September 21, 2018
Franchisees face unique marketing challenges
Building a brand is an incredibly time-consuming and expensive challenge, which is just one of the reasons why franchise businesses are attractive to business owners. Buying a business with more established branding means that time and energy can be spent on operations, versus having to invest resources into brand building. Furthermore, when the menu and SOPs have already been engineered, owners can use their business acumen to focus on revenue producing activities.
Despite these advantages, it’s still no cake walk to ensure the success of your franchise. When it comes to operating a restaurant, franchisees face unique, complex challenges. In this blog post, we unpack these challenges and discuss how new technology is helping franchise operators succeed.
1. Limitations around mobile
Mobile is on everyone’s mind these days. Americans spend more time on their mobile devices than they do on their desktops and business owners want to ensure a strong mobile presence. While everyone would agree that a stand-alone branded app developed by a franchisee is clearly against franchisee rules, there are ways to participate in the mobile revolution and be compliant at the same time.
For example, new mobile loyalty platforms allow franchisees to be part of a network, without having a stand-alone presence. Like Groupon, Caviar, UberEats or Yelp, these platforms allow businesses to participate and reap the benefits, without the stand-alone presence that would break a franchisee agreement. Just like a stand-alone app, these platforms allow consumers to track progress towards loyalty rewards and allows restaurateurs to get critical customer data and feedback about the health of their business.
2. Advertising is run at the corporate level
Typically, high-level brand advertising is administered and run by the brand. In most franchise businesses the franchisee contributes an advertising fee to the brand at large, which helps pay for regional or national advertising. This type of advertising is meant to build name recognition across the brand — but it doesn’t necessarily impact YOUR store in a way that’s measurable or predictable.
So how can franchisees drum up additional sales within the context of their individual stores — and without the support of corporate? It starts with identifying your existing customer base at the store-level. By collecting customer data, you can launch personalized marketing campaigns at the store level and drive increased check size and frequency at your locations. The best (and easiest) way to do this successfully is by collecting transaction data whenever customers make a purchase with you — enrolling customers in an app-based loyalty program makes it simple.
3. POS Challenges
Franchisee owners often juggle multiple POS systems, which makes it hard to find unity when it comes to data collection… meaning the data you are collecting within the POS isn’t being used. That’s why franchisees are moving away from POS-based data and getting their customer data from the cloud. One of the reasons why your data collection should skip the POS is because extracting and consolidating data from multiple sources is prohibitively expensive and time-consuming — most restaurant operators don’t want to do this on a consistent basis.
With a loyalty program that grabs data directly from customers’ preferred method of payment and stores it in the cloud, franchisees can access and act on data without having to untangle it from disparate and clunky POS systems (or hire data scientists to interpret it).
4. Consumer needs
Keeping tabs on customer sentiment is a good way to take a pulse check of your business… but it’s hard to do that meaningfully at the individual store level. However, when franchisees implement a mobile loyalty application that pulls data from transactions, customers can be asked about their experience right when it happens — immediately after the transaction (learn more about Net Promoter Score at Thanx here) Franchisees who run multiple locations across one or many brands can get real-time information about things that their individual stores are doing well (or not so well).
Ultimately, franchisees must look to new technology to help them gather and make use of customer data to drive incremental sales at the store level. Cloud-based data, generated from a customer-facing loyalty app, is the type of technology that takes the marketing challenges of being a franchisee head-on.