Discount & Referral Strategies: Using Incentives to Sell Out Your Race
Selling out your race can be hard. And when registrations fail to pick up you may feel like you want to panic.
Well, don't - almost every situation, however bad and however late, can be turned around with a little creativity and marketing savvy.
In the rest of this article, we’ll show you how to implement a number of proven discount and referral strategies (with some old-fashioned value-adding tactics thrown in) to get even the most reluctant of racers reaching for the sign-up button.
So, without further ado...
Discounts vs. Referrals: which is right for your race?
When it comes to it, discounts and referrals are closely related. Both use incentives to get people to either sign up themselves or encourage others to do so.
However, the way discount and referral strategies create these incentives can be very different. And their effect on registration numbers, your race’s brand image and participant perceptions can vary.
Ultimately, whether a discount or a referral strategy is better suited for your purposes is down to what strategy you pick and how you implement it. But, generally, if you still have some time to go till race day, you should start with referrals. Only if you've tried everything else you should look at discounts.
Why do we say that?
Discounts create expectations that are difficult to shift. In some cases, they conflict with other marketing structures, such as early-bird registrations. When you have to discount, it's not ideal. So try other things first.
That said, if you want to try some discounting strategies, here's your options.
Discounting strategies are pretty WYSIWYG: what you see is what you get. They're not particularly subtle, but they can still be effective at the right time and under the right circumstances.
How they work
Discounts work best when your target audience is price-sensitive, that is to say, responds well to reductions in price. Particularly if these reductions are short-lived and there's a bit of FOMO (=fear of missing out) involved.
Setting your discount
When deciding on a suitable discount, you’re trying to maximise your headline discount whilst minimising the impact on your event economics. The discount should be high enough to grab the attention of potential participants, without risking throwing your race budget off balance (and it should never be so high that it exceeds your costs).
How you word your discount is important. Are you offering a fixed-price or percentage discount on the headline entry price?
Research seems to indicate that for lower-priced items, e.g. prices in the sub-$100 range, percentage discounts perform better. For higher-ticket entries, e.g. in the $100+ region, fixed-price discounts may actually be better received.
This seems to have to do with how numbers are instinctively perceived: 20% sounds better than $15 because 20 sounds higher than 15, regardless of the fact that one is dollars and the other is percentages. So $100 (the level for which fixed-price and percentage discounts sound similar; $X discount is the same as X% discount) seems to be the level across which the appeal of fixed-price and percentage discounts changes.
So, if your entry fee is above $100, express your discount in dollars. If it's below, go with a percentage.
Promoting your discount
It’s important to decide if you’ll be offering a “blanket discount”, that will be available to everyone, or a targeted discount that will only be available to certain groups, such as nonprofits working with the race or corporate teams. This will largely impact how you set up and promote the discount.
If it’s a blanket discount, you can simply adjust prices on your website and your registration platform. You can set it so that the discount is automatically applied at checkout and expires at the end of the discount period. Everyone registering within that period will receive the same discount.
If it’s a targeted discount, you should market it directly and exclusively to your target audience. For this, you will need to use a discount code your target recipients can use at registration to have the discount applied to the headline price at checkout.
By setting up distinct coupon codes and distributing them to different target groups (e.g. if you’re sharing a discount code with a specific audience through a PPC campaign on Facebook), you can gain a better understanding of the effectiveness of your discount with different target audiences. This will help fine-tune future discount campaigns for maximum impact.
When you should discount
Most races actually raise the price as the race draws near to encourage early registration. So slashing prices late in the day - particularly through blanket discounts - can send the wrong message about your race.
If you’re trying to offer an early registration discount, go down the tried and tested route of tiered pricing (also known as early-bird pricing). If you’re thinking of discounting later in the registration process, do so as a last resort and only if:
- You have exhausted all other marketing options and believe that a good part of your audience will react positively to a price reduction
- You aim to make money from other aspects of the race (e.g. merchandise, concessions, sponsorship) that will benefit from having more people participate
- You can offer a discount that is lower than your current price, but not low enough so as to risk upsetting people who registered early in hope of a better price or in an effort to support your race
Pros and cons of discount strategies
As we already saw, discounting can be a bit of a high-risk strategy and the advantages and disadvantages of pursuing it will largely depend on timing and execution.
Pros of discounting:
- Everyone loves a bargain. It’s likely that a discount could offer participants who were undecided about signing up for the race that little nudge they need to get them over the line.
- Money saved means more money available to spend. In some cases, the discount you offer may encourage participants to upgrade to a VIP package or spend more on merchandise and other aspects of your event from which you generate revenue.
