The single most important factor in the site selection process is not finding the right real estate – it’s finding the right customers.
Today’s retail landscape is littered with failed concepts that believed if they built it, customers would come.
The second most important factor in the site selection process is to remember the first.
If there aren’t enough customers to generate the revenue needed to pay the bills, a stellar location – regardless of access and visibility – will fail.
Don’t misunderstand me, I’m not saying that real estate won’t impact store performance. It absolutely will – but only if you have enough customers willing to walk into your store or restaurant in the first place.
For franchisors, failed locations can be extremely damaging as they hurt the reputation of the brand and send bad signals to potential franchisees.
So how do franchisors maximize their franchise territory development and avoid the number one pitfall of letting a franchisee open an unsuccessful location?
Find Your Customers
In this day and age, customer data and analytic insights are essential for franchisors.
With customer insights, it becomes possible to develop a customized profile that identifies your best customers, shows you where they live and where to find other potential customers just like them.
By utilizing that customer profile, a predictive model can be built to pinpoint trade areas with significant clusters of your best customers, showing you exactly how many core customers live in a specific trade area and quantifying the value of each customer in terms of dollars.
By predicting what each household will be worth to the store or restaurant, the model can actually forecast the top-line revenue that the location will generate – which allows franchisors to quickly analyze the quality of any location under consideration.
This gives you a good idea of where to open a new franchise unit – and just as importantly, where not to open one.
But beyond identifying the top potential markets and site locations for a new franchise location, the franchise customer profile shows you how many franchises to sell in a territory and how to improve local marketing campaigns for franchisees.
The Bottom Line
As franchisors are faced with the challenges of a progressively crowded marketplace, customer analytics can help your brand stand out.
A sharper perspective on your core customers can be used not only for real estate site location strategies, but also for targeted marketing, promotions and other elements of the overall brand concept.
Every company is unique, every customer is unique and every situation is unique. Buxton’s Franchise Growth Solution, tailored specifically for your concept, uses the power of data and analytics to quantify your true potential. There’s no substitute for a solution that enables you to profile your best customers, find more just like them, and open up homerun locations every time.
Talk to us today about how our Franchise Growth Solution can help you find your perfect locations.