Unlocking growth through effective Local Area Marketing: What a franchisor should know
The era of Local Area Marketing has arrived. The effectiveness and efficiency of mass marketing is diminishing as more choiceful, demanding shoppers have access to brand and business information at their fingertips.
Additionally, digital technology is facilitating more targeted and customised interactions with local shoppers.
This gives franchisors a unique opportunity to empower their franchisees with the tools and confidence to execute Local Area Marketing brilliantly, engaging local prospects and converting them into buyers. And if every franchisee can increase their local business, franchisors will see an improved commercial return.
So it is crucial to understand the key local area marketing challenges facing franchisees and what franchisors can do to help turn these challenges into growth opportunities.
Challenge 1: Understanding local customers
A franchisee may have relevant industry experience or have worked locally, and is likely to have a ‘gut feel’ on the type of customers they are selling to. However they often lack a comprehensive understanding of who lives in their primary marketing area (PMA), which customer types they should be prioritising, and the buying behaviour of these customers. This can lead to them executing generic marketing campaigns that fail to appeal to specific audiences, or are targeted at the wrong types, and therefore don’t deliver a return on investment.
It is crucial that the franchisor gives franchisees a clear understanding of their local audiences to help them answer the following questions:
Who are my local customers and how can I engage them?
A crucial start point is for the franchisor to provide a local population analysis, highlighting the audience make up of the PMA. However, in addition franchisees need a deeper understanding of the primary audiences they will be selling to, be it young families, professionals or students. For Toyota, working with regional marketing teams, we delivered 150 of their dealers a deep analysis of their PMA, and data, insights and strategies on their most important audiences. This has led to a more targeted approach by dealerships, more effective LAM campaigns and reduced wastage of marketing spend across the network.
For each audience, franchisees should be given clear data and insights into:
Demographics: who are they, where do they live, what do they do, what is their financial status?
Lifestyle: how do they spend their time, what motivates them and what role can we play in their lifestyle? Using this information we could develop time of year, week or day offers that tap into the audience’s mindset at that time.
Interests: what are their passions, and how canwe tap into these to provide motivating reasons to choose our business? This helps franchisees create partnerships, events, promotions and offers that generate new local customers.
How do I target them effectively?
The information franchisees need includes:
Media consumption: which channels are the audience using most frequently, at what time of day, and how can we cut through in these channels? Where possible, this information should be localised to the PMA and cover community and cultural media. With media being the biggest marketing cost facing franchisees, it’s crucial that they are given guidance on the right channels.
Community and Sponsorships: help franchisees understand if this audience is likely to participate in community initiatives and how they spend their leisure time. If they like to visit cultural events, play sport, participate in the arts or enjoy the outdoors, then sponsorships or other initiatives that tap into these passions offer a great opportunity to reach and engage locals. A stronger customer relationship can be built by tapping into audience lifestyles.
Database and Social Community: many franchisees will look to generate a database of customers they can market to in the future, but will need guidance as to how to do this and how to then leverage this database to drive frequency of purchase and long term loyalty.
Additionally, it’s often crucial to create a social community for the business, so guidance on the relevance of platforms like Facebook and Instagram, instructions on how to build social communities and crucially, how to then engage locals through them give franchisees the knowledge to engage their locals effectively. We performed a digital and social health check for one franchise network and found that by implementing just a few simple strategies franchisees created an average 40 per cent plus improvement in their reach and engagement on these channels.
Challenge 2: Franchisees lack capability and confidence in marketing
Very few franchisees have a marketing background and identifying and implementing local area marketing activity can be a daunting prospect for them. With so many marketing channels to choose from, it’s no surprise that many franchisees take a risk-averse approach and keep their marketing dollars in their pocket. Improving the marketing capability of both key franchisor staff at a regional or local level, and the franchisees themselves, is crucial to ensuring that franchisees are given the knowledge and guidance to confidently invest in activities that will generate customers.
There are three key aspects to this:
Proof of Success
National and Regional stakeholders should have a clear understanding of the most effective local area marketing strategies for the customer groups their franchisees are targeting. What will work well to engage retirees is unlikely to appeal to students or tradies. Partnering with franchisees on trialing a range of different campaigns with different customer types and measuring the results will give the franchisor team the ability to guide franchisees on the correct LAM strategies for their business and provide proof that these work.
Local Area Marketing Training
It is crucial that franchisees are trained in Local Area Marketing, and that this process is ongoing to reflect the latest industry trends and opportunities.
Training should be tiered if possible to ensure groups of franchisees with similar capabilities can participate and improve their knowledge and capability together. Ideally, training would cover how to tackle common local area marketing challenges, with solutions created by the franchisees themselves. They would then be trialed in relevant PMA’s and if successful, turned into toolkits by the franchisor for the whole network to utilise.
Two Way Communication
Finally, there needs to be strong communication between franchisor and franchisees to ensure that not only do franchisees have access to support when they need it, but also that feedback is generated from franchisees on the implementation and success of campaigns to assist in evolving solutions that generate even better results in future.
Challenge 3: Franchisees need tools and assets they can leverage for their Local Area Marketing
It is vital that franchisees aren’t left to their own devices when it comes to developing Local Area Marketing activity. Outside of communicating clear brand compliance criteria for all marketing to franchisees, the franchisor also has a crucial role to play in giving franchisees the marketing tools to execute best practice campaigns.
The tools and assets franchisees need include:
‘How To’ Guides and Handbooks
Franchisees need clear instruction on how to implement Local Area Marketing activity. If the franchisor can provide simple to follow guides, checklists and measurement tools, it can make a huge difference to effective local execution, giving franchisees the best chance possible of generating incremental revenue from their campaigns. Toyota dealer feedback on the tools, checklists and instructions we created for CRM is that they have led to much more targeted campaigns being executed. One dealership generated a Return On Investment (ROI) of 4,000 per cent from an eDM targeting lapsed service customers!
Customisable campaign assets
These assets should cover campaign material for all applicable media, in a variety of sizes, to ensure a fully integrated range of activity can be executed in market. By making these assets customisable, including messaging and background visuals, franchisors can ensure that specific groups can be targeted effectively at a local level, especially when the material provided includes guidance on specific messaging and visuals to target key groups such as teens or mums with young children.
Franchisors have a crucial role to play in giving franchisees the training and tools they need to ensure that they are confident in investing their own marketing dollars. Only with a long term commitment to supporting franchisees can franchisors be sure that the era of Local Area Marketing will be leveraged to create a win for all stakeholders.
Adrian Richards has over 20 years’ marketing experience and is a Managing Partner of The Station Agency, one of Australia’s leading Shopper and Local Area Marketing consultancies. He heads their Local Area Marketing team in developing and managing a range of marketing programs for clients including Toyota and Lexus.
The Station Agency are a Sydney based full service marketing consultancy specialising in developing ideas that convert shoppers into buyers, and have a wealth of brand, shopper and local area marketing experience.
02 8038 4900