There are pitfalls associated with franchisees riding on the coat tails of the existing brand awareness of their franchise group.
There are pitfalls associated with franchisees riding on the coat tails of the existing brand awareness of their franchise group.
That is the message from business consultant Dawn Russell in her book This Little Piggy Went to Market, which focuses on what franchisees can do to boost their business without relying on their parent brand.
Ms Russell told WA Business News that franchisees tend to go into business without understanding the intricacies of marketing, and assume they can rely on the general advertising of their franchisor.
“Successful franchisees are proactive in their marketing and not just piggybacking off the brand,” she said.
“One of the biggest issues they are facing is a lack of awareness that they need to have some business skills when they go into franchising.
“Invariably they are told everything is done for them and the high level marketing like brand awareness and overall advertising is, but they don’t realise they have got to get out and do something locally.
“Then of course they realise they don’t have the skills to do that, they don’t know how to go out and find local customers, they just hope the customers come to them.
“It is about tapping into the local community, knowing what is in your sales territory so you know what customers you have got.”
By understanding the different sales territories and the customers within them, Ms Russell said franchisees could promote their products and services with more acute and targeted marketing strategies.
She said franchisees could get this knowledge by running competitions or speaking at local networking events and measuring every marketing activity they are involved in.
“If you are going to do a promotion at a fete, make sure you give out a coupon that is numbered so you know exactly where that person has come from when they walk back in the door so you can measure whether it was worth going to the event and what you got from it,” she said.
Looksmart Alterations multiple-franchisee Fadi Mikhael said local marketing had become crucial to his businesses.
“Retail had grounded to a halt and it took a while for statisticians to notice this, but we noticed in our figures that sales just stopped growing,” he said.
“That was when we pushed local marketing and it worked in some areas and it didn’t in others.
“There is not one remedy to all franchises. Local marketing can be done through the marketing fund [of the franchisor] and it can be done by franchisees on their own and both can work and both can fail.”
Mr Mikhael suggested for him, the success of local marketing depended on the demographics of the local customer base.
“Not every offer is going to work in every store. It is the demographic and how the franchisee sells the promotion. If the franchisee isn’t on board, then the promotion won’t work, but if they are motivated, it will work better.
Mr Mikhael used the local marketing techniques suggested by the Looksmart Alterations franchisor, as well as his own initiatives.
He runs advertising in local newspapers as well as voucher drops and recently used cinema advertising.
“It didn’t work too well, but at least I won’t die wondering,” he said.
Another technique is teaming up with other local businesses in a mutually beneficial relationship.
“I would suggest they have a really good look in their local area. Find other businesses that share the same customers which they can join forces with,” Ms Russell said.
“We run fashion referral promos for staff in fashion retail stores to refer their customers to us; then the staff get prizes,” Mr Mikhael said.
Mr Mikhael suggested for those located in shopping centres, there are two key local marketing techniques that should not be overlooked.
He said shopping centres are constantly encouraging their retailers to get involved in the promotional activities, and if retailers don’t take this offer up they are missing out on an opportunity and wasting money on a promotional levy paid to the centre.
Mr Mikhael said franchisees should also be getting involved in organised events and activities.
“It is free and shopping centres know what works because most of them go and survey the retailers.”