February 2007
Is Buying A Franchised
Business Right For You?
Delivering Customer Service
Via Email
The Ad Didn't Work. What Now?
Get Specific When You
Advertise
 
Is Buying A Franchised Business Right For You?
There are a lot of franchise opportunities available
that cover almost every conceivable area of the
commercial world. They offer the chance to get
into a business of your own with products,
systems and promotions that have been tested and
proven even before you start.
A franchise can even be a way of "buying a job" for
those with retirement savings or other sources
of capital to leverage. But is it right for you?
Here are some of the pros and cons that you need
to consider.
Five big positives
- You are your own boss and you own your own business
- You lower the risk of failure by starting in a business that’s already been proven elsewhere
- The business comes to you as a package.
Usually everything from the products to the look
of the business and the operating system is
included in the franchise.
- The franchise has a name people already
know. You don’t have to build up recognition
from a zero base.
- You have the assistance of the franchiser in sourcing products, in providing training and in
your marketing
Five big negatives
- You have to follow the directions of the franchiser in just about every aspect of the
business so you’re not really independent
- A percentage of everything you sell usually goes to the franchiser on top of franchise fees
and a contribution to shared promotional costs
- Your sources of supply are limited to those stipulated by the franchiser
- If the franchiser has financial problems it can impact on your business as well
- If there’s a disagreement between the franchiser and yourself, it’s possible for your
franchise agreement to be terminated (or not renewed) and put you out of business
So what’s the answer?
Understand that no franchise comes with a guarantee of
profits. Every business is an independent
operating entity that will largely succeed or
fail on its own merits. Although the franchiser
dictates the terms on which you trade, your own
input into the business will have an influence
on the bottom line.
You have to follow someone else’s way of doing
business. If you can’t see yourself doing that
(and many very good managers are simply too
independent to accept this) then a franchise
isn’t for you.
Start by talking with other franchisees. Ask them how
they feel about their own business, about the
franchiser and about the money they’re making.
What are their thoughts on the future of the
franchise? Are they getting value for money from
their investment?
Examine the franchise agreement carefully. Make sure
it’s not all slanted in favor of the franchiser
The best franchising relationships are
reasonably equal partnerships although it’s
normal for the franchiser to protect their
interests from franchisees who let down the
system.
Get an accurate picture of the costs of the franchise
– what it will cost to set up the business and
what ongoing fees, levies and so on have to be
paid. How long has the franchise been going and
how successful is the franchiser’s business?
Finally, do you have enough capital to enter into the
franchise? There’s nothing worse than finding
out you’ve exhausted your resources just as more
are needed to keep things going. Franchises are
never a cheap way to get into business, but they
are a way with a few more certainties than going
it alone.
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Delivering Customer Service Via Email
Studies consistently show low levels of customer
satisfaction with the ways in which businesses
use email. Too often companies seem to be using
email as a means of avoiding other forms of
contact with their customers and their customers
aren’t pleased. Their most common complaints
include:
- No confirmation that their email had been received
- No reply or only a late reply received
- Inappropriate/irrelevant reply received
- Reply can’t be understood
Email based customer service has been a let down for
most customers. They expect their communications
to be given the same attention as a letter or
telephone call and instead feel that their
emails have largely been ignored.
Customer feelings are confirmed by a report on Small
to Medium Size Enterprises (SME) use of email by
BenchmarkPortal, a leading source of CRM best
practices for contact centers. Conducted in
early 2005 the study evaluated 147 SMEs across
five sectors: retail, travel and hospitality,
financial services, ebusiness, and hi-tech
manufacturing. Some of their key findings were:
- 51% of the companies did not respond at all,
- 70% of the companies failed to respond within 24 hours,
- 79% of the companies responded with an inaccurate and/or incomplete answer
Astonishingly, 40% of online-only businesses, a
category that includes online recruiters and shopping comparison sites, failed to reply to
customer email inquiries!
And what do customers do when this happens? The answer
is simple - they go away. Forrester Research
studied customer behavior and found that 70% of
online customers will go to a competitor if they
don’t receive a timely response from a company.
Only 22% of online customers return to a website
after a negative experience.
There are a range of solutions that smaller firms can
implement to capitalize on the cost savings and
timeliness of emails without turning customers
away.
- Automatically respond to all emails received:
People will be more willing to wait for a reply
if their initial communication has been
acknowledged. Include a commitment to act on the
issue and when you will respond fully.
- Monitor email communications: A monitoring
system should be set up that tracks progress of
incoming emails and their responses. It should
initiate an alarm for any message that hasn’t
been responded to by the stated maximum time.
- Have a suitable response structure: Emails
should be answered in the same manner as any
other form of communication – politely and with
the intention of retaining the customer.
- Make use of a Frequently Asked Questions (FAQs)
file: It’s surprising just how many customer
communications are for the same reason;
inquiries tend to repeat themselves. Create a
database of your most common questions and
answers and place them on your website. It can
also be used as a source of content for
employees preparing responses to customer
emails.
- Analyze trends in customer communications: A
sudden upsurge in complaints about a particular
aspect of your company or a rise in inquiries
about warranties can be pointers to important
trends that are beginning to develop. Analyze
all incoming customer communications to spot
these trends and keep on top of them.
Email is one of our most valuable channels of modern
business communications. It can bring real
savings in time and money when applied in areas
where customers and companies interact, but only
if it’s used wisely.
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The Ad Didn't Work. What Now?
Small businesses aren’t big advertisers. They can’t
afford to be, so when an advertising campaign
doesn’t deliver results it’s especially painful.
The good news is that a little knowledge can go a long
way to helping make sure that the next
advertising campaign gets better results.
