Fitness Business School – Incentivizing Invitations

Full Transcript

Hey, it’s Pat Rigsby here, and in today’s episode I wanna talk with you about incentivized invitations. Let’s get started.

Welcome to the Fitness Business School podcast, the show for fitness business owners who want to grow their income, increase their impact and improve their lifestyle. Be sure to listen to the end of this episode because we have a brand new special offer exclusive for listeners. So stay tuned.

One of the simplest marketing tactics that, that I know is really basic and really simple, and frankly, it’s just this twist on referral referral stuff that, that we’ve all heard throughout the years. I don’t remember the first place that that I heard it, but I even did something along that line when I was running baseball camps. When I was a college baseball coach. There would be this referral incentive, like if you bring a friend, you get X, you get a discount, whatever.

Well, one of the challenges with incentivized referral programs is it kind of puts the referring party in this kind of middleman position where they are almost kind of like a commission sales rep. And I don’t necessarily know that most of the people that we’ve work with love that idea. Now they’re more than
happy to take an incentive if somebody joins, but they don’t wanna feel like they’re in this situation where they have to be the seller of this service, right? Like they just, they don’t love asking their friend to go pay for something in, in many cases, it’s not that nobody will, it’s just that like, let’s say that you’ve got a
hundred clients in your business, maybe 10 really will respond to that at a high level. So we got 90 other people that we’re just not getting a whole lot of referral traction with.

So that’s where incentivized invitations come in, incentivized invitations. It’s this wonderful way that we’re just basically going to our clients and we’re saying, Hey, you know what? Rather than invest money in running Facebook ads or direct mail campaigns, or whatever other marketing tactics you’ve typically
done and maybe your clients have seen, so they understand that you are investing money in those things, you just go to ’em and say, I would rather reward you for inviting other people that you think would be a good fit into experience. What we do, you don’t have to sell them anything. You don’t have to do
anything else. It’s just get them in for a training session or a week or if you have a front end offer that they can gift to this other person. And then we just come up with an incentive. And the incentive could be money, it could be swag, it could be a supplement, it could be an upgrade to a program, it could be a free
sessions.

But really what you have to figure out is you know what every guest is worth to you. Because one of the most common things I hear from business owners is that, hey, if I get somebody in the door, usually they stay. Now that may be the case. Maybe that’s kind of selective amnesia in some ways where we remember
the ones who do stay and we forget the ones who don’t or whatever. But usually there, there’s some truth to it, right? So let’s say that for every guest that you get that comes in and experiences what you do, whether it’s a free session or a free seven day trial, or free 14 day test drive or whatever, let’s say that
every two that come in one, buy one, stay on as a client, and then we think about, okay, well the average lifetime value of my clients, maybe it is $1,500.

I mean, it could be many multiples of that. It could be less than that depending on the business model that you have. But let’s say it’s $1,500. So if every client is potentially worth $1,500 financially to your business, that means every lead that actually comes in experiences, what you do is potentially worth 750,
right? So what would we pay to get somebody to really deliver this lead in the door? And it’s a really good lead because it’s somebody that is coming in and they’re likely a little bit more comfortable than the average lead because they already know somebody there. They’ve been pre-sold in, in some way, shape or
form, just because there’s social proof. There’s somebody that they know, like, and trust that’s recommending it. So if that’s the case, would you pay $20 for a guest to come in? Would you pay $30 for a guest to come in?

I mean, I see people very regularly pay three to $5 for a lead that opts in, and of those leads that opt in to a newsletter, to a text campaign, whatever. It may take 10 to 20 to actually get somebody to, to come through the door. So if we think about it this way, where I am only paying based on the outcome, I’m not
paying based on a potential outcome, which is usually that’s what advertising is. I remember spending $5,000 on a direct mail campaign hoping that it would yield a certain outcome. This, you’re only paying after the fact, right? So let’s say that in in the month of September, Hey, if you bring in at least one guest
for the month of September, then we’ll give you a $50 gift card towards our upcoming challenge. Or maybe we’ll give you our upcoming challenge, or maybe we’ll give you a 30 serving bag of our synthesis protein powder, or maybe we’ll give you one free personal training session, or maybe we’ll just give you
this new custom hooded sweatshirt that that we’re giving just to our client to refer.

But if we think about it that way, or it could just be a money or a gift card or something like that to a popular local business to a spa salon. And if you think about doing that, the nice thing is too, like let’s say that you give somebody a bag of synthesis protein powder, well, you are giving them something that has a
perceived retail value, what they would go pay for it themselves, but you are getting it at a wholesale rate. Same thing with swag, same thing like so. So you can give somebody that has a perceived value, something that has a perceived value of $50, and maybe you’ve paid 25 or $30 for it. And most of us
would pay $20, $25, $30 to get somebody to walk through the door to experience what we do day after day. Imagine if you did, if you spent $300 every month to bring in 10 guests, and of those 10 guests, five of them stayed, that would be a trade almost all of us would be willing to make month after month it.

I mean, it would be financially, it would be like, how do I, how do I spend 600? How do I spend 900 to multiply this? Because it’s that simple. It’s that effective. But frankly, we don’t think this way as an industry. We don’t think this way. When I tell people this, almost with that exception, the response is,
well, am I doing this just for them to walk in? Or am I doing this for them to actually join? I’m like, man, your clients aren’t commissioned sales reps. We are just saying, Hey, invite somebody in to experience this and this is what we’ll do. And you could do that one month and then maybe two months later you
come back and say, Hey, for every guest that you bring, let’s say in late November, early December, for every guest you bring, we’re gonna donate a toy to toy for tot toys for tots, or we are going to donate food to this local food drive for this holiday campaign that they have.

And so there’s this incentive that that we can keep going to, and you can turn it on and off. You can create something that maybe you’re just rotating through incentives, so you get people excited about it. But what’s great is people are going to like, people aren’t going to invite people in that they don’t like. So
you’re gonna get people that likely fit your culture that are more likely to stay, that really build on what you want. So if you’ve never considered incentivized invitations, it is a wonderful tool that you have at your disposal that will easily grow your business and really removes a lot of the risk. I mean, I’m all for,
like I’ve told you in many episodes in the past, we have run Facebook ads for pretty much every day that I have had my current business, and that’s eight and a half years and for, and spent hundreds of thousands of dollars running ads for my previous businesses.

And so I am definitely an advocate of that. But I also know that when I spend that money, the return on investment may be, may be significant, but usually there’s longer kind of lag for that type of investment. Whereas in this sort of thing, man, you’re getting a sales opportunity in front of you. You’re getting
somebody that you can convert every time, guaranteed you’re not paying for the potential to have a sales opportunity you’re paying because you got a sales opportunity. So it’s a really cool low risk way to grow your business. So if you haven’t tried it yet, incentivized invitations are definitely a way to go.

Thanks for listening to this episode of The Fitness Business School.

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