Welcome to the franchisors’ paradox: overly aggressive growth has killed many brands, yet franchise businesses are growing faster and creating more jobs than the rest of the economy.
In a market where the old adage “if you build it, they will come” is far from reality, how do you maximize franchise territory development, maintain a brand-wide personality and decide whether to adjust for regional preferences?
The following checklist outlines 4 key strategies that play a significant part in ensuring growth and determining the success of your growth plans.
- Establish Corporate Leadership Through Market Knowledge Franchisors understand their home turf better than anyone. But, do they know the next town over? Or the next state over? Wherever your stores are, you must know how your local customers differ in each individual market. Once you know your customer mix across markets and trade areas, you can take swift and decisive action regarding growth and discover how big your brand can really get.
- Know Brand Perception From Market to Market A franchised gym in the Midwest, for instance, will have different member goals, routines and needs than a gym in the Southeast. All franchisors know that the perception of their brand differs from market to market, but how many of them actually have a firm grasp on it? With customer data, franchisors will have the necessary insight to better tailor their offerings from region to region – whether that’s menu items, sales and couponing, or targeted marketing campaigns.
- Let Data Drive Your Growth “How many stores can I open in a given market?” This is one of the most frustrating questions for many franchisors. If you sell too many locations in a particular market, you run the risk of over saturating the market, resulting in poor performance. On the other hand, if you don’t sell enough locations, your franchise could leave money on the table. Data-driven solutions offer analyses without bias so that franchise leadership can make more strategic, yet objective decisions through an understanding of customer growth and timing.
- Don’t Neglect Your Franchisees While franchisors do provide some support to their franchisees when it comes to selecting retail locations, the quality of that support varies widely from company to company. Some franchisors will only provide basic demographic/population density information and stress the importance of store visibility, while others will supply more detailed information such as what the optimum tenant mix around the store should look like. However, the most successful franchisors will help their franchisees pick the best possible sites and optimize their markets while minimizing cannibalization by making objective, data-driven decisions with customer analytics.
The bottom line is that in a crowded, competitive environment, it’s more important than ever for franchisors, both large and small, to have a keen understanding of their customers and a precise definition of their market position in order to optimize franchise territories and stand out from the crowd.
To learn more about the 4 critical steps you need to take to put customer analytics at the center of your franchise growth strategy, download Buxton’s latest report: Customer Analytics for the World of Franchise – 4 Things You Should Be Doing Today.