First look at what advertising can and can’t do. What
it CAN do is:
- Communicate information about a business to
whomever is watching, reading or listening to
the advertising medium that’s selected
- Generate responses from those who see or hear it
- Create an impression that lasts longer than
the newspaper or magazine or radio spot
What an advertisement CAN’T do is to actually sell
something. Advertisers can get a tremendous
response without making a single sale. Does that
mean the advertising has failed? Maybe so, but
probably not.
First, there has been a response to the ad if somebody
saw it and took the action called for in the
advertisement. By the way, if a small business
runs an ad without a "call to action", it’s
almost always wasting money!
Always include a way for the reader/viewer to respond
to the offer – Come in today, Call us
now, or Send today for your free sample
are all examples of calls to action. They should
be clearly stated, quickly understood, and easy
to act on.
Obviously if a business runs an advertisement (with a
call to action) and gets no responses to it, the
ad hasn’t worked. Maybe it was an unexciting or
uncompetitive offer. Maybe the headline failed
to communicate value. Maybe the copywriting was
confusing. Maybe the advertisement appeared in a
medium that wasn’t seen by any prospective
customers.
When the wisdom of hindsight is applied to the matter
of why it didn’t work, chances are the answer
will be apparent or be figured out pretty
quickly. If there’s still no obvious reason and
the offer made in the advertisement is both
attractive and competitive, try changing an
element like the headline or the illustration
and see what happens.
One solution to doubts about advertising is to test an
advertisement. Run it to see if it generates a
response, then run it again with an element
that’s been changed to see which works the best.
A different headline can really affect the
results.
This may sound like an expensive process but it is one
way to make sure that advertising achieves the
maximum possible response. Keep on testing until
the process has created something that’s really
powerful.
Another test is to change the advertising medium to
see which generates the biggest response. Most
media proprietors have accurate audience
details, so if an advertiser is looking for a
specific target they can review the available
statistics to find out which delivers the best
value. Usually this is determined from the "cost
per thousand" – how much it costs per 1,000
members of the target audience - that gives a
yardstick for comparisons between alternatives.
When advertising in the print media, get samples of
all the publications that seem appropriate and
see where competitors regularly promote
themselves. They’re probably getting a response
or they wouldn’t be there.
To evaluate a publication, give a call to some of the
existing advertisers who appear in it and ask
them for their opinion. What kind of response do
they get? How does this compare with the sales
they make? There are big differences between
advertising media and it’s essential to be in
the ones that are generating responses for their
advertisers.
If the advertising does get a response – people call
the business, go to the website, walk in the
door – the ad has done just about all it can do.
If an advertisement is placed in a local
magazine with a circulation of 3,000 and it gets
150 responses this would usually be considered a
pretty good response (5% of the circulation has
responded).
If none of those 150 people actually buys something,
the campaign has had a bad result but not a bad
response. Look somewhere other than at the
advertisement for the reason why nothing was
sold.
Take a good look at existing systems for handling
responses to advertising; has the sales team
been told when the advertising is appearing and
what the offer is? Are they given sufficient
information and training to sell the offer when
the advertising generates a response? If
prospective customers call up about the offer
but there’s nobody on the other end of the phone
to make the sale, then the advertising
investment has been wasted.
If advertisers are willing to invest the time and
money it takes to discover the best
advertisement, best offer and best medium,
they’ll find their advertising works a lot
better than it ever has before. That is, they’ll
get more responses than ever before.
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Get Specific When You Advertise
How many advertisements do you see that just scream
out: We give you the best prices, or
Our service is better? The simple answer is,
too many. It’s easy to make a promise like this
in an advertisement and every newspaper is full
of them, but they can be a real turnoff to an
aware public who is interested in finding value
and proof that you can offer it.
Consumer research has consistently shown that people
perceive most businesses as having similar
relationships between their pricing and service.
They know that there are top of the line
suppliers that excel in service and charge
higher prices, just as they know that there are
cut rate suppliers with lower prices and lower
standards of service.
But they also perceive that the difference in pricing
between the two levels isn’t all that great, and
that no business will stay around long if its
service isn’t at least acceptable. That leaves
the important question of how you can stand out
from the competition while still trying to
communicate your own value proposition.
Tell them what you're going
to give them
If somebody’s never been a customer of yours
previously, your advertising has to be very
specific in painting a picture of what they’ll
find if they buy from you. It’s essential to
convey your uniqueness rather than just trying
to say We’ve got good prices and service.
What is it about your business that will interest a
prospect? What will you do for them that nobody
else can do? Or, that nobody else is saying
they’ll do?
It begins by finding out what your customers and
prospects really want, then telling the world
that you’ve got it. What’s really important to
them that will induce them to purchase from you?
The biggest thing to keep in mind is that your
advertising has to be about them and not about
you. Be specific about what you’ll do for them –
is it better fitting clothes or a smoother
running engine? That’s what they really want,
not just bland statements of price and service.
Customize your benefit
Once you’ve identified the basic benefit that they
want and you can provide, augment this with an
offer that’s specific to your business. Take a
hypothetical situation where a person’s
refrigerator has broken down and a replacement
is urgently needed.
That person looks in their telephone directory and
sees two advertisements for refrigerators. The
first says:
Award-winning electrical appliances. Great
service and the best price.
The second advertisement says:
Electrical appliances delivered free. Same-day
service to most areas.
It’s obvious that winning awards and vague promises
about service and price aren’t nearly as
important to somebody without a refrigerator as
having it delivered quickly and especially if
it’s free. There’s no question about which
advertisement is going to be the most appealing.
The best way to stand out from the competition is to
base your advertising on what your customers
really want and how you’ll provide it to them.
Think about this the next time you prepare an
advertisement and you’ll be using words your
customers want to hear.
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