ADVICE: FRANCHISING – A QUESTION OF RELATIONSHIPS

(Part 1 of a four part series)

Advice on franchising by Pieter Scholtz, Master Licensee for ActionCOACH SA. ActionCOACH is one of the fastest growing and most successful business coaching franchises in the world today.

Franchising, really, is all about relationships. Successful franchising boils down to making sure you develop great, lasting relationships at every level of your business. By building successful relationships you are significantly increasing your chances of success.

Let’s dig a little deeper. Why is it that most networkers are also successful in business? Why is it they always seem to have great relationships with friends and colleagues? Networkers who build successful relationships have perfected the craft of surrounding themselves with people and then listening, really listening, to what they have to say. They have developed these relationships to the point where they have earned the right to ask others for advice.

Good relationships are the lifeblood of business. When it comes to examining the types of relationships within a business, it is convenient to categorize them into external relationships and internal relationships. 

External relationships

The most basic form of relationship any business develops is with those it comes into contact with. The first manifestation thereof is through the well-known, but often poorly executed concept of customer service. It is through the service they receive that customers begin to form their first impression of you or your business, and it is these first impressions that drive your future relationships. 

So, let’s take a closer look at the concept of customer service.  Who is the customer? There are four classes of customers and they are all equally important.

·         The Owners: The business must serve them by delivering an acceptable profit.

·         The Team: The business must serve them by providing salary, recognition and rewards.  

·         The Suppliers: The business must serve them by paying their invoices.

·         The Customers: The business must serve them by meeting their needs.

As you can see, the term “customer” embraces a diverse group of people with widely differing relationships with the business. The commonality between the different groups of customers, is that they all have needs that the business must meet. It is the job of the business to uncover those needs and then meet them.

As each group has vastly different needs, so the relationships you build will be differ. Although you have to ‘sell’ you business to each one of the customer groups, selling your concept to an employee is rather different than selling it to a customer. If your team does not believe in the future of the business, they will seek better opportunities and eventually jump ship. Suppliers wouldn’t offer generous credit terms or prices if the business wasn’t ‘sold’ to them correctly at the outset.

Great customer service is all about relationships, and great relationships in turn are all about good communication. As with any other relationship, a business relationship is a two-way street that operates on a give and take basis. Managing a successful relationship entails operating an Emotional Bank Account. You establish your Emotional Bank Account and accumulate emotional credits by showing trust, or offering goodwill or price incentives. Later, you will be able to draw against your emotional credits as you call on customers to help you achieve your own goals.

So who is your ideal customer?

It’s often said that there are customers, and there are customers. While there are those you would love to welcome back every day, there are some you wish would never come back.  Typically, customers fall into one of the following categories:

A = Awesome

B = Basic

C = Can’t deal with

D = Dead

You may want to only deal with the A’s and B’s, in which case you may as well get rid of the rest. “How?”, do you ask. It is quite simple, you tell them. Establish rules for doing business, then contact everyone in your database and explain that you are repositioning your business and communicate the rules for doing business.

An alternative strategy is to change your pricing policy or the décor of your premises, making it unsuitable for those you are hoping to discourage. An excellent example of such a strategy is a video store that deterred the young hooligans who had taken to gathering there and in the process changed their client base by playing only classical music in store.

In-depth analysis of your business should confirm the 80/20 principle, with 20 percent of your customers accounting for 80 percent of your business. Can you identify your income-generating 20 percent? These are the ones you should be concentrating your efforts on. 

In next month’s issue we look at the concept of “winning customer service”, how to achieve customer satisfaction, and how to attain the ladder of loyalty with your customers.   

Pieter Scholtz is the Master Licensee for ActionCOACH in South Africa. Pieter acquired the master license in 2007 and successfully launched what was an unknown brand into the South African market, establishing 18 franchises in only four years. In 2008, Pieter was honoured with the ActionMAN award at the ActionCOACH EMEA Conference. Pieter is a member of the International Business Coach Institute and COMENSA.

Phone: 086 122 6224

www.actionscoachsa.co.za