Your #1 salesperson isn’t even a diver – yet. That’s because, in the dive industry, word-of-mouth marketing is still the number one way dive shops gain new customers. Students enrolled in your Open Water Diver course are likely the best source of customers for in the coming weeks and months.
Studies have shown, recommendations from a friend or family member are 50 times more likely to trigger a purchase compared to a paid ad. The authentic conversations between a new diver and their friends, family and co-workers are better than any Instagram story or Facebook post you could create. According to research by Gartner, “Nothing accelerates a purchase decision faster than a word-of-mouth endorsement from a peer whose only agenda is to help.”
If your referral business isn’t as strong as you’d like it to be, here’s an important stat: 83 percent of people surveyed said they are comfortable making a referral, but only 29 percent have done so. Motivate your customers to make that personal recommendation with a double-sided referral.
What is a double-sided referral?
In the past 10 years, successful companies such as Airbnb, Dropbox, PayPal, Stitchfix, Uber and others leveraged double-sided referrals to achieve astronomical growth. A double-sided referral includes something for the current customer and something for the new diver.
For example, if I refer a friend to get PADI® Open Water Diver certified:
- The friend receives a $50 credit towards the Open Water Diver class or equipment purchase and free rental gear for one weekend (total value $100 US).
- I receive $50 US store credit towards additional dive training or any regularly-priced scuba equipment.
A double-sided referral makes it easy for current customers to start the conversation with friends. It also allows current customers to feel they’re doing their friends a favor rather than selling them something.
Stop Giving Money to Groupon and Google
When you offer a referral incentive such as $50 US discount off the retail price of equipment, that isn’t the same as giving away $50 US cash to Google or Groupon. Also, research by the American Marketing Association (AMA) found, “referral marketing generates customers who have higher lifetime values, are more loyal and contribute higher margins per year than other customers.”
Referral marketing also allows you to control costs. As an increasing number of dive centers and resorts advertise on Facebook, Instagram and Google, the price for those digital ads rises. Online ad costs are currently increasing five times faster than inflation. Furthermore, only one-third of consumers trust online ads, but 92 percent trust recommendations from people they know. So why are you giving away your hard-earned money to Google, Facebook, and their ilk?
Jumpstart Your Referral Marketing Program
Visit the PADI Pros’ Site to download referral marketing materials in English, French, Portuguese and Spanish. Use them to promote your referral program on your website social media, eNewsletter, etc. You can also customize the material with your logo and special offer, and/or print postcards and flyers to include with student Crew-Paks.
Avoid These Referral Marketing Mistakes
Small incentives such as $10 US off or free air fills aren’t enough
Your incentive should be valued at $100 US or more for the new diver, and at least $50 US for the current customer. Remember, the incentive doesn’t have to be $100 cash, it could be a voucher for free weekend rental gear ($50 value) and $50 off class tuition, or soft goods purchase.
Keep it simple
Create a referral program that’s simple enough to describe in about 50 words. Don’t require customers to refer multiple people or restrict the incentive to certain classes or equipment, etc. It will deter participation and make it difficult for your staff to track.
Consider the fine print
If you’re concerned too many people will take advantage of the program, consider starting it just prior to your slow season and/or making it a limited time offer. Studies show people are the most likely to refer friends within the first 30-45 days. If you create free weekend rental vouchers, consider adding fine print such as an expiration date and adding the words “no cash value.”
For more ideas or assistance creating a referral program, contact your PADI Regional Manager or Regional Training Consultant. Learn more about how to supercharge your word of mouth marketing and read about ways to use PADI’s referral marketing materials on the PADI Pros blog.
