For most owning a franchise offers numerous advantages over an independent business. Things like brand awareness, proven business model, initial training, ongoing support, etc. When researching a franchise these are all things you need to consider but of them all there’s one that needs to be at the top of your list… A serious marketing machine!
The truth is most of us can be taught to do just about anything. Whether it’s cooking delicious food, cleaning an office, or restoring someone’s home from water damage a franchisor can teach just about anyone with average intelligence how to do it. The truth is with most business owners the biggest challenge is not providing the products and services, it’s acquiring the customers. Yes, like most other skills we can learn to market but a lack of marketing or incorrect marketing is sure to lead any business to failure. Trial and error marketing can be costly and ultimately do more harm than good and marketing in one industry may be different than marketing in another. The point is that unless you are a serious marketing guru you need to make sure that the franchise you invest in offers a top-notch marketing machine.
When you research a franchise you need to ask specific questions of both the franchisor and several of their current franchisees about their marketing machine. Don’t buy smoke and blue sky! Buy into a system with proven results. Here are some specific questions you need to ask your potential franchisor.
1. What will the franchisor do to help me build my brand?
Brand awareness is a very powerful competitive advantage and one of the most compelling reasons for choosing a franchise. What is your potential franchise doing to build its brand? Only a small percentage of franchises are household names like Subway or Mcdonald’s but you want to be a leading brand in your industry.
2. How does the franchise help me acquire customers?
Without customers a business can’t exist so obviously this is critical. What does the franchise do on the franchisor level to help you acquire customers? What sort of system do they provide? How do they teach you to acquire customers on a local level? Do they have personnel who will come to town and help you gain momentum in acquiring customers?
3. Does the franchise help me acquire the right customers?
Acquiring customers is important, but acquiring the right customers is paramount. I have actually seen franchises with a so-called marketing machine that acquired $50 customers at a cost of $100 per customer. While the franchise felt they were growing its marketing machine was actually putting them out of business. A real marketing machine acquires the right customers at a cost that makes a profit.
4. How does the franchise help me retain customers?
Depending on your industry it can cost a business up to 6 times as much to gain a new customer as it does to retain one. Not to mention depending on why you lose a customer could be damaging your reputation thus making it even harder to acquire new customers. Ask your prospective franchisor about their methods of retaining customers, creating repeat business, and up-sells to increase your revenues.