Picking a good franchisor and buying a franchise is only the beginning. Today, franchisees in almost any industry have to fight hard for customer attention, in order to keep themselves afloat and generate enough revenue to continue operating their business.
While it’s true that your franchisor should, can and will do everything in his power to help your franchise business succeed, there are a number of things that every franchisee has to do himself, in order to stay profitable.
Choosing a good location for your franchise is absolutely vital, no questions there. But if you don’t know what to do with your business, even if it’s situated in the best spot possible, you are going to lose money.
Economical shifts happen frequently, and it’s hard to stay competitive in this unstable environment. This is the primary reason why franchisees start to panic, which is the worst enemy for any business: panic leads to making wrong decisions, which in turn can lead to disasters.
Slashing prices and slashing staff are among the most common, wrong decisions that franchisees make when faced with economic difficulties or unstable situations. The thing is that both of these are temporary solutions and none of them leads to anything good in the long run: when you get on the road of cutting “unnecessary costs” wherever you can, it’s hard to leap off that road.
1. You are not alone
Now the beautiful thing about franchising is that franchisees, compared to other types of businesses, have the support of the franchising system behind their backs as well as the ability to connect with other franchisees who share the same goals, to craft a strategy that will benefit everybody.
When franchise territories are defined correctly and there is no competition involved, the picture changes drastically: each victory, however small it may be, will benefit the brand’s equity, which strengthens the franchise as a whole and thus, supports franchisees as well.
2. Keep a cold head and get your facts straight
Whenever you are faced with economic difficulties, don’t lose your head. The facts may not be as bad as they appear. Economical shifts impact the system differently, and while some areas may suffer more, your particular area might still be doing okay compared to the rest of the country or even the neighboring states.
Also, checking out your business data will help understand what can be done to improve the situation. Pessimistic and conservative approach isn’t going to help. The problem is already there, you aren’t changing that part anyhow. The sooner you stop thinking about the problem and get to digging for solutions though, the better off you will be.
Also, don’t believe the general talks you hear everywhere. Every industry is different in terms of growth and opportunity, and there are certain actions that you have to undertake in each given scenario, in order to stay one step ahead of possible trouble. Take a close look at your industry, check your facts and data and try to figure out the dynamics of your industry: what you need to do today in terms of strategy and what will you need six months/a year from now. Once you are armed with the necessary knowledge, you can start growing your franchise sales.
3. Talk to your customers, they know better
Direct communication with customers is essential for any business, irrespective of the industry. The important thing to realize is that if customers don’t come and talk to you themselves, that doesn’t mean they don’t have anything to say. Most of the times, they are waiting for you to make the first move.
Surveys, store walks and friendly input from your staff are all easy and effective ways to know what your customers think. After all, your business, sales, revenue and profits directly depend on your buyers, and if you have a chance to understand what they really want, why not just take it?
Also, if you have a competitor nearby (and chances are that you will have more than one) take a few minutes to walk around their store and look at what they do. It’s easier to spot mistakes when you look at somebody else’s job, especially if it’s the same kind of job that you do. Additionally, spending just a few minutes in their store can foster ideas of how you can improve yourself, in order to offer the best possible customer experience to your clients.
4. Help your buyers spend more
Offering discounts is considered to be an effective marketing move, since it drives tons of people to your store. However, there is no guarantee that your customers will return to your store once the promotional period is over. For all you know, they might just be coming to your store to get a product at a cheaper price, but as soon as you go back to standard pricing, they will turn away and look elsewhere.
The thing is that the value your business delivers to your customers ends with your discount period. In this case, people come to you not because they love your store, or your brand, or your service, but because you offer the cheapest price. Once you stop delivering that value though, the sales numbers go down with it.
Constant discounts turn to be a loser’s game in the long run and it’s going to be much harder to climb back to normal after you go with this technique. If you really want to drive more sales, you should consider putting in the time where customers want to spend money and improve their experience.
For example, you can get a few extra cashiers to work on weekends or special occasions, when you know that a fairly large amount of people is going to be visiting your store. Making the queues shorter and improving customer experience are excellent ways to deliver value to customers, a value worth returning for.
Another example. There are a huge number of cases when a customer walks into a store looking for a product ready to buy it on the spot, but he gets turned down for various reasons: the product is out of stock, the price is too high, an employee is unable to find it, etc.
In situations like these, never let your customer go after his initial goal wasn’t met. Offer similar products or substitutes, another product that belongs to the same category and might be useful for the customer, etc.
Oftentimes, people will consider what you say and just because they have the money with them, they will buy it. You aren’t going to upsell another product to a person every time, but this doesn’t mean you shouldn’t be trying.
There is another example, one that has happened to pretty much everybody who has ever had a beer. When you finish drinking your first or second mug, the waiter usually asks whether you want another one, and most of the times, you say yes, even if you didn’t have the intention to order one more drink just a few moments ago. Another beer – another sale, right on the spot.
5. Educate your customers and keep looking for ways to improve
Educating your customers helps increase the value of your brand in their eyes and makes them want to do business with you as a supplier of the goods they need. The more you can teach your audience, the more they will value you as a brand.
Finally, never stop looking for ways to improve yourself. There is always something more you can do for each buyer, and even a tiny thing can go a long way. You should be looking for ways to sell more to more people, not just try and maintain whatever sales numbers you have.
The key to selling more to your customers is thinking like them. Do that and you will be surprised at the number of ways you can get people to spend more.