New figures from TFM Digital and Nielsen find that long term thinking can also help franchisors solve short term problems
It’s been a tough past 12 months for businesses. Between rising rents, inflation worries and soaring interest rates impacting disposable income, it’s no wonder smiles have been hard to find. But hope is still there, according to figures from the latest Future Franchisee report.
Brighter outlook ahead
Every quarter, the number of High Value Franchisee Prospects (HVFPs), categorised as those with $100K in the bank, are tracked for market sentiment. While the pool of potential HVFPs has gone down slightly (quarterly drop of 11%), it’s still 463,000 and those that remain are motivated, with 40% in favour of “a complete career change”. And 70% of that same group agree that “Success is very important to me”. So the appetite is still there. In fact one in five list economic growth as the most important social issue – that’s above interest rates, mental health and the environment. So brands that align themselves with economic/macro economic trends will be positioning themselves front of mind for HVFPs.
The silver lining can also be found in Roy Morgan’s latest numbers as well with business confidence up from this time last year, and importantly over half (52.1%) of businesses expect good times over the next 12 months – the highest level since 2022.
Understanding the mindset
I have a vested interest in this area myself, given I am not only the CEO of a franchise marketing consultancy, TFM Digital, but also the proud owner of Brisbane-based City Cave Float & Wellness Centre. Becoming a franchisee I went through all of the labour intensive research that’s required, pre-launch, operations, sales. And it’s helped my understanding of the franchisee and franchisor challenges, sitting on both sides of the fence now.
From a media perspective, we know from researchers like Ehrenberg Bass, that 95% of B2B buyers are only ever 5% in-market consideration mode, the rest of the time, they’ll be observing. So looking for top-of-funnel awareness branding, using insights from your unique buyer behaviour sector, could be worth investigating. From the Future Franchisee report, shopping attitudes which indexed high included: “I Pay Extra for Well Known Brands”. Branding is crucial for this segment as we know that people want to join/aspire to famous brands.
The report also found that gyms are a place of activity and down time for HVFPs, and represent a new / alt media environment that offer new opportunities for B2B conversations.
Travel is another big consideration this year for this cohort, and so targeting experiences and those with insights/databases in this area would be wise for savvy franchisors, with over 30% having visited Qantas.com in the past month, and visited an airport at least once a month.
Another behaviour which out-indexes the general population is paying for content subscriptions (such as news paywalls), as well as magazine readership. Franchisors are still able to reach this coveted group through journalism, targeted advertising or content plays. And podcasting again proves to be above average, although it is a fragmented channel, and so I’d recommend looking into content or media partnerships (e.g. this can be automated
within agreed parameters through programmatic ad buying across all publishers, wherever the audience is listening).
Invest now
While the future may be unknown, given the current economic climate, it’s worth looking at how businesses have fared in previous downturns.
B2B marketing is often one of the first things to be cut in more challenging economic conditions, but historical examples indicate that those who view downturns as an opportunity, come out ahead when the market improves.
However, the biggest focus for Franchisors right now should be their own business goals.
Prioritising B2B marketing can also help grow the size of their market share, while having secondary benefits of more noise, potential customers, increased publicity and a greater consideration for future franchisees.
While it can be easier to defer your attention to the loudest voices, especially given where we are right now, this is not a sustainable approach. Often franchisees are demanding support, which leads to many prioritising fixing the leaky bucket at the bottom (e.g. underperforming stores). But this will not grow your franchisor business faster.
Those that are able to invest in growing their share of the market, or the size of the sector (bucket in our analogy), will offer a halo effect of brand marketing, and bring benefits for everyone in your network by creating a stronger brand, with more attention drawn to it, higher levels of consideration and ultimately delivering against your bottom line.
Thinking long-term will benefit all
Now this is not the time to forget completely about B2C, but the focus should very much be on your own business first. Apply your gas mask first if you will. Look at ways to grow your franchise network. The lesson from the latest quarterly Future Franchisee report is that high value prospects are still looking for opportunities and are more primed than ever to invest. Remember niche audiences require a niche approach.
Taylor Fielding is CEO of TFM Digital, and recently spoke about being data driven, at a Digital in Practice session at the National Franchising Convention 2024.