Next-Gen Loyalty – Reinventing Referral & Rewards Programs
The current state of fitness studio engagement, retention, and motivation is undergoing a significant transformation with the introduction of next-gen loyalty. Studios can no longer rely on outdated promotion methods to attract new clientele; instead, they must present solutions for providing unique or individualized experiences to keep current clients coming back. Modern members are looking for an environment where they feel part of a unique experience, not just another member of the gym down the road. Creating a fun and personal loyalty program increases momentum for repeat attendance, as well as helping ensure that an individual will continue promoting your business in a positive manner after leaving the premises.
This change is more critical today than ever. By implementing innovative ways to reward current members for their loyalty and referrals, fitness studios will be able to establish true means of developing long-term growth, reducing attrition rates, and building a genuine sense of community amongst members, rather than solely focusing on offering temporary price breaks.
What Doesn’t Work in Traditional Referral Programs?
For too long, studios have been utilizing the same referral programs. While these programs may seem comfortable or predictable, they generally fail to establish sustainable relationships. A small discount or class only gets customers’ curiosity piqued for a moment; it does not usually lead to any permanent changes in behavior.
Some examples of why traditional referral programs do not produce the expected benefits include:
- Rewards do not seem significant enough to motivate people.
- Members tend to disregard the rewards after a few weeks.
- No progress or excitement exists regarding the reward program.
- Loyalty reward cards only acknowledge attendance, nothing else.
Today’s consumers are accustomed to receiving updates through various methods. Airline, credit card, and retail companies continually keep consumers informed of their progress and offer them exciting opportunities to earn their reward points regularly. Only if fitness studios aspire to attain their share of the attention do they need to adopt such practices. The new-generation loyalty program will be successful because it will employ principles of psychology, as progress will keep members engaged, members will be rewarded for progress, and they will be recognized for their various forms of membership participation.
Developing a Points-Based System for Rewards
A points-based system is one of the best ways to implement a next-gen loyalty Program (NGLP). The point amount given as a reward provides members with specific steps to earn rewards, along with incentives to encourage behaviors that support the studio’s growth.
Points can be a very effective way for studios to reward multiple types of actions rather than providing just a single referral bonus for bringing someone new to the studio as a potential member. This allows members to earn value every time they interact with the brand, rather than just by referring someone new.
Examples of a basic point system might include:
- Points earned for attending classes
- More point value for referring a new member
- Points earned for posting a review or sharing about the studio on social media
- Bonus points for celebrating special occasions (e.g., birthdays/anniversaries)
Over time, the points will accumulate, and when they reach a certain value, the member can redeem them for something that has value to them, as well as has an excitement component, while remaining financially viable for the business owner.
Sample items that would be redeemed for points include:
- Guest passes or free classes
- Studio-branded merchandise
- Personal training sessions
- Exclusive workshop opportunities
- Membership credits
This structure provides members with a reason to keep coming back because every time they visit, it will feel like they are making progress towards something. In addition, with the use of an automated gym loyalty application, the responsibility of tracking points and rewards is greatly reduced for studio employees. Studios can utilize a gym loyalty application to automatically track members’ points and provide them with real-time access to their account balance.
Using Points and Community Challenges to Create More Engagement in Your Studio
When it comes to motivating people to come to the gym and keep coming back, simply having points is effective, but using challenges with those same points extends the experience beyond just getting a point and turns it into an experience with others. Gamification takes the “routine” workout and creates a shared experience in that “game,” creating a community-wide buzz in the studio.
A challenge allows a member to have a short-term goal while helping develop long-term habits. The social aspect adds enjoyment to the overall participation of each member.
Some examples of effective challenges include:
- Monthly attendance challenge with a clearly defined reward
- Referral leaderboard that displays the top advocates of your business
- Team-based challenges that accumulate points across teams of members
- Seasonal campaigns that tie back to studio milestones
While these activities are designed to reward a member for their effort, they also foster connections between members and create accountability with one another. Therefore, when a member feels connected to another member, they are much more likely to remain competitive in their relationship with the studio. In addition, gamification allows studios to provide members with opportunities to be creative with referrals that do not seem forced or sales-like.
Members will typically see an increased retention rate based on factors such as a desire to finish what they started or be part of the gamification experience being offered in the studio.
