What’s changed and what’s still the same?

Twenty five years ago although I didn't realise it at the time, I stumbled into an industry that would change my career path in a way that I would never have imagined.

I took up a position in the franchise sector as an opportunity to take time out to decide what I wanted to do with my life. To be honest I didn’t have a clue. 

I was only 23 and this was not a deliberate career change, just an opportunity that came along that was very different to what I had done up until then.

Last year while at the Greg Nathan Franchise Relationship Institute Franchising Summit 2010 held in Sydney last year (August), I bumped into one the directors of that franchise (Rose Vis) and she introduced me to their current support team as a pioneer for their company.

You see back then they were only operating in one city, however within 18 months we started on a journey that took their brand to new areas around Australia & New Zealand.

In 1986 there was not the much choice of franchise systems available back then as there are today. Certainly not many that was within the financial reach of most people anyhow. This in itself is one of differences to today. In 1986 an average house may have been worth say $50,000. The total out lay for this franchise back then was $10,000.  Today an average house now can be worth say $500,000+ and so depending on their equity people can borrow up to say $300,000 for a business opportunity.

Of course there were the Million Dollar businesses such as McDonalds, however not the huge selection available today.

So what did you get for this franchise system back in 1986? We paid a flat weekly fee of only $30.00 and that included the following:

• Annual Yellow Pages advertising
• Local Paper advertising
• Monthly update of our customer list Stationary such as quote pads etc.
• Advertising Flyers. 
• ...and all of these things came at no extra cost.

Over recent times I have seen franchise fees in excess of $10K for the month... and costs such as stationery, Yellow Pages and other advertising are all charged over and above this.

So what else has change over the past quarter century?

As an industry sector we have created many new jobs around NZ. Last year’s franchising survey estimated the franchise industry employs in excess of 80,000 people which is double the 40,000 estimated from the 2003 survey.

The industry is now estimated to be worth $10billion annually in nationwide sales here in New Zealand.

 Bill Vis of  VIP

Home Services 

Our ability to measure performance has enabled us to increase efficiencies in marketing and other costs. For example measurement of achievement has helped refined the way we do business, for example, measurement in 1986 was something like say we printed 100,000 quote sheets for the year, and yet we only brought on 10,000 new customers.

The assumption Bill Vis of VIP Home Services had back then was that the franchisees conversion was poor; he was right of course, however there was no accurate way to measure this. I can remember we asked  franchisees at my very first owners meeting ...out of every 10 quotes how many would you convert?

Most said 7-8. Reality was closer to 2-3. These days technology takes care of this and other Key Performance Indicators.

We had no cell phones or any way of contacting owners when they were out and about. Think about it, with iPhones &  Blackberries they can now not only take calls where ever they are but now they can even email while having a coffee on the side of the road. These days you can take an Eftpos payment on the side of the road.

In my early days cash & cheques were the only forms of payment. Nowadays it’s unusual to be paid by cash or cheque. Running a set of accounting books meant exactly that. We would write up our daily sales & expenses up in our books. Today we use an accounting program such as MYOB to enter