Cons of discounting:
- It can upset people already registered for the race. You should be rewarding the early birds who registered right when the registration window opened, not penalising them as they watch others get cheaper tickets. Next year when the event comes around, they may think, “Oh, I’ll just wait for the cheap tickets to come out.”
- It can hurt your bottom line. Sure, you’re getting more participants, but at what cost? Always keep an eye on your profit margin and cash flow. There is such a thing as slashing prices too much and this can hurt more than it helps.
- Discounting your price discounts your brand. Discounting can be a red flag for those considering your race and might give the impression your race is not very desirable. You may think discounts will excite people, but in some instances they may cause people to think, “Well, no one’s signing up for that race, so why should I?”
- It can hurt your event’s social proof. People want to attend events and run races that they think others are participating in (ever heard of the herd?) They’ll sign up, because they don’t want to miss out. So discounting your ticket price may actually give off the wrong signals and mess up with your race’s social proof.
Examples of Discount Strategies
Early bird discounts
Early-bird registration and tiered-pricing strategies are fairly common. The idea is that you offer a lower registration price early in the registration process to motivate a percentage of participants to register sooner rather than later.
Tiered-pricing strategies have been shown to be very effective in creating the right types of incentives for participants and are by far the least risky discount strategy for races.
If you’re interested in implementing a tiered pricing strategy and not quite sure how to go about it, check our our complete guide to tiered pricing.
Discounts distributed through partners
Offering discounts to partners, local businesses, non-profit organisations and other stakeholders, can be a good indirect way to distribute discounts to potential participants without hurting your brand too much.
Your partner can promote the discounts as exclusive concessions they acquired as part of a sponsorship or other deal. Hence, the discount can be perceived more as a bargain than a fire sale.
Dedicated race discount sites
ribbn is a great way to distribute your race discount codes to the right audience. It is a nationwide directory of race discount codes and promo deals, offering users smart alerts so they get notified when new discount codes in their state are added to the site.
You can list your race promo code on ribbn for free. All you have to do is sign up for a free account and click to submit your discount code for listing.
In many ways, referral marketing is a very different proposition to discounting.
Yes, you are still providing monetary incentives. But rather than give those out as price reductions to people who register, you give them instead as a “reward” to people who get others to register for your race, usually at full price.
How they work
Referral marketing doesn’t send the same signals as discounting. It relies less on registration price sensitivity and more on incentivizing participants to get a little bit for themselves by registering friends.
Referral programs engage your current participants and reward them for promoting your race within their social circles. You are basically creating mini race ambassadors that can hope to secure a free or discounted entry for themselves by enrolling others to the race.
In terms of the way a typical referral program would be structured, there’s three key components to think of:
- The tracking mechanism: If you are running your program through your registration platform, you can usually provide runners with a unique link or code they can share with people. This link will track sign-ups that a specific person has referred to the race. (If your registration platform lacks this functionality, you can still use a spreadsheet to track referrals, although this won’t be as accurate or time-efficient.)
- The incentive structure: This lays out how the reward a participant will receive for referrals changes depending on the number of participants they refer to the race. So this may look something like “You get 10% off your registration price for every confirmed participant you refer to the race, capped at a maximum of 50%”.
- The reward: This is what a program participant can hope to gain by referring other people to the race. Typically this is a percentage discount on the entry price, but it can also be an item of race merchandise, some VIP or other exclusive perk or, in some cases, even a cash incentive.
Promoting your referral program
Your referral recruits may do all the leg work for your referral program, but to get them to sign up you need to do your bit first.
The first place you should publicize your referral program is your website. Make sure the incentive structure is clearly articulated and all relevant information is available through your website’s registration page - or whatever other page people may reasonably expect to find this information on.
There’s also much to do on the side of your registration provider.
Hopefully your registration platform is giving you everything you need to make your referral program a success. If there is a registration confirmation page or thank-you email being sent out to registering participants, make sure your referral program is on it. Any tools your registration platform may have to help prompt participants to refer others, make use of them.
While you might naturally want to steer towards a simple “10 signups = 1 free race entry” model, it’s better to keep the incentive structure open-ended. That way, if a participant has more people to refer, they have a reason to do so. If 10 signups suffice to secure a referrer’s free entry in the race, use a VIP pass or free T-shirt to get them to the next 10 - and so on.
When you should launch a referral program
A referral program can be launched at any point leading up to the race. Generally speaking, the earlier you have it in place, the better.
Leveraging your early-bird participants can be a great way to kickstart your referral program. More often than not, people who register early are more passionate about a race and thus more likely to want to share it with their friends and network.
Pros and cons of referral programs
On balance, setting up a well-thought-out referral program has more upside than risk. If the incentives make sense and the program is promoted effectively, the benefits are bound to follow.
