This article appeared in Issue 3#5 (July/August 2009) of Business Franchise Australia & New Zealand
When franchisees buy into a business, they are buying more than the name of the franchise brand. Jess Logan speaks about the importance of the franchisee taking responsibility for building their own brands and what they can do to improve their own fortunes.
Franchising can offer a lucrative business model, with systems, support and marketing initiatives that gives the franchisee a much bigger leg up into the business world than if they were to go it alone.
You would assume that with this level of ready-made leverage, the franchisee could focus their concentration on increasing customer numbers and ramping up revenue. However, franchising is like any other business; if you fail to understand the culture of the company and what the brand stands for, you are doomed to mediocrity or even failure.
No matter whether you are Steve Jobs or Richard Branson, business will always experience a downturn if the model as a whole – including franchisees – isn’t working in concord.
That’s why many franchisees fail to maximise their full earning potential. They rely too heavily on company systems and support, without looking at the holistic nature of the business.
Before a franchisee takes on any business, it is vital they understand why the company exists, what sets this company apart from its rivals and what their consumers are truly expecting their brand to deliver.
It is important to use the systems and support networks, but only in terms of how these can help you live up to the brand name while maximising profits. And you must understand that even though the brand name may be big enough to bring customers through the door, it is how you run the business that will dictate their experience with the brand and whether they come back to the fold.
The experience of a lifetime
Branding is all about the customer’s experience. It is a collective vision that tailors entire business models to meet consumer demands and achieve outstanding revenue results.
So no matter whether you are Apple or Virgin, if the customer experience at franchise level is a bad one, it reflects on the entire company, not just the store.
Terrible brands are created by awful experiences. Loss of credibility can be caused by something as simple as a consumer being served by a down-on-her-luck teenager, recently dumped by her boyfriend who is full of attitude and wants the Facebook world to know all about it.
Good attitude attributes to success; bad attitudes decrease revenue. The wrong attitude is guaranteed to lose customers and create a whirlwind of destructive rumours. In fact a poor report often spreads more quickly than a favourable one. If the company is really unlucky, the customer – inspired by the teenager – will post a Facebook comment of their own and let their 1,000-plus network know how terrible the brand experience was.
And it’s not just about staff members and their delivery. It’s an unwillingness to refund a product. It’s when a manager closes a door at 5.29pm despite the fact that Mrs Jones has driven 30 minutes to get to a store that closes at 5.30pm.
It only takes an errant mistake or a staff member’s misguided behaviour (in the eye of the customer) to bring down the reputation of a store and subsequently the brand.
So how do you let the customers know how much you care?
The first step is to know what your brand stands for; what its sole purpose is, and what truly sets your brand apart in the eyes of the market.
The second step is to treat your customer with respect and give them the service they desire under the guise of your brand. By doing this, you will not only begin to fuel customer loyalty, but the entire brand will profit from your goodwill and understanding of your markets needs.
Consumer loyalty is what drives the core business’ growth. Think about it. Let’s say the average loyal customer spends $10,000 per year over the course of five years. That’s $50,000 supplied by just one individual person. If you can attract only another 20 loyal customers per year over that five year period, your business has suddenly reached a million dollar turnover. And imagine the potential if each of those loyal consumers spread the word to another 20 people over the course of each year!
Use your leverage
Franchisees should think of themselves as experience representatives, rather than business owners and offer up experiences that meet and exceed the requirements and expectations of their customers.
Recently, BrandsRPeople2 took on the rebranding for kitchenware company Matchbox. Director David Cohen wanted the stores to be recognised as a complete kitchen, dining and entertainment solutions company, rather than the giftware specialists they were perceived to be by the market.
Matchbox’s goal is to not only increase its number of franchises across the country, but to offer the customer an experience that is yet to be tapped into by anyone else in the market. To do this, the company has undergone a shift in culture; they have cleaned up their stores, changed their corporate colours and turned shopping with Matchbox into a holistic culinary experience.
Matchbox has moved with the times by understanding the needs of its customers based upon the necessity for a new image and product offering. They also seek franchisees who share the same vision and who they know will work hard to make the brand work.
The biggest mistake franchisees can make is to think the franchise will run itself. Matchbox isn’t looking for these types of operators, nor is any other successful franchisor.
It may be glorious to buy a Gloria Jean’s store, but the belief that opening the doors each day is enough to turn a healthy profit will soon dissipate as you fail to reach your profit potential.
Branding is about leverage. You may open your doors and enjoy a healthy response to the existing offering, but if all you are doing is pouring a coffee rather than offering an experience, your custom will leave and seek a better option elsewhere.
Marketing and branding are not the sole responsibility of the franchisor. Marketing and branding are your responsibility as a franchisee. You may have the logo, but do you have the right staff members who believe in the company and its message? Do your staff members have an attitude that represents who you are and how you wish to run the company? Does the aesthetic of your store represent the company as a whole? Is your store inviting and friendly from the manager down to the junior?
You need to take account of everything that makes the store run; from the systems, the ambience, the staff, the cleanliness and the product offering. In times when consumers are tightening their belts, your offering needs to stand out. The way to do this is to accelerate your brand power by staying true to the nature of the brand and representing that in every facet of your business.
Jess Logan is the founder and head strategist of Brands R People 2™, a leading strategic brand development agency. Jess is recognised as Australia’s leading independent brand strategist. Some of her clients include Hairhouse Warehouse, Healthy Habits, Mr Rental, Banjo’s Bakehouse, Oriental Teahouse, La Viette Baguette and Matchbox who have collectively won dozens of national franchising, marketing and branding awards.
Known for her holistic business approach to branding, her fervent consumer focus and her commitment to achieving bottom line growth for her clients she has achieved a combined turnover in excess of $200 million annually since her intervention in their businesses. Prior to founding Brands R People 2, Jess was the national brand manager for Boost Juice.
Visit www.brandsrpeople2.com.au for more information or to book into the next brand seminar for business owners titled “How to Build a Brand Leader”.