The game must go on. As with most consumer retail industries, the COVID-19 pandemic had a dramatic impact on the sporting goods category. While most organized sports remained sidelined and gyms closed for much of 2020, many people turned to exercising independently in safe and controllable environments. This caused an increased demand for products such as cardio machines, weights, running shoes, pools, bicycles, and basketball hoops - just to name a few. This is clearly seen in consumer eCommerce behaviors, as between January 1, 2020 and March 11, 2020 online orders for fitness equipment saw a boost of 55%.
When it comes to sporting good brands utilizing Talkable in 2020, we saw a dramatic influx in sales and revenue. While it is common for fitness equipment to spike leading up to the end of the year, these brands saw YOY gains of 247%, 111%, and 94% in the months of October, November, and December 2020. Beyond sport and fitness brands, we’ve also seen consistent growth among our clients in the health and wellness industries. The pandemic sparked boosts in health supplements, protein powders, and more, along with more traditional fitness gear such as water bottles and athleisure clothing. While these are compelling figures, they are not fully representative of how other sporting goods (and related) businesses fared during the pandemic.
Unfortunately, COVID hit some sporting goods retailers harder than others, especially those that relied primarily on in-person sales. According to the Chicago Tribune, Dick’s Sporting Goods was forced to close all of its stores on March 19, but has begun reopening some stores as COVID infections dropped to a manageable rate. Key determining factors for the success of sporting goods stores were their areas of focus and their ability to leverage online sales.
In this article we will discuss how referral marketing for sporting goods and fitness brands can increase the efficiency of customer acquisition, improve customer retention, and keep sports businesses thriving for years to come.
A common approach to customer acquisition amongst sporting goods stores is the use of affiliate programs. While affiliate programs differ amongst each company using them, they typically agree to pay affiliates (those who independently promote or market products on behalf of the company) a commission for any online sales that they are responsible for driving. While affiliate programs are highly scalable they may lack certain elements that can result in long-term customer retention and loyalty. This is where referral marketing may be able to make a significant impact.
Referral marketing is often referred to as a refer-a-friend program. In short, it is a marketing and customer acquisition strategy that encourages existing customers to make product or service recommendations in a way that is incentivized for all parties involved. For instance, if a person is in a referral program and they recommend a pair of yoga pants that they love to a friend, that friend would be incentivized to purchase the pants through a special referral offer (typically a percentage-off or cash discount), and the referrer also known as the advocate, would also receive a predetermined reward such as a discount to the store. This is a deal that everyone will feel good about, including the business providing the discounts - as they now have a new customer who now has a personal connection to the brand.
Referral marketing is ideal for businesses that have many happy customers, want to promote and encourage brand evangelism, build trust, and prioritize long-term profits over short-term boosts. For more differences between referral marketing and affiliate marketing see our previous blog post.
The sporting goods and fitness industries are prime candidates for excelling with a strategic referral marketing program. Here’s why:
The most straightforward and simple approach to providing referral incentives for sport and fitness referral programs is likely a standard discount for shopping at a given store. This could be in the form of a dollar amount (for example, $10 off any product, or $25 any order over $100). Depending on the business model, an incentive could be a coupon for a specific percentage off on their first purchase. As a reward for successfully referring a new customer, the referrer would receive a referral code to use for themselves, or to share with friends and can earn more with more referrals.
One of our great clients, Alo Moves, offers thousands of classes for body, mind, and spirit. Their offer, for example, allows referrers to send a 30-day trial of Alo Moves to their friends in exchange for $25 to spend on their branded yoga gear (Alo Yoga) for every friend who signs up.
Special programs could easily be implemented for sport and fitness referral programs around specific sport or cultural moments. For instance, special promotions before the start of a sport season (this would be ideal for shops focusing on a single sport niche), New Years promotions for stores carrying exercise equipment and workout gear, or even offseason promotions focused on training. These programs could offer bigger bonuses than standard referral rewards, or be focused on providing steep discounts for a specific product (or collection of products) that is applicable to the moment.
Along with bringing in new customers for sporting goods and fitness retailers, referral marketing can be an excellent vehicle for generating repeat business and additional engagement opportunities. First, the referral program offers incentives to both shop, and spread the word about the store. This adds a positive layer to the customer experience and gives them reason to continue doing business with a specific store. Secondly, the acquisition of a new customer allows the business to develop a relationship with them over time with timely or personalized content. Through segmented email outreach, a sporting goods or fitness program can use seasonally relevant messaging around specific sports and activities, as well as providing time-sensitive referral bonuses to spark engagement and capitalize on the excitement around sport involvement and fitness activities.
No matter what type of sport or fitness activity a business focuses on, driving online sales and a combination of in-person and online service will be key to their success for years to come. By putting less pressure on in-person foot traffic and more resources into driving customer acquisition on their site and improving complementary tech offerings, sporting goods retailers can and will continue to thrive. Referral marketing can be a powerful mechanism to ensure a steady flow of new customers and ongoing revenue, all while maintaining brand integrity and rewarding their most loyal advocates.
Need help getting started? Reach out to us to schedule a free demo with our marketing specialists to see how Talkable can help your brand grow.