Monday, May 4, 2009

Can You Force Word-of-Mouth?

fitness-first.jpgThis week I want to take a little bit of a different approach with a marketing issue. Instead of telling you about an issue then offering my two, or maybe 10, cents worth, I want it to take a bit of a group case study shape. Hopefully it is a post that all you “lurkers” who read the blog but don’t comment will feel you can contribute as well.

The other week I walked into my Fitness First gym (what? you couldn’t tell I work out?) and could see it coming a mile off. Fitness First’s sales approach is known around the place as being pretty strict and I have heard of sales staff not being allowed to go home until they had made their quota of sales bookings (I am not even sure this is true but that is what someone told me) as well as them making it as difficult as possible for people to cease being a member. For the record, I am very happy as a Fitness First member.

What confronted me as I made my way to the change room was 3 of the sales staff and a small display. You know the feeling you get when you are at the shops and that annoying credit card bloke tries to catch your eye? Same feeling here. I just prayed they wouldn’t say something to me. But resistance is futile … you know you can be 10 meters away and they will call out to you.

As I tried to get past they asked me if I had any friends who would be interested in joining the gym. I kind of feel sorry for the situation the company puts them in (with unimaginative ways of finding leads) and so I didn’t want to just say “No” and keep walking. So I offered something like “I don’t have any friends who would be interested thanks”. But that didn’t appease them.

“What about work colleagues?” they pressed. “Just give us their names and numbers and we will get in touch with them and if word of mouththey join you will get $5 a month of you membership”. I mumbled something dismissive and kept walking.

Ok, so now comes the hard bit. I really want to tell you exactly what I think of this approach, its chances of success and what I would do if I was in their situation and was looking to generate new leads. But instead I want all you smart readers to tell me what you think and contribute to a group case study.

Do you think Fitness First’s approach to generating word-of-mouth is a good one?

Would you offer up the names and numbers of your friends and work colleagues for a cheaper gym membership (or discount of any product for that matter)?

How would you change or improve this approach?

I will follow your comments and contribute my thinking as well. Who knows, we may come up with a win-win where Fitness First get some new ideas for generating leads, or harnessing word-of-mouth, and gym members won’t feel uncomfortable when all they want to do is get in, get change and get started on their workout.

Over to you … I am looking forward to hearing what you think.

13 comments:

Nathan Bush said...

OK Oyster - I was actually having a bitch about this one the other day. I left Fitness First about a year ago because I couldn't stand their sales and impersonal approach. I went down the road to a local gym and they started taking the exact same sales approach. Arrgh! Maybe it's something embedded in the gym culture now. But I like your questions so here goes...

1. No. Not positive word of mouth anyway. There may be a lot of negative word of mouth "can't believe those f*ckers keep calling me. you give them my number again and I'll pee in your shower".

2. I have before but they weren't serious. I gave them the numbers of people who I knew were no chance of joining and used it to further enhance our own personal joke of them being lazy and/or chubbie martins.

3. I believe real word of mouth is consumer to consumer. WOM isn't not business to consumer - that's sales. FF and others using thiks approach need to put the power back in the hands of consumers. For example, the DM piece from Foxtel you described in an earlier post gave the consumers all the ammunition and tools to get out there and sign a friend for mutual benefit. Not only will this be more believable but also saves on your labor costs.

OR, the other option is to have an exceptional product with exceptional service that people want to tell everyone about naturally with no forced incentives - that's real word of mouth.

Hayley_Gleeson said...

I am also (regrettably) a member of FF and I'm not a fan of their culture or marketing/sales strategies. Basically I joined because I can use their large network network of gyms, wherever I happen to be (whether I actually do this is another story!)

Like you, I feel sorry for the poor dudes slinking around trying to sign up new members. Especially when people are spending less on gym memberships in recent times.

I can see that their $5 off membership for joining a friend offer would likely generate success for them, or perhaps they wouldn't be running it again (they've run the promotion several times before).

BUT, and I might be ruffling some feathers a little bit, I'd say it's more successful with their male customers, who are less inclined to consider the impacts signing their friends up would have. e.g. Male: 'SWEET, $5 off!' --end of thinking process--

A female will (in general) assess the whole scene before diving in for her discount, e.g. Female: 'oh gee whiz, I don't know if Betty would appreciate being phone harassed by Fitness First, and what if Susie gets offended that I didn't put her name down, and gosh, will Patty take offence to me recommending she join a gym?' And so I think that for this reason (and a few others) it might attract more male responses than female.

A better strategy for Fitness First to consider would be to offer a choice of rewards for those referring friends to their business. A combination of tangible goods or discounts would be ideal; this would immediately engage the member in the promotion - they'd 'choose' their reward before considering whether or not they'd participate. They're instantly involved.

But as far as generating word of mouth goes - I can't see that they're doing it. Why not randomly reward members for their loyalty, or for their attendance record (with a gift or discount) and they'll be so pleasantly surprised that they'll tell 3 friends. And if they're female, they'll tell 15. On a Friday - they'll go out that night on a high at having be rewarded with a free 6-month contract extension and hallelujah: Fitness First are the good guys again...sort of.

