusion
Any organization, business or otherwise, deserves to grow and flourish. That’s the idea behind membership referral programs. It empowers clubs, organizations, special interest groups, associations, and similar entities to expand their membership. Doing so strengthens their collective voice, making them more relevant in their advocacies.
The strategy isn’t different from other marketing tactics. You leverage people (members) connections and reward them for accomplishing tasks (referring new members). Why some organizations are more successful than others boils down to how well they implement and manage their membership acquisition programs.
This article should boost your confidence in creating and managing one.
