According to the International Franchise Association Educational Foundation, franchise businesses are expected to grow faster and create more jobs than the rest of the economy in 2014.
In order to capitalize on the franchise sectors continued boom and maximize their franchise territory development, franchisors must avoid the number one classic pitfall: letting a franchisee open an unsuccessful location.
Where you open a new site location becomes the factor that can either make or break your brand in a market.
And as a franchisor, you obviously have a vested interest in helping your franchisees succeed – so how do you find a great location every time?
The answer is simple: ignore the old axiom of “location, location, location,” and instead replace it with “customer, customer, customer.”
Customer, Customer, Customer
Customer analytic insights are essential for franchisors, as it becomes possible to develop a customized profile that identifies your best customers, shows you where they live and helps you find other potential customers like them.
Through utilizing that customer profile, a predictive model will then be built which will allow for targeted expansion by pinpointing trade areas with significant clusters of your core customers
This model shows you exactly how many core customers live in a specific trade area in a specific market and quantifies 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 more than just 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 increasingly faced with daunting challenges in a progressively crowded marketplace, customer analytics can help your brand stand out. A sharper perspective of your core customer can be used not only to drive real estate site location strategies, but for targeted marketing, promotions and other elements of the overall brand concept.