Check out Virgin Active Health Clubs - http://www.virginactive.com.au/ - they are actually setting out to build relationships with their members/non-members: something I see as a wiser strategy than screaming at them across the gym reception about signing up friends...

poptrashmusic said...

Hi Oyster,

I am also a fitness first member. Personally, I don't like the whole pressure of 'recommend a friend'. I would only give a friend/colleagues name if I had previously cleared with friend/colleague.

I just think it's a necessary evil, times are tough and you have to do business anyway you can.

Then again I have no issue with saying 'no' when somebody p*sses me off.

James Duthie said...

I'm also a FF member and dread the walk of shame when I see the sales staff on the floor. Funny how us marketers hate the sight of each other...

Anyway, there's no question they could do it better. I'd never sell my mates contact details for $5. People have done it to me and I have eternally hated them for it! I suspect others feel the same. And seriously... what could their conversion ratio be?!?

On the other hand, it's never been easier to generate WOM with the emergence of tools such as Twitter. Of course, generating voluntary referrals requires an understanding of how to use the tools effectively. Sorry to link drop, but I wrote a whole post on using Twitter to generate positive WOM:

http://onlinemarketingbanter.com/how-to-market-not-whore-in-twitter/

My guess is that FF have a combination of old school marketing managers and green graduates in their department. The manager lacks the savvy and the graudate lacks the authority to actually use the social tools. So they stick with what they've done in the past (whether or not it works). And as a result, we're left to deal with pushy sales staff... ugh!

Hayley_Gleeson said...

Just quietly, this Choice review on gyms will more effectively a initiate word of mouth effect than Fitness First's own promotions! Below is an excerpt from the article, http://www.choice.com.au/viewArticle.aspx?id=106842&catId=100563&tid=100008&p=1&title=Unfair+gym+contracts - which bluntly comments on the pushy sales team at Fitness First:

"Of the two Fitness First gyms visited by our shadow shoppers, one in particular stood out for the salesperson’s intensity. “He couldn’t believe I didn’t want to sign,” reported one of our shoppers. “When I said I needed to speak with my husband, he said, ‘I thought you said he was supportive of you being here’. He said it was only $35 today and if I go it may not be available when I call back.”

Our second shadow shopper said: “He just kept asking me what the problem was.” At two of the four visits to Fitness First outlets, our shadow shoppers reported difficulty in ending the consultation – something they did not experience at any of the other gyms."

Maybe more damage than good being done? seemed relevant ;)

Matt Moore said...

FF's "cash for names" approach is based on the notion that you want your acquaintances training in the same gym as you. I think this assumption is frequently false. Lots of people do not want to bump into their acquaintances when they are red-faced and covered in sweat.

As FF have lots of gyms the solution is simple.

You sign up your acquaintances BUT they will be approached by a DIFFERENT FF gym (with a discount). That way you can guarantee your friends will not see you fall off a stairmaster because they are doing their own stairmaster falling somewhere else.

Everyone is a winner.

Obviously this means FF gyms effectively cross-promoting each other, which won't work if they have no incentive scheme behind the scenes to support that (which would come as no surprise given the care shown to long-term sales management shown elsewhere in their operation).

Daniel Oyston said...

Hi Guys, thanks heaps for all the detailed comments - there are some great ideas and some excellent observations.

Please keep them coming as I intend to pull together all your thoughts and also add mine ...

Zac Martin said...

The only important observation here is that Hayley has friends called Betty, Susie and Patty. How old are you?

Rowan Wilde said...

The FF campaign doesn't work for me for two reasons.

1. It's a pyramid sales program.

What? A pyramid sales scheme? Surely not - yep, totally is.

If my monthly is $30 for example, and I get six mates to join, and I get $5 off per friend, I'm now going to the gym for free, and then they get six mates each and so on.

2. The other major problem I have with 'recommending a friend' with FF is that my friend doesn't get a deal. There's no incentive for them to join so the question begs – is this a database building or genuine sales building campaign? And really, what are the chances of me being rewarded in exchange for emptying the contacts list of my iphone into their computer? Low at best I reckon.

Generally you want to feel good to inspire good word of mouth. But this isn't helping a friend, this is helping the company. This doesn't make me feel good, it makes me feel dirty.

You'd only recommend people to FF on this basis for selfish reasons. i.e. I want $5 off my membership.

I'm in a different industry entirely but we face similar issues regarding new members etc. Where I work, I've built and outlayed a budget for friend-get-friend programs and then split the reward between the referer and the referee. Both parties get something from the experience and the referer knows there is a higher chance of being rewarded because the people they've told us about are rewarded for joining.

It works well and retention rates are extremely high.

Tracey said...

Yeah, the $5 off for me just isn't enough incentive.What does 5 bucks buy these days... a roll of loo paper? The only thing that would get me in is if by giving up a friend's name, they were getting something in return. Surely they make their money on the monthly fees more than the initial membership sign-up, so offer to sign the friend up for free and I'll phone my friends on the spot to see if they're interested. Basically, the carrot here is too much like a shrivelled wiener and needs to be more like a fat, gourmet snag...

Daniel Oyston said...

@Tracey, I like the analogy of the sausages ... it made me laugh out loud :)

@everyone else, great comments, thanks heaps. I will let you know how they were received (if I get a response).

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