The Significance of Understanding the Customers Needs When Franchising

Over the years big and small companies have made enormous amounts of profits through franchising their businesses. The successful ones remained operational and unsuccessful companies ended up closing shop.

However, we need to be aware that there are metrics that determine the survival of a franchise in the business industry, these include;

  • Commitment to deliver on promise
  • Availability of experienced franchise support
  • Competency of staff
  • Carefully planned processes
  • Management and mitigation of internal squabbles
  • Depth of understanding of the customers needs

Below we detail some simple processes that will give more clarity on the significance of understanding the customers needs when franchising.

RELATIONSHIP MUST BE ONGOING

Firstly, it is essential to know that the customer relationship is developed as a long term goal, not for short term gains. In most instances an attempt at a once-off, short term relationship tends to be deemed as selfish, as it only seeks to acquire benefits for a limited time period and communication is immediately ended once the company has achieved what it wanted from the customer.

On the other hand an ongoing, long term relationship with customers tends to be the most effective and beneficial one when it comes to franchise businesses as they are more reliant on sustainability. Developing a long term relationship does not happen overnight, as it requires time and the effort of learning and understanding the transforming needs of customers. The best place to start for an ongoing relationship is the development of TRUST, specifically the customer needs to trust that the business is not only going to be able to meet their requirements, but that it will always be trying to do so in such a way that will ultimately benefit the customer. In terms of a franchise, acquiring this trust from their customers is much more difficult if the same trust is not present between the franchisee and the franchisor. The franchisee has to trust the franchisor completely to deliver on its promise to offer services such as ongoing training service, operational support, marketing support, legal support and etc.

Both the franchisor and franchisee ought to make it a point that the relationship they already have must at all times be cultivated and maintained, although this is dependent on a two-way beneficial process or a mutually beneficial relationship. Franchisors must move away from engaging with the Franchisee only when there is something they want or require, they must also engage when everything is on track. This is why it is critical to draft and implement a communication plan & strategy, meaning what, when & how does the franchisor communicate to the franchisee.

When problems arise both parties must not shy away from accountability, which often leads to the minimization of engagement, which often only makes any existing issues worse.

MANAGING TRANSFORMING CUSTOMER NEEDS

Over the recent years technology and the number of rising competitors has played an integral role in fast-tracking the transformation on the needs of customers. The franchisor ought to be aware that the customer’s needs can be satisfied using multiple methods and that does not mean the same method used today will work a year later, as a result innovation is of critical importance to the further advancement of any business.

Franchise businesses need to invest their time and resources monitoring the customer’s transforming needs through studying their behaviour and attitude towards the business. This can be done using various tools depending on the requirements such as; monitoring trends, examining buying behaviour, observing the customer engagement processes, a sales study, market and brand research as well as research on competitors.

A good example to learn from is ACDC Express Franchise, through its implementation of product delivery / transportation strategy which has now been in place for the past few years. A number of customers who had challenges with transporting purchased products and the logistics of waiting in a long queues have now come to an end. The impact on the transforming needs causes franchises to reposition and align their strategies in order to remain profitable and relevant to the market.

When franchise businesses do not take time to study the pattern of change they miss out on delivering to the needs and desires of the customer. What happens next is that customers tend to shift to the nearest competitor who is offering a better deal.

Franchise businesses that place their customers interests at the top of their priorities stand a better chance of performing well. Remember that the customers remain at the centre, serving as the guide to franchise development and innovation.

IMPLEMENT PLANS AND STRATEGIES

Franchises must use market research in order to address these challenges. At times you find brands implementing plans and strategies that have absolutely nothing to do with addressing the challenges at hand. It is preferable for franchise businesses to develop strategies that focus primarily on customer retention.

It is important to take note that the basic principles of customer understanding applies to every business and not a specific sector. In most instances a franchisor spends so much time making promises that they are not capable of keeping, making the right noises, yet end up with unexpected results, as the franchisor is attempting to sell brand attributes that are not genuine to the experience that they are able to provide for the franchisee.

Fig. 1 Customer Relationship Model:

Above is a simplified customer to business relationship model. This process illustrates a simplified method that any franchise business can use as the basics on rules of engagement. The franchisee ought to know that there should be a relationship that is established with their customers must be nurtured as an an ongoing relationship. Secondly the franchisee must be aware that the customer’s needs cannot be considered as fixed in place, there is always a potential for change in the customer’s needs, which if handled properly, provides room for more opportunities.

The most successful businesses are those that take advantage of the comprehensive customer data they have at their disposal. We consider it a challenge that for any franchise business TRANSFORMATION must be seen as an opportunity for growth. Franchise businesses that eventually falter are those that allow themselves to turn a blind eye on the transforming needs of their customers.

Businesses must strictly avoid complaining about customers with shifting needs and fickle desires, but must take it as an opportunity to continually monitor the customers position and establish improved plans on how to keep the existing and potential customers from going over to a competitor.

As a reminder customers are not necessarily after a brand, but the experience and services associated to the brand.

In summary, the outcome of good customer experiences is determined by a thorough customer understanding and willingness to implement plans and strategies that will create and nurture a sustainable customer relationship.