Making the Most of Marketing Technology
Franchisees should have a sound understanding of their financial positions and match funding with long-term plans.
By Shawn Dan, CFE
When someone buys a franchise for its proven brand value, business format and operational expertise, a marketing automation platform is often part of the attraction. It can deliver benefits to franchisor and franchisee alike: easy ordering of online, offline and promotional tools; economical pricing through group purchasing; greater brand consistency; personalization to local markets; and reduced “joint employer” risk.
Franchisors can gain more benefits when they leverage data from these platforms to encourage marketing program adoption whether franchisees are newly acquired, in expansion mode, or strong advocates for their brand.
Determine Your User Base
When it comes to marketing platforms, are you one of those franchisors who have faith that, “If we build it, they will come?” They may not. When was the last time you checked? Franchisee adoption can be a challenge for even the most successful franchises. Even under mandated buying programs, we typically see 20 percent to 30 percent leakage or more to unapproved suppliers. If you are serious about wanting to improve adoption of your marketing programs, you need to take a periodic inventory of who is ordering from your platform.
Know Which Materials Deliver the Best ROI
Begin by assessing which items are popular with franchisees and which are never ordered. Then go a step further and see how effective your marketing materials really are by correlating usage data with franchisee revenue potential.
However you benchmark revenue potential – per chair in a salon or per truck in a mobile business – compare the amount of marketing dollars your franchisees spend against the revenue they generate. You’ll be able to see which items are most popular and whether they are truly helping franchisees connect with their customers and grow their business.
Segment Your “Customers” to Boost Adoption
Each franchisee independently adopts technology at different rates, based on their level of marketing savvy, how their business is faring and their relationship to your company in general. But if your analysis of ordering data shows that a third of your franchisees aren’t using the platform, you have an adoption problem. In the case of a large national provider of moving services, 200 of their 640 units were not buying anything from the preferred print supplier, even under a mandated contract.
To raise awareness and increase adoption, franchisees should be cultivated as customers. As you would for any campaign, the first step is to segment the market. Instead of taking a more traditional approach such as geography or size, consider segmenting by saturation level, that is, the percentage of marketing materials a franchisee buys through the platform compared to their successful peers. Here are some saturation-based segments you might consider:
- Acquisition targets: These franchisees buy little or nothing through your platform today or only take advantage of “free stuff.” They may do very little marketing at all. When they do, their independent purchasing may put your brand image at risk.
- Expansion targets: These franchisees use the platform for some marketing material, but don’t purchase as much as peers of a similar size or location. They may be heavy users in a certain product category, but purchase nothing in other categories you offer.
- Retention targets: These franchisees are loyal buyers at an appropriate volume for the size of their unit. Your goal is to retain that purchasing level and turn them into advocates who are willing to share their experience with other franchisees.
Once you know who falls into each group, craft a strategy for each segment.
Use Different Strategies for Different Audiences
Acquisition targets may not be using your platform for a host of reasons. Since your investigations may appear intrusive, push your suppliers to connect with acquisition targets through honest dialogue, perhaps at your annual convention. Encourage suppliers to step outside their booths to participate in breakout sessions and social events where they can listen, not just sell. I recently attended 14 breakouts at a national conference for a leading services franchise and found it a much more natural way to understand the concerns of their franchisees. In fact, such learning opportunities can help position the supplier as an important source of franchisee feedback.
Expansion and acquisition targets can both be influenced by the success of “advocates,” your stars within the retention segment. Advocates are willing to tell their success stories to other franchisees in newsletters, emails, group meetings or other means.
To find advocates, look first at your marketing advisory council. Its members can play a useful role in peer-to-peer education as well as providing feedback to your company. If you don’t have candidates who can serve as advocates today, consider recruiting some through an “Adopt-a-Franchisee” program.
Select as pilot units several diverse users of the marketing platform that represent the diversity of your franchise, whether geographically or by customer type. Give these pilot units tools that are donated by corporate marketing or suppliers (e.g., direct mailers, flyers, promotional items) to eliminate the cost barrier. Be sure to include the strategic marketing advice and support needed to implement them properly. Then share their results with other franchisees, developing internal case studies that showcase the improved results to be gained by adopting best practices.
Peer-to-peer sharing that demonstrates value tends to work better than a slap on the hand for non-compliance, especially in today’s climate of joint-employer risk when heavy handed tactics can backfire. Suppliers can be another channel to reinforce sharing of best practices, both from others in the industry and your own network.
Retention targets are your strongest users of the platform today. The best way to keep them loyal is to continue providing best-in-class service that makes their lives easier. Resist the temptation to focus all your attention on the franchisees who already love you, but be proactive when it’s their typical time to reorder. If suppliers can provide hands-on service to loyal users, they may be able to turn them into advocates over time.
Do More of What Works
Now that you know which marketing tactics are preferred by your franchisees and which help them make the most money, shift your staff resources to work on the highest performing programs and tools. Focus your resources on producing the direct mail campaigns, POP signage, neighborhood events and other tactics that have proven successful for your best franchisees. But allocate some staff time to develop new tactics, too, as well as the training needed to educate franchisees on how to use them successfully.
Remember that while franchisees are your customers, you share a common interest in the ultimate “consumer experience.” It is important for franchisees to have a positive brand experience themselves before they create one for their own customers. Look for suppliers that understand the healthy tension between franchisors and franchisees and can advise on current issues and trends. After segmenting the franchisees and developing a strategic communication strategy for each saturation group, you will be in a great position to drive adoption and brand consistency by making the most of your marketing technology.
Tips for Making the Most of Marketing Technology
- Mine the data in your platform. Take a periodic inventory of who orders materials from your marketing technology platform and with what frequency. What items are popular with franchisees and which are never ordered?
- Correlate usage with revenue. Are your most successful franchisees the ones who spend the most on marketing? If not, your programs may not be helping them as much as you had planned. Enlist the help of your marketing advisory council to analyze and interpret the data.
- Segment your “customers.” Consider segmenting your user base by saturation; that is, the portion of tools and programs they access from the total spectrum offered. Then plan ways to encourage greater utilization of tools by sharing best practices from peer advocates.
- Avoid “one size fits all” communication. Target your messages to acquisition, expansion and retention targets differently. Some success stories will resonate more with certain types of franchisees than others.
- Leverage your supplier base. Encourage suppliers to step outside selling mode and engage in honest dialogue with your franchisees about what’s working and what’s not. Install feedback loops to ensure that remarks made to customer service teams are gathered and analyzed.
- Spend where it makes the most sense. Be deliberate and intentional in your allocation of staff resources. Focus on high-performing programs and tools that franchisees will readily embrace, but free up time to develop new techniques, too. Newer media channels are where you might get a jump on the competition.
- Don’t just train; explain. Develop the tips and training needed to sell programs to franchisees. Don’t forget training on the “tried and true” as well as stretch techniques. Also, tell your franchisees how you are spending national advertising funds and hold yourself accountable to them.
Find Shawn Dan, CFE, at fransocial.franchise.org or contact him on LinkedIn.