A little while ago I wrote an article about Managing Costs to Maximise Profitability, but in all honesty, a cost-cutting manager is often a short-lived manager. Don’t get me wrong, a watchful eye on costs is always a good idea, but it’s not even half the battle. The driving force behind any business is of course revenue.
Now, some might think that when it comes to franchising and revenue, it’s the Field of Dream method; “Build it and they will come”. Of course, in any business that just isn’t so. Owning a franchise does offer a unique blend of independence and support, but maximising revenue often requires creative thinking and strategic action within the boundaries of your franchisor’s framework.
So, whether you’re about to embark on your franchising journey, or you’re already on the road, it’s worth looking at some strategies that can help you get the most out of your franchise and take your business to the next level.
Lay the Foundation with a Strong Pre-Sales Strategy
If you’re just starting your franchise journey, your pre-launch phase is critical for generating excitement and building momentum. A strong pre-sales strategy can set the tone for your franchise’s future success, especially in industries like fitness, food, and hospitality. Here’s some things you can do before you’ve even opened your doors:
- Build a customer database: Use social media, landing pages, and events to collect contact information for potential customers. Offer early-bird discounts or VIP access to incentivise sign-ups.
- Engage local influencers: Collaborate with influencers or community leaders to amplify your marketing efforts and reach your target audience.
- Offer exclusive pre-launch benefits: Consider memberships, trial periods, or limited time offers that encourage customers to commit before opening day.
- Plan a memorable launch event: Combine entertainment, giveaways, and product demonstrations to create a buzz that lasts beyond opening day.
Hopefully your franchisor has templates and tools to help you make your pre-launch period as successful as possible, but make sure you ask for them. Also remember that there’s no substitute for putting in the hard yards, get your kids branded t-shirts and have them help hand out flyers. Talk to other business owners in your area, you’ll be surprised how much you’ll learn and how valuable those connections will be. Hitting your pre-sales targets early is a sure-fire way to set yourself up for success!
Collaborate with Your Franchisor
Your franchisor’s experience and resources are invaluable assets. By actively engaging with them, you can access tools, insights, and support that can directly enhance your revenue-generating potential.
- Analyse network-wide performance data: Almost every franchisor will already be tracking metrics across their franchisees (and if they’re not, ask why not!). You can use this data to identify areas for improvement. Look at the best performing franchises in the network and ask ‘why?’ and ‘how?’, the more you know, the better you’ll go.
- Leverage network marketing collateral: Tailored campaigns, professionally designed assets, and seasonal promotions provided by the franchisor save time and ensure brand consistency. Talk to your franchisor about how they support things like social media, Google reviews.
- Don’t stop at stuff: Collateral is useful, but many franchisors also offer access to marketing experts, operational consultants, or training programmes to help you refine your approach. Don’t be afraid to ask for help, you’re paying for these people with your royalties and franchise fees.
- Collaborate on local initiatives: Find out if your franchisor runs regional or national campaigns and ensure your business is leveraging these for maximum exposure. Sometimes you’ll need to find the way to best adapt a campaign for your business.
Keep a Close Eye on Competitors
Even if you’re operating within a tightly regulated franchise framework, you can often still ‘borrow’ and adapt strategies from your competitors. You might require the approval or support of your franchisor (if you don’t know, ask!), or you might be able to agree some ‘tram-tracks’ for how you can do your own thing (within reason of course). Here’s some ideas:
- See how they price their products: Are competitors offering tiered pricing, discounts, or package deals? Consider whether similar strategies could work for your franchise.
- Try out their customer experience: Visit your competition and check out their products, their customer service, store layout, etc. If you think you might be recognised, you can always send a trusted relative or friend. And don’t forget to check out their online experience!
- Track competitors’ promotions: Whether through social media, direct mail, or other advertising channels, keeping tabs on their offers can inspire ideas for your own marketing efforts. Sometimes your competitors might run to a particular calendar, so you might be able to time your promotions to compete, conflict, or avoid their promotions depending on what you’re trying to achieve.
- Differentiate yourself: If you see an area of difference or weakness, don’t be afraid to exploit it! Do they close too early? Not serve breakfast? Not offer personal training? Make their loss your gain!
Make Data-Driven Improvements
A famous American business advisor is credited with saying “In God we trust. All others must bring data.” Boring as it might sound, data is one of the most important assets, and knowing how to read it and act upon it is your most powerful tool. By continuously tracking and analysing performance metrics, you can make informed decisions that directly impact revenue.
- Track key performance indicators (KPIs): Monitor metrics like customer retention rates, revenue per transaction, and conversion rates to pinpoint areas for improvement.
- Conduct customer feedback surveys: Regularly collect insights from your customers about their experiences and use their suggestions to refine your services or products.
- Experiment with small changes: For example, test different types of upselling techniques to increase average spend.
- Invest in technology: Many franchisors provide tools to track and analyse data. If not, explore third-party platforms to manage your inventory, customer insights, and sales performance.
Build Strong Customer Relationships
Customer loyalty is a reliable revenue booster. Happy customers return more frequently, spend more, and recommend your business to others.
- Push your loyalty program: Whether it’s a points system, discounts for repeat visits, or exclusive rewards for members, a well-designed loyalty programme can encourage repeat business. Just make sure your customers know about it, understand the benefits, and get them signed up!
- Engage personally: Use email marketing, personalised follow-ups, or birthday discounts to build a connection with your customers.
- Host customer appreciation events: Strengthen relationships with your existing customer base by organising events like VIP nights, workshops, or special sales.
Focus on Local Marketing and Community Engagement
Even though you might be part of a big business, make sure you leverage your local edge to become an integral part of your local community. Localised marketing can help you build goodwill and attract a loyal customer base.
- Participate in community events: Sponsor local sports teams, join charity drives, or host workshops to create a positive local presence.
- Use hyper-local advertising: Consider ads on local radio stations, newspapers, and social media platforms that target specific areas.
- Collaborate with other local businesses: Partner with complementary businesses to cross-promote services or products. For instance, a fitness franchise could team up with a health food café for joint promotions.
And there you have it! The beginnings of your roadmap to increased revenue and profitability. To round out these ideas and to keep yourself on track, remember to:
- Review and revise your business plan: Periodically revisit your goals and strategies to ensure they align with current market conditions and trends. Don’t keep that document in a drawer to look back on. Revise it often and assess every assumption against what you know today.
- More of / Differently / Better: Time and again I return to these words. What do we need to do more of, what do we need to do differently, what do we need to do better? Be brutally honest with yourself and then act!
- Engage, engage, engage: Attend industry events and participate in franchisor-led initiatives to keep up with developments. Connect with other franchisees to share experiences, learn from their successes, and troubleshoot common challenges.
Remember, maximising revenue as a franchisee requires a balance of creativity, diligence, and collaboration. By tapping into franchisor resources, staying connected with your local community, and continuously seeking opportunities to improve, you can unlock your franchise’s full potential. Hitting it out of the park isn’t just about following the franchise playbook—it’s about knowing when and how to go above and beyond within the boundaries of your franchise system!
About the Author
Phil Chaplin the Chief Executive Officer of the CFI Finance Group, a specialist finance company servicing the franchise, accommodation, and fitness sectors as well as small businesses more broadly cross Australia and New Zealand.
Phil has over 20 years’ experience in providing finance to businesses across Australia and New Zealand and has managed finance companies in the private and banking sectors, he is a former chair of the Equipment Finance division of AFIA.