This article originally appeared on MINDBODY.
There are two components to any referral program. What’s in it for the referrer (your client) and what’s in it for the prospect. While many businesses focus on how to create an incentive for their current customers to bring in someone new, what you offer to their friends matters just as much, if not more, in how likely you are to convert them to a paying customer.
We researched the referral offers for hundreds of businesses using Perkville to identify what types of offers are most common and which offers convert the best.*
38% of Perkville customers in the fitness industry used a free offer for referred prospects. These free offers included a free day pass or free class. Fitness businesses using this type of offer had an average 11% conversion rate--meaning 11% of prospects sent this offer became paying customers.
Another 28% of fitness businesses used an offer with a discounted price such as a discounted class pack or month of membership.These include offers like 30 days for $30 or 10 classes for $100. These fitness businesses had a better average conversion rate of 13%. That’s right--offering a free incentive usually isn’t worth it. (You can learn more about why here.)
36% of salons using Perkville used an offer showing the amount off such as $20 off your first service. These salons had an average conversion rate of 11%. Another 36% of salons used percent off like 25% off your visit. These salons had an average conversion rate of only 6%.
30% of spas used a percent off discount offer like 25% off your first service. These spas had an average conversion rate of 9%. 14% of spas used an offer with a discounted price like a new client massage $49. These spas had an average conversion rate of only 4%.
We hope these stats help inform how you structure your referral program.
Although this blog offers business advice, this content is for general informational purposes only—it is not intended to replace the guidance of a licensed legal or financial professional. Information created by third parties that we may link out to or feature on our site is not endorsed by us and remains the responsibility of such third parties. MINDBODY assumes no responsibility for errors or omissions in the content.
