When it comes to franchising, it is easy to assume that the successful ones remain operational while unsuccessful companies ended up closing shop. While this is one way to measure success, it doesn’t offer any granularity and doesn’t help in determining what can help a business to be successful. Thankfully there are metrics that determine the survival of a franchise in the business industry, these include:
- Commitment to deliver on promises
- Availability of experienced franchise support
- Competency of staff
- Carefully planned processes
- Management and mitigation of internal squabbles
- Depth of understanding of the customers’ needs
Below we detail some simple processes that will give more clarity on the significance of understanding the customers’ needs when franchising.
RELATIONSHIP MUST BE ONGOING
Firstly, it is essential to know that any customer relationship is developed as a long-term goal, not for short-term gains. In most instances, an attempt at a short-term relationship tends to be deemed as selfish, as it only seeks to acquire benefits for a limited time period and communication is immediately ended once the company has achieved what it wanted from the customer.
On the other hand, an ongoing, long-term relationship with customers tends to be the most effective and beneficial one when it comes to franchise businesses as they are more reliant on sustainability. Developing a long-term relationship does not happen overnight, as it requires time and effort to learn and understand the various needs of customers and how they change over time.
The best place to start is the development of TRUST. The customer needs to trust that the business is not only going to be able to meet their requirements but that it will always be trying to do so in such a way that will ultimately benefit them. In terms of a franchise, acquiring this trust from customers is much more difficult if the same trust is not present between the franchisee and the franchisor. The franchisee has to trust the franchisor completely to deliver on its promise to offer services such as ongoing training services, operational support, marketing support, legal support, and more.
Both the franchisor and franchisee ought to make it a point that the relationship they already have must at all times be cultivated and maintained, although this is dependent on a two-way beneficial process or a mutually beneficial relationship. Franchisors must move away from engaging with the franchisee only when there is something they want or require, they must also engage when everything is on track. This is why it is critical to create and implement a communication plan and strategy. This document details what, when and how the franchisor communicates with the franchisee.
When problems arise both parties must not shy away from accountability as this often leads to the minimisation of engagement, which often only makes any existing issues worse.
CUSTOMERS’ NEEDS ARE TRANSFORMING
Recently technology and the rising number of competitors have played an integral role in fast-tracking the transformation of the needs of customers. The franchisor ought to be aware that the customer’s needs can be satisfied using multiple methods and that they are likely to change, meaning the same method used today won’t work a year later. As a result, innovation is of critical importance to the further advancement of any business.
Franchise businesses need to invest their time and resources into monitoring transforming needs by studying customer behaviour and attitude towards the business. This can be done using various tools depending on the requirements such as; monitoring trends, examining buying behaviour, observing the customer engagement processes, a sales study, market and brand research as well as research on competitors.
A good example to learn from is ACDC Express Franchise, through its implementation of product delivery/transportation strategy which has now been in place for the past few years. A number of customers who had challenges with transporting purchased products and the logistics of waiting in long queues have now come to an end. The impact on the transforming needs causes franchises to reposition and align their strategies in order to remain profitable and relevant to the market.
When franchise businesses do not take time to study the pattern of change, they miss out on delivering to the needs and desires of the customer. What happens next is that customers tend to shift to the nearest competitor who is offering a better deal.
Franchise businesses that place customer interests at the top of their priorities stand a better chance of performing well. Remember that customers remain at the centre, serving as the guide to franchise development and innovation.
IMPLEMENT PLANS AND STRATEGIES
Franchises must use market research in order to address these challenges. At times you find brands implementing plans and strategies that have absolutely nothing to do with addressing the challenges at hand. It is preferable for franchise businesses to develop strategies that focus primarily on customer retention.
It is important to take note that the basic principles of customer understanding can be applied to every business and not a specific sector. In most instances, a franchisor spends so much time making promises that they are not capable of keeping, making the right noises, yet end up with unexpected results, as the franchisor is attempting to sell brand attributes that are not genuine to the experience that they are able to provide for the franchisee.
Fig. 1 Customer Relationship Model:
Above is a simplified customer-to-business relationship model. This process illustrates a simplified method that any franchise business can use as the basic rules of engagement. The franchisee ought to know that there should be a relationship that is established with their customers which must be nurtured as an ongoing relationship. Secondly, the franchisee must be aware that the customers’ needs cannot be considered as fixed in place, there is always a potential for change. If handled properly these changes to customers’ needs provide room for more opportunities.
The most successful businesses are those that take advantage of the comprehensive customer data they have at their disposal. We consider it a challenge that for any franchise business TRANSFORMATION must be seen as an opportunity for growth. Franchise businesses that eventually falter are those that allow themselves to turn a blind eye to the transforming needs of their customers.
Businesses must strictly avoid complaining about customers with shifting needs and fickle desires, but must take it as an opportunity to continually monitor the customer’s position and establish improved plans on how to keep the existing and potential customers from going over to a competitor.
According to Business Reality Check, 55% of executives know they need to build trust with consumers, but that trust has been in steady decline. This trust is impacted by more than privacy and data concerns, but is also related to a business’ shared values and beliefs.
As a reminder: customers are not necessarily after a brand, but the experience and services associated with the brand.
In summary, the outcome of good customer experiences is determined by a thorough customer understanding and willingness to implement plans and strategies that will create and nurture a sustainable customer relationship.
If you want to read one of our success stories, click here.