First published in Franchising World - March 2014
By Charles Austin
Franchisees become multi-unit owners in multiple ways. In some cases, franchisors require a franchisee to start with multiple locations, while in others, franchisees start their business with one location and then add more as they become successful and have the cash flow to support their investments.
When it comes to marketing, multi-unit franchisees find themselves facing some of the same issues that franchisors face. Interestingly enough, franchisors can occasionally act as multi-unit franchisees if they corporately own franchises in addition to supporting their franchisees.
In any case, multi-unit franchisees have distinct opportunities, such as leveraging economies of scale between their stores, as well as certain challenges, such as balancing corporate marketing guidelines with the tactics that work best in their markets, and staying on top of ever-changing marketing trends.
Here, we will address two strategies for effective multi-unit marketing: message and measurement.
Start with the right message.
While it’s certainly important to stay on top of the latest marketing technologies and tactics, including mobile, social, online and offline, it’s critical to start with the right message and communicate it consistently through all channels. Your franchise’s message is the foundation on which all marketing efforts are built. It sums up your value proposition -- the overarching benefit you provide to your customers. A good message platform resonates with customers and potential customers and answers the question, why should I do business with you?
One common source of friction between franchisors and franchisees is the franchisors’ desire to build a brand nationwide and the franchisee’s desire to tailor messages to local conditions. While customizing a message for local conditions is ideal, it can lead to a dilution of efforts in building the brand.
Franchisors invest significant time in developing and testing a compelling message as part of the overall franchise brand. As a result, the message is tightly controlled by the franchisor. In most cases your franchising agreement will control the amount of freedom that you have in tailoring the message.
Leveraging the work that your franchisor has already done can ultimately benefit your franchises. For starters, there’s no need to spend time and money recreating the wheel, so to speak. Plus, ensuring that your local marketing materials are in line with corporate messaging and branding guidelines helps to grow an even stronger brand nationwide. That helps everyone win, because franchises with strong brands create a perception in the minds of customers that there is no other product or service on the market like theirs.
On a related note, as a multi-unit franchisee, your budget for marketing gets larger, which enables you to explore marketing tactics that may not have been previously feasible. Suddenly new print, web, radio and even television (cable or broadcast) options fall within your total marketing spend and may actually make sense given the number of stores you own within a defined area.
This is another area in which your franchisor’s marketing resources typically have great experience dealing with the pros and cons of different kinds of marketing media. Particularly if you are new to multi-unit marketing, it is wise to take advantage of your franchisor’s expertise whenever it is available. In some cases, franchisors and multi-unit franchisees have shared costs when undertaking new marketing initiatives.
Build in measurement.
Certainly, the best marketing program in the world is incomplete without good measurement in place. Every process improvement or quality control program begins with measurement. If you have no baseline and no method for determining the efficacy of a marketing spend, you are wasting time and money by essentially closing your eyes and throwing darts when it comes to making decisions on different marketing platforms and initiatives.
Measuring the results of your marketing spend produces three tangible benefits. First, you can determine which marketing activities are most successful and redirect resources from nonperforming tactics to those that are showing strong returns. Second, when creating new campaigns, you can draw upon previously measured results to make better decisions the first time through. Third, you can use the data gleaned from marketing results to improve business operations.
For example, are certain franchise locations receiving significantly more leads than others from proven campaigns? If so, you might consider altering franchise territories to balance the leads between different stores, or even opening or closing locations to better serve customers. This reaches into operations rather than marketing, but good measurement gives you the data to improve all aspects of your business.
So the question becomes, what should be measured, and how?
A great place to start is correlating marketing spends with lead generation and sales. As you grow more adept with understanding the data you have, you can add more layers of information to your analysis, incorporating demographic data and results, and even geocoding information so it can be geographically mapped and visually analyzed more quickly.
One of the most effective tasks franchisors can do for multi-unit franchisees is to work with their internal resources and vendors to insure that reporting systems allow multi-unit franchisees to see marketing, lead generation, and sales data across all of their units in a single view, rather than just unit by unit. In most cases, it is more efficient for multi-unit franchisees to evaluate results across all of their units rather than gathering data for each franchise location and aggregating it themselves.
The individual unit data is still valuable, but so is the big picture. The more manual manipulation is required to aggregate the data, the greater the cost in time as well as the chance for errors due to data format conversions and differences in the subjective interpretation of data as it is transferred from the franchisor to the franchisee.
Taking measurement even further will inevitably incorporate the type of data mining referred to today as Big Data. In most cases, franchisors have been dealing with Big Data for a few years now, and multi-unit franchisees can benefit from comprehending and using the vast raw data and analysis tools that Big Data now makes available. Your franchisor may already provide some level of Big Data analysis and tools. Soon all franchisors and their franchisees will be dealing with Big Data.
An example of a Big Data tool that everyone is familiar with is Google Analytics, but your business will likely need more than this. Two good references on what’s driving these changes are Makers: The New Industrial Revolution by Chris Anderson, and The Signal and the Noise: Why So Many Predictions Fail – but Some Don’t by Nate Silverman.
Multi-unit franchise owners face a number of unique challenges and opportunities, but getting the message right and measuring your activities can go a long way toward helping you get the most from your marketing spend in generating leads, converting them to sales, and building strong brands within your communities.
Charles Austin is president of AdGeo, Inc., which provides marketing measurement, call routing, mobile location routing, and other communication services to franchises large and small.
Published in Franchising World - March 2014