Utilizing Technology to Enable a Seamless and Integrated Experience
The growth of the next-gen loyalty will rely on technology. The ability to track and monitor a loyalty program has to be very clear; otherwise, the best loyalty programs will lose their momentum. A loyalty and referral system needs to be simple for both staff and members. The more friction is removed from the use of technology, the greater the amount of participation there will be.
The following are key components necessary for providing an extremely simple and seamless setup:
- Automatic Visit and referral tracking
- Tangible points and progress on member dashboards
- Referrals tied to member accounts (via referral codes or links)
- Celebrating milestones of member notifications
Once the technology is in place, members will have the ability to see in real-time that their rewards have been credited appropriately and accurately. Members feel comfortable receiving a reward when they can clearly identify how close they are to receiving their next reward because of the level of transparency created within the system.
Long-term improvement objectives can be achieved through referrals to fitness programming in 2026, with scalable systems offering a greater opportunity for growth (versus using the manual method).
Rewarding Loyalty Beyond Transactions
Transactions alone are not the only measure of true loyalty, as the next-gen loyalty figures out that emotion plays an equal role—it is just as important to provide an opportunity for members to have an emotional connection to their membership as it is for them to engage in the transactional behavior of performing certain activities.
Members want tangible proof that they are worth more than just being members of the studio; they want to be able to share their experiences with their friends and family, which is why studios can create emotional loyalty by offering members unique experiences and celebrating milestones.
There are many different ways that studios can reward their long-term members beyond points, including:
- Giving members VIP status
- Publicly recognizing their long-term membership inside the studio
- Sending members a personal note on their birthday or anniversary
- Inviting them to members-only events
Providing members with these types of experiences helps them to understand that they belong to a caring community, and when they feel appreciated, they will organically talk to their friends and family about their experiences at the studio, which is an authentic form of creating word-of-mouth growth.
Blending emotional recognition with tangible rewards typically produces the best results. These types of programs help studios retain members and increase member advocacy far beyond what traditional promotion can accomplish.
Also Read: From Gym to Community: Turning Members into a Loyal Tribe.
How Next-Gen Loyalty Drives Sustainable Growth
When implemented properly, next-gen loyalty becomes a growth engine that retains active participation by current members while transforming them into brand ambassadors. By decreasing the amount spent on paid media, this strategy also increases the lifetime value of a member.
Additionally, studios that utilize modern loyalty systems will have access to greater insights and knowledge. Tracking event attendance provides studios with valuable information regarding their members’ motivations to participate and where those motivations and levels of engagement decline. This information allows studios the opportunity to enhance their service offerings and introduce new boutique fitness rewards that will resonate with their members.
Loyalty programs transition into a culture over time. Members actively participate, compete with one another, and collectively celebrate their accomplishments in classes as part of the loyalty program. Building such an environment is challenging for competitors to easily duplicate and thus provides an important source of competitive advantage.
Conclusion
The transition from traditional static rewards to a more interactive method of rewarding patrons for referring new customers and giving them bonuses for doing business with you is referred to as next-gen loyalty. It enables you as a studio owner to rethink how to design your referral program and reward system and build a sense of excitement, personal connection, and motivation for patrons to be part of your studio.
The four main components of building long-term loyalty are earned points, gamification, smart technology, and emotional acknowledgment.
Your studio will be at an advantage in the future by providing your patrons with a sense of fun and connection to your studio, and helping them develop a long-term relationship with your studio.
FAQ
Is it important for small studios to have a loyalty program?
Definitely, loyalty programs can help small studios tremendously through the value of recognition and consistency, which enhance community and therefore retention.
What is the best way to refer someone to become a true member?
You should reward the referrer only after the new person pays and becomes a member. This is the best way to ensure quality introductions vs. one-time free trials.
Will a points system be confusing to your members?
A simple and clear explanation of your point system will provide clarity and understanding. Focus on no more than 3 or 4 ways to earn points; also, show people their progress when they earn points.
What are the lowest-cost rewards to offer?
The most cost-effective rewards given out would be guest passes, recognition, and promotional items. All three rewards to guests are very low in cost to the studio but very high in perceived value to the member or guest receiving them.
When should you be promoting your loyalty program?
The program should be constantly promoted. Regular reminders, celebrations, and staff involvement will help keep the level of participation high.