Tuesday, March 17, 2009

Effectively Marketing your Franchise

Attracting customers is a little easier when owning a franchise as a business thanks to marketing materials and brand awareness that head office often has already established. This competitive advantage also saves owners time and money on marketing, but it doesn’t mean that marketing ends with head office initiatives. The wise franchisee will go beyond head office marketing materials and campaigns to expand their local customer base and increase their chances of success.

What head office offers
A franchise head office will usually develop a number of high quality marketing materials for brand identity, including the corporate logo, store design, company website, ad layouts, and point-of-sale materials. To develop marketing materials and campaigns, franchise owners are typically required to contribute two per cent of their gross projected revenue to head office as part of an “advertising fund”. In return, marketing materials may be offered at a fraction of the cost to each store. By contrast, independent businesses have creative freedom to create their own marketing materials, but they absorb the entire development cost and don’t always end up with high quality or effective tools.

A franchise head office may also have created brand awareness within the target market. Brand awareness is like “warming the door” so that when customers are approached with a promotion, they already know how the franchise can benefit them. An independent store might skip developing their brand and jump straight into offer-based advertising, such as a product discount. Skipping over brand awareness can result in missed opportunities to help new customers identify with the store and learn how the store can meet their needs.

Numbers count: Supplement head office marketing

Marketing a franchise effectively means doing more than just contributing to head office’s advertising fund: the two per cent required payment may only go towards a seasonal campaign, but a franchise typically requires customers over the entire year. Industry standards recommend that an established franchise with a good track record increase it’s marketing budget to at least five per cent of the gross projected revenue, and a new business with limited awareness should budget 20 per cent to fund additional marketing efforts.

Individual marketing efforts can dovetail with head office initiatives. One example is a franchise owner taking a brand campaign that head office is advertising on billboards and applying the same image and message in a direct mail flyer or community newsletter advertisement. The idea is to increase the amount of times potential customers consistently see and hear the message to move them to action.

Franchise owners will benefit from knowing what head office’s plan is for marketing and then supplement those initiatives with their own. Creating an annual plan empowers franchise owners by ensuring that critical selling seasons aren’t missed.

Localize franchise marketing

While owning a franchise usually means having a corporate brand and materials readily available, basic marketing principles still apply, including the importance of knowing and reaching the local market which is critical for success.

Franchise owners need to ask the same questions that an independent business asks: who are my customers? Where do they live and what do they like to do? What other business are they likely to frequent and what media are they regularly exposed to? How are they likely to find my business – through the Yellow pages, a friend, driving by the store, seeing community newsletter advertisements, or searching the Internet? Profiling local customers helps determine how to effectively market to them.

Trying new marketing initiatives tailored to local customers also helps to ensure success. For example, a franchise dog grooming owner could visit a dog park and hand out dog treats with franchise information to dog owners. That same franchise owner could partner with a complimentary service or company, such as a pet store, to provide a preferred rate to the store’s customers, resulting in a win-win situation for both businesses. Another idea may be for the franchise owner to sponsor a fundraiser for the local Humane Society.

The Internet is another forum for localizing marketing efforts. The “world wide web” can be reigned in through search engines which many customers use to research products and services. Google Ad Words can put a business front and centre in a local market. Additionally, Google can place advertisements on well-known websites that only appear to viewers in the local market. Placing advertisements on related websites, such as a local car dealership promotion on a car enthusiast website, is another way to target customers.

Consistency pays off

Attracting new customers is important, but keeping existing customers happy is vital. Existing customers influence new customers through word-of-mouth referrals, so consistency in the customer experience is crucial. For example, if a spa offers herbal tea and fresh fruit, they need to always do this, regardless of how busy they are. Customers feel let down when there is a deviation in their experience and can communicate this to potential customers or decide to abandon the business themselves.

Consistency in marketing is also important, including times of trying out new and different initiatives. New initiatives need time to grow and be used frequently. A potential customer may be exposed to a marketing message five times but be too busy and forget the message or tune it out. However, it may be the sixth time that that potential customer receives the message and decides to become a new customer.

Calculating marketing’s worth

Finally, tracking marketing efforts determines which marketing initiatives attract new customers. Marketing is an investment that takes time and can have a delayed, but lasting, effect. This means that marketing initiatives and their costs won’t necessarily correlate with monthly or direct sales. The math doesn’t add up – the amount of a sale doesn’t equal the value of a new customer. Calculate the long term worth of a customer, and the investment in marketing can be exponential.

Sharole is President of Glow Marketing, Western Canada’s leading marketing consultancy specializing in marketing to Moms. Glow Marketing is currently working with franchises such as Beaners Fun Cuts for Kids, Marble Slab Creamery and Milkface Nursingwear.


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