11 Strategies for growth
Franchize Directions conducts a number of franchisee satisfaction surveys on behalf of franchisors every year, and in light on the political and financial uncertainty surrounding us, it is not surprising that recent surveys have revealed franchisees’ spirits to be tempered to low. Now is the time when franchisors must encourage their franchisees to keep their eye on the ball and to become growth-minded. While a franchise network offers safety in numbers during uncertain times, they are by no means immune to the impact of political and financial turmoil.
When surveys are facilitated by an independent third-party, franchisees feel comfortable providing honest feedback to be put forward as a collective voice. Like a parent, it is the role of the franchisor to lead and create an environment of security and, above all, to not allow panic to set in. Franchisors must utilise every opportunity to network and share ideas; it is time to appreciate that, irrespective of our business category, we are all in the same economic and political boat.
The Franchise Relationship Institute hosted a franchise operations leadership breakfast on the topic of How to encourage franchisees to be growth-minded and they kindly shared with us the 11 growth strategies to emerge from the session.
Greg Nathan specifically noted the experience of Steve Rafsky, a former franchisee of Padgett Business Services, a 50-year old franchise network with 400 franchisees in North America. Nathan spoke of how the company was facing serious financial problems after venture capitalists bought it and mucked it up and how Rafsky, who was asked to take over as CEO, lead a reinvention process that resulted in record growth, especially in franchisee and franchisor profitability.
During the leadership breakfast the 60 senior franchisor executives broke into small groups to discuss what has been working for them in keeping their franchisees growth-minded. Here is what they shared:
1. Supplement sales ladders with growth ladders
Because franchisees are competitive by nature, many networks publish a sales ladder to recognise top sales performers. However, a growth ladder that ranks franchisees according to their sales or other growth metrics, is a more effective way to encourage, recognise and reward growth.
2. Pick a specific growth theme for a defined period
Select a Key Performance Indicator (KPI) or theme that ties into your marketing or branding and make this the focus for the month, quarter or year. Use your internal communication channels to support this drive.
3. Use dashboards to make data transparent, fun and easy to monitor
Most data collection platforms can create colourful charts that enable franchisees to check and compare their progress on important metrics. More sophisticated platforms can also combine different types of data from various databases into custom KPIs for your business.
4. Reduce the complexity and number of promotional campaigns
Instead of a different marketing campaign every month, which can create noise and confusion, stick to one proven strategy. Then, to achieve maximum benefit, focus on support and training to ensure your chosen strategy is properly executed.
5. Set specific growth goals with each franchisee
To promote commitment and action, ensure these are meaningful for the franchisee and that they align with their personal aspirations. It is also important that franchisees agree to actions with time frames against specific goals. Keep coming back to these in regular catch-ups with each franchisee.
6. Tailor growth messages for different types of franchisees
While new franchisees will want to grow sales, customer numbers and their operational expertise, established franchisees will be interested in increasing their profitability and refining their business skills. Multi-unit franchisees on the other hand may be more interested in improving their leadership skills and acquiring more units.
7. Convert more leads into sales
Often franchisees lose sales by not focusing on obvious opportunities. Offering regular back-to-basics sales training to ensure franchisees and their staff are following your proven sales process, like following up on customer enquiries or paying closer attention to browsing customers, can produce dramatic results.
8. Persuade franchisees to present case studies at regional meetings
Encourage franchisees to present their own local sales growth plans to their peers, along with the results they’ve achieved and lessons learnt. Allowing ten minutes per presentation and five minutes for questions and feedback from the group, will increase engagement and results.
9. A solution- and growth-focused Franchise Advisory Council (FAC)
Many FACs get bogged down with operational problems and gripes. Ensure your FAC is solution-focused on growing network sales and profits, improving the customer experience, and protecting the competitiveness of your brand.
10. Use benchmarking processes
When people are given objective feedback on how their performance compares with others, it stimulates a desire to improve. Providing franchisees with access to metrics and charts that allow them to compare their business’ KPIs with similar businesses, will motivate them to take action to improve their performance.
11 Select franchisees with a growth mindset
As part of your recruitment process, assess prospective franchisees’ proactivity and motivation to grow their business. For instance, ask them about past projects where they grew sales or the performance of a team or business unit. Also ask them to describe their goals and growth plans for the franchise.
We concur with Nathan when he said, “The spirit of collaboration that generated these tips is what I particularly value about the franchising sector”. In trying times particularly, it is refreshing that the strength of the franchise community remains. We all have a duty to participate and contribute, not only to our respective networks, but to the sector as a whole.
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