Franchise digital marketing: don’t disenfranchise your franchisees

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Franchisees are often stuck from the get go in a situation that does not enable them to take full advantage of the standard marketing framework provided by franchisors, who routinely fail to help franchisees develop efficient local marketing initiatives.

However, by refocusing marketing funds allocation, and with the right tools under their belt, franchisors can solve all these ailments and enjoy nearly limitless benefits like:

  • Shifting marketing investments to improve unit-level economics
  • Durably building a tremendous competitive advantage
  • Unleashing local initiatives while retaining brand control
  • Dramatically reducing time managing franchisee satisfaction
  • Greatly reducing digital risks and protecting franchisees investment

Franchises are planes of doom that let too many passengers fall out without a parachute

Imagine the franchise network is a plane where the franchise is the pilot, and the business class is filled with premium franchisees. In the back, franchisees starters are seated in economy class, only dreaming to make it to business class someday when they have enough miles under their belt.

What happens in reality, is that most of them never will. Instead of making it to business class as a premium player, the vast majority of franchisee starters will fly from economy class straight out of the plane without a parachute.

From hero to zero, franchise-style

Of course, no franchise is alike. There are the Subways of this world, with a stellar 20 percent turnover rate, and then there are the Quiznos, who went from 4,700 locations to belly up in a single decade.

Franchisees rapidly find themselves with their hands full, soon realizing that the franchisor severely downplayed the (not so comprehensive) marketing and technology investments needed to achieve financial stability, let alone profitability.

No marketing, no client, and no acquisition budget to break it up.

Time is of the essence to curb franchisee exit rate

While the franchising world takes comfort in patting itself on the back for boasting 5-year franchisee survival rates around 90% (compared to 50% for SMB’s), these numbers should be taken with a grain of salt.

Industry detractors argue that no-one really knows how these numbers came about. For Sean Kelly3, publisher of self-explanatory website, “the myth that franchises are less prone to failure than other small businesses is simply that.”

Business is business, franchise or else, but there is in fact one area franchisees themselves point more specifically their fingers at: the franchisor’s inability to improve on marketing support and cost-saving technologies.

Given the complexity of getting franchisees to benefit franchise-wide marketing all the while trying to develop local initiatives, they seemingly simply can’t crawl fast enough to business class.

Beyond the battle of numbers, when it comes to ensuring that new franchisees will not fall out of the plane before they learn to fly, time is of the essence.

Franchise marketing success is not just all about the Benjamins

It may all sound pretty bleak, but facts are facts, and anyone with solid unbiased experience in the franchise business know that we should and can do better as an industry based on systematizing success.

The problem is known, now the question is: how do you fix it? I see two vital keys to franchisee success:

  1. Optimize marketing funds utilization.
  2. Get the right tools for the job.

Optimizing marketing funds utilization

With franchise fees following a steady 2 to 3 percent increase on a yearly basis, marketing efficiency at the franchise level is coming under increasing scrutiny and demand for accountability from franchisees.

Dishing out marketing and technology fees to a franchisor distributing them to good ol’ marketing channels (print, radio, tv, billboards) do not accomplish much as far as driving local leads to franchisees in a cost efficient manner.

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Marketing and technology fees, especially in the early days of an emerging brand, should go towards supporting lead generation activity, improving sales conversion rates, and marketing technology that allows to conduct coordinated campaigns at both national, and local level.

In other words, marketing technology and tactics that improves first and foremost unit-level economics.

Which gets me to my second point: you simply need the right tools for the job.

Getting the right tools for the job

Solutions exist, that let franchisees enjoy editorial and marketing freedom, while retaining full control of franchise brand essentials.

With the right tools, franchise networks can greatly reduce costs by centralizing all local resources in the cloud, kickstarting nationwide campaigns that can be fine tuned to its local audience by each franchisee.

For instance, the franchisor can finance and operate local marketing operations, leaving to franchisees enough freedom to tailor content suiting their unique needs, basically providing a highly effective framework and letting them filling the blanks.

The franchise can also simply provide technologies accessible to national organizations but out-of-reach of local franchisees, such as advanced email marketing platforms, loaded with email or SMS communication credits for them to use at their discretion6.

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When cost saving technology bridges the franchisor / franchisee gap

On top of saving marketing funds right off the bat, modern, fully distributed brand platforms can embark powerful tool sets, including geo-located customizable websites, analytics and franchise Customer Relationship Software (CRM) bolted to franchisees’ individual sites offering a bird’s eye view of what works and what doesn’t.

Much like PPC marketers constantly tweaking their advertising campaigns to reach optimal return on investment, a performance-based, instantly available CRM facilitates laying the groundwork for ongoing optimization, therefore generating even more savings down the road.

Such technology amplifies marketing effectiveness as franchises scale their brand’s footprint7, mechanically incrementing benefits in franchise recruitment efforts in the process while generating more leads in local markets.

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But truly distributed technology has many more benefits, as it let you

  • Isolate SEO impact from dangerous practices to individual franchisee domain
  • Make rogue marketing initiatives irrelevant thanks to its adaptability
  • Benchmark cohorts to spearhead data-driven discussions

Not every franchisee can generate millions on a regular basis, however any of them can see efforts rewarded in terms of relative growth and performance.

Instead of a financial burden, marketing fees become the growth fuel they are meant to be. Franchisees get the freedom of action they so eagerly crave for, while franchisors can shift their focus on simply providing a safe, effective framework along with clear brand directives.

By switching the focus to overall performance, you will turn your plane’s economy class into a potential business class for all. A plane that is also a lot safer for everyone to fly.

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