Some of the more important of those include:
- Leveraging word of mouth. Word of mouth is just about the best way to market your race. Referral programs make great use of this by allowing participants to reach out to their network and local community.
- Encouraging participant engagement. Making participants part of your race promotion, helps keep them more closely involved in the race. By making them informal ambassadors for your event, you get them to own a part of your race success.
- Preserving (and to some extend enhancing) your brand. Not only will referrals not tarnish your brand, as discounting sometimes risks doing, they may actually even enhance your event by fostering a sense of community amongst participants.
- Maximum results for minimum effort. Referral programs are generally fairly easy to set up and once they are implemented they can pretty much run on autopilot. This lets you get on with other marketing initiatives as referrals get off the ground.
On the cons side of referral programs, there’s really little more than the hassle of tracking referrals, if your registration platform doesn’t provide a good, streamlined way of doing this automatically.
Even there, though, there’s a ray of sunshine: the hassle of tracking referrals manually only grows when you have more referrals to handle, so the pain doesn’t come without benefits.
Examples of referral programs
Bring a friend to earn rewards
Referring friends to a race in exchange for discounted or free entry to the race is the most common type of referral strategy. The proposition is simple: you get your friends to register through a link we send you and you earn your reward.
Tough Mudder are experts in this kind of viral marketing - and they do their best to help participants earn their reward by providing a direct form from which to email friends your registration referral link.
Multi-level referral programs
Some registration platforms help you get even more out of your network by not only crediting you the benefit of your direct referrals, but also referrals your referrals make and so on.
Whether this type of multi-level referral program increases the incentives for participants or not, it definitely makes tracking your referral stats more fun!
Team signup programs
Offering kickbacks for team signups is an interesting hybrid that can lean either towards a referral or a discount program, depending on the reward and choice of incentive structure.
In most races, “teams” will only have a symbolic meaning and participants still race pretty much for themselves. But it does help to encourage friends to register as a group and the referral benefits are shared by all members of the team (either through a VIP upgrade, team discount or exclusive giveaway).
Refer a noob
Some adventure and obstacle races will sometimes offer incentives to experienced (or repeat) participants for referring first-timers to the sport.
This is a great, fun strategy with a unique angle and a number of significant benefits:
- It helps introduce new people to the sport
- It presents a clear proposition to help first-timers to register for your race
- Positioning your race as a friendly entry race for your event type can motivate other potential event virgins to register
The practicalities of “policing” whether a referred participant really is a new-comer or not are actually irrelevant. The real magic is in the impact of the marketing message. Either way, you get your extra registration.
Other value-adding marketing strategies
When people think about what they’re signing up for when they register for a race, they are comparing the price of the ticket to the value they receive. So sometimes it makes more sense to incentivise people through an increase in the value they receive rather than a decrease in the price they have to pay for it.
In the remainder of the article, we take a quick look at a few more initiatives you can use to get participants motivated to sign up.
Additional early registration incentives
On top of offering a lower price for early registrations, you can sweeten the deal even further through additional perks.
Simple things like guaranteeing participants a start place in the same corral/wave as a running buddy can come at no cost to you and make all the difference to them.
If you organise a series of races and want to incentivise participants to enter multiple events, you can try offering a multi-race bundle.
This is a great strategy for leveraging the popularity of some of your higher-demand races to boost registrations is a newer or less-established event, or if seasonal demand for a particular race in a series you organise is weaker than at other times in the year.
Targeted flash sales...without the sales pricing
Partner up with a local sponsor to offer swag or some sort of giveaway when people register within, say, the next 72 hours (or any other limited period of time) using a predetermined promo code. Advertise the offer as much as you can to boost interest.
By actually adding perks rather than slashing prices, you’re increasing the value of your offering without discounting your brand.
Up-selling participants to bundled VIP packages
If your regular packages fail to excite, how about putting together VIP packages for a real special experience?
Up-selling people to a more expensive package when your regular packages are not selling may sound counter-intuitive. But this is again viewing things in terms of price rather than value.
A bundled offering of race entry with hotel accommodation and private car transfer - and perhaps even a local concert or fancy dinner thrown in - may actually sound a lot more appealing at the higher price point than just the race entry at the lower price point.
So try things out and don’t try to predict what may or may not work.
Randomised VIP upgrade promotions
And since you’ve already put the effort to create your VIP packages, why not tempt people with a weekly “Upgrade to VIP” promotion? One way to do this is to automatically upgrade one registrant to the VIP package each week leading up to the race.
Promotions of this type will delight your participants, keep them engaged with your event communications prior to the race and encourage prospective participants to sign up early in the hope of achieving a free upgrade.
So there you have it...
Whether it’s cutting your price, adding value or creating urgency, you have everything you need in these strategies to give your event registration a lift.