While many companies will profess that they work hard, we feel that the best ones work SMART. The SMART methodology was coined by Paul J. Meyer, author and founder of Success Motivation International.
Let’s be SMART about this
Customers interested in buying a new franchise should determine whether or not the objectives and promises made by the franchisor are SMART (Specific, Measurable, Achievable, Relevant and Time-bound).
Since the buying power resides with the customer, some of the key questions to cover prior to making a franchise decision are:
- Do you have an existing customer base or contracts, and will these be provided to me?
- Why does the franchise seem expensive?
- What is the existing footprint of the franchise within the country?
- What market research was done per province and zone prior to franchising the brand?
- What competitive advantage exists for this franchise within the South African market?
- How will converting my current company into a franchise benefit/improve my business?
- What marketing support do I get in order to improve sales and promote the franchise?
Most of the franchise prospects we have been engaging with in the past regarding new franchising opportunities tend to begin by raising a number of important questions. The answers to these often provide much-needed assistance in the decision-making process.
It is the duty of the franchisor to execute franchise processes that will be beneficial to potential franchisees. The greatest mistake that has been repeated by customers is not asking all the necessary and important questions beforehand. In our experience, customers interested in a new franchise get carried away by promising short-term performances of a specific franchise and expect the same of their potential new franchise.
In other instances, prospective customers make decisions based on limited information gained through a single channel (such as word of mouth). Having too little information normally leads to inaccurate positive or negative impressions of the franchise.
On the other hand, franchisors make the mistake of failing to provide potential customers with answers to the questions that will help them make the right franchise decisions. A franchisor that inspires confidence in customers stands a far better chance of success by openly and honestly engaging with potential customers.
Everyone is a brand ambassador
Another crippling factor in many franchise businesses is the failure to comprehend that every employee is a brand ambassador and can sell a franchise, irrespective of their position in the franchise’s employment hierarchy. Franchise businesses should consistently ensure a top-to-bottom approach whereby every employee understands the processes involved in owning a franchise business, and is readily equipped with the right answers to frequently asked questions. A franchise business must make brand ambassadors of its employees and enable them to sell the franchise.
Addressing concerns and answering frequently asked questions will assist in establishing and maintaining, or restoring customer confidence.
When making a purchase decision, it is critical that franchise consulting firms are aware of the customer’s decision-making processes regarding a franchise. Factors to consider are:
Low-Involvement Decision-Making: This is a decision-making process that does not require substantial amounts of time to arrive at a decision. Such decisions can be made in a couple of seconds, minutes or even immediately. For example, the decision to purchase soap, bread, sugar or fresh milk is a decision that requires very little consideration. In many instances, customers are likely to have an emotional
drive when arriving at a purchase decision.
High-Involvement Decision-Making: This is a process that requires substantial amounts of time before making a decision in order to gather the necessary information that will assist the decision-making process. This can be regarded as a rational decision-making process. This is the approach or method commonly used by franchise businesses, though some may be unaware of the decision-making process itself. Examples of such decision-making processes are purchase decisions for a car, house, new business venture or even deciding which tertiary institution to register with.
Deciding on a new franchise business requires a well-informed and guided approach whereby customers are given as much substantial and valuable content as possible in order to assist them in making the right decision.
Franchisors whose only concerns are making a profit while ignoring the continually evolving needs of the market are doomed to failure. When it comes to high-involvement products and services, offering customers what they understand is a far more realistic pursuit.
Customers will feel more confident and comfortable investing in a tried-and-tested business venture that has been successfully implemented and continues to thrive on an operational level. While it is the franchisor’s duty to deliver on promises made, customers ought to be reminded that starting a franchise is not without risks and in order for the venture to succeed, both franchisor and the customer must collaborate and function as a cohesive unit.
The success of a franchise business is dependent upon the good and bad experiences encountered along the way. In general, the greatest challenge that most businesses have is failing to address dissatisfied customers or dealing with anything that may potentially harm both the brand and future business opportunities.
Successful franchise businesses do not shy away from questions that reveal potential weaknesses within the franchise. Rather, upfront and honest demonstration of what has been done to improve or fix past mistakes are paramount to building good rapport and establishing a good reputation. The SMART methodology values measurement, even if it is measuring the issues related to negative issues or weaknesses.
In conclusion, successful franchisors that stand out from the crowd are those that inspire confidence in the customer through a step-by-step process that ensures all critical questions are answered with clear and forthright intent. All franchisors know that prospective franchisees will not commit to investing substantial amounts of money without conducting a thorough analysis that reflects both the advantages and disadvantages of such a venture. The goal in all franchising endeavours is to ensure that the franchisee’s investment is sound, as the repercussions can have long-term ramifications.
Successful franchisors must invest in providing customers with information that not only empowers them to make the right decisions but results in businesses that are mutually beneficial and profitable. By doing this, franchisors ensure the establishment of a good relationship between themselves and their franchisees going forward.
If you aren’t sure if franchising is the method best for you yet, we have written about it here.