Six Key Ways to Stay Ahead of the Competition
By conducting research, knowing what customers want and following a strategic plan, you can outdistance competitors.
By John Hoose
According to a recent IFA Educational Foundation study conducted by PricewaterhouseCoopers titled, “The Economic Impact of Franchised Businesses in the United States,” “franchises provided 9,797,117 jobs, met a $229.1 billion payroll and produced $624.6 billion of output in 2001.” With this huge, growing franchise market, it can be difficult to stand out and have an edge over the competition, especially on a tight budget. However, by taking the time necessary to develop new services, franchisors can increase customers and sales cost-effectively.
To discover creative ideas that will make a franchise system stand out, it is essential to regularly conduct research and be aware of these key factors.
1. What is the competition really doing?
As a franchise system, it’s important to follow current, industry trends on a daily basis. But it’s also necessary to study the competition’s potential plan-of-action. Companies may be aware of their recent news and services, but what are their future plans?
To move ahead quickly, franchise systems need to look at competitor data in a new way. Business models, online newsrooms, marketing materials and annual reports can reveal secrets pertaining to goals for growth. Review this information carefully and then consider strategic activities to pursue what the competition has missed.
By constantly being aware of the competition’s activities and looking at the overall picture, a franchise can develop unique ideas and services that will keep it two steps ahead.
2. What do your customers want?
To develop unique ideas, start obtaining regular feedback from your customers. They can tell the company exactly what they want now and how to make improvements for future offerings. Involve them in regular online chats, group discussions and surveys. And really listen to what they have to say.
Just look at the successful Domino’s Pizza brand that had global retail sales of more than $4.9 billion in 2005, comprised of nearly $3.3 billion domestically and more than $1.6 billion internationally. “The foundation of Domino’s Pizza is built upon an exceptional product with exceptional customer service,” states Hoyt Jones, a Domino’s franchisee. “As long as we continue to deliver a quality product, great service and exceptional value, we will be satisfying our customers.”
To involve customers, be creative. Consider developing a contest where both current and potential customers name a new product or service. Not only will this give the franchise organization some great input, but it will offer numerous publicity opportunities.
Also, track feedback and share ideas with your team to make appropriate changes. By constantly getting information directly from customers, you’ll be able to offer valuable goods and services that will dramatically increase sales now and in the future.
3. What new technology is available to help you get the work done?
Without learning about the latest technology offerings, franchise companies may be wasting time and money. Get educated and know what is available including new software tools to help with accounting, customer relations, marketing, and more are affordable ways to increase productivity. But if a company doesn’t know they exist, they can’t use them.
For example, Jan Gilbert, a partner at Haynes and Boone law firm, reports that he sees many franchisors now using point-of-sale systems to beat the competition. “POS systems enable the franchisor to view and analyze customer purchases across a variety of matrix,” Gilbert says. “Many franchisors are using technology in connection with the site-selection process to assess the viability of markets and locations and to predict future patterns and trends.”
To keep abreast of current technology, read business, marketing and industry-related publications to constantly hone your skills. Be aware of your surroundings. Review television commercials, print advertisements, news announcements, and current events to trigger creative, innovative ideas and solutions to problems in your industry.
4. Who can help you?
Hire a team of energetic people who care about the growth of your business. Constantly motivate them to do well and reward excellence. “To be successful in business, it is not enough to simply provide annual, employee reviews and offer feedback,” states Theresa Welbourne, Ph.D., eePulse Inc. president and Univ. of Michigan Business School adjunct professor of executive education. “Leaders need to obtain regular suggestions and comments from internal customers and then take quick action on this information. Employees need to have a voice and know that their input is a valuable part of the company’s overall growth strategy.”
It’s also wise to give franchisees the independence they require to make their own decisions and truly be entrepreneurs. This will empower them to learn from their mistakes and realize that their success or failure is based upon their own actions.
To expand business quickly, consider researching the possibility of hiring franchise brokers. Today, numerous brokers are available to help expand the business in areas one cannot access effectively. Franchise brokers have large databases of contacts at their disposal and can give you a competitive edge for growth.
This is a local-to-global strategy where they oversee regional, national and international franchise-development for companies while the franchise system can concentrate on core-business activities. But when hiring a broker, conduct a background check and be very specific about what is involved. Write down exactly what the responsibilities will be and what is expected from the broker’s services.
Also during the broker selection process, Peter C. King, VR Business Brokers/VR Mergers & Acquisitions CEO, notes that it is important to ask what other franchisors are represented in the same market segment. “By finding this information out in advance you may well avoid a bidding war with your referral fee if the broker or consultant in representing a lot of your competitors,” states King. “Try to find a referral source that has loyalty to your product line and not just an expensive lead source for individuals that would have found you anyway.”
5. Do you have a competitor plan?
Once a franchise system conducts the appropriate research, knows its customers and has the right technology and team members in place, develop an action plan. Review all of the information and figure out regular activities that will keep the firm “in the know” and spark creativity. What are the franchise system and the team going to do on a daily, weekly, monthly and annual basis to stay ahead of the competition?
Write down specific actions to determine what steps are necessary to reach goals. Consider having regular employee brainstorming sessions, attend various tradeshows, participate in online seminars, provide customer-appreciation events, or give presentations to targeted audiences. Whatever is decided, note that a plan-of-action will evolve and change with industry trends, customer input and franchise activity. And not only will the plan help keep competitor strategy at top-of-mind, but it will also inspire creativity and unique products and services.
For example, Dunkin’ Donuts utilizes their Dunkin’ Brands’ Consumer Brand Insight Group to help deal with competition. “This group executes research projects that are beneficial and relevant to a broad audience at Dunkin’ Brands and effectively communicates with consumers to determine if and how we meet their needs,” states Lynette McKee, CFE, Dunkin’ Donuts vice president of franchising. “In addition to extensive consumer research, the group engages in collective discussions with all teams within Dunkin’ Brands to better understand our consumers, our brands, our competitors, and industry trends so that we can make responsible business decisions.”
6. Are you aggressive?
If one wants to be a successful franchiser, it is absolutely essential to have a good work ethic and do whatever it takes to promote your business. It is very easy to reach a certain point of success and then slack off a bit. But this is exactly when your competition sees an opportunity to move ahead quickly and steal potential customers.
To avoid this scenario, take the time to re-evaluate current strategies and tactics on a regular basis. Start by reviewing all of the areas of franchise exposure. Although it can be easy to postpone necessary updates, the materials presented to the public are very important to business success.
Have outsiders examine current information and provide feedback. They can provide significant insight into errors and important issues that may have missed. Also, confirm that the Web site is professional and current. After all, a recent study by the Pew Internet and American Life Study indicates that, “Internet penetration among adults in the U.S. has hit an all-time high and continues to grow.”
With this in mind, spend the money to hire experienced copywriters, graphic designers, technicians, and publicists to ensure that your messages are on target and offer the best impression possible.
Also review all customer testimonials, news items and current activities for potential publicity opportunities. Obtain third-party endorsements through various articles, television interviews and online quotes. This will help build significant and credible, brand awareness for much less than paying for large, advertisement placements.
Take Action Now
It is difficult to stay ahead of the competition in today’s whirlwind, franchise world. However, by conducting the appropriate research, knowing what your customers really want and following a strategic plan of action, it is possible.
Take the time to make this extra effort, and your competition will wonder why they are losing customers to your unique ideas, valuable products and wonderful service. n
John Hoose is the president and founder of Auction it TODAY. He can be reached at 1-866-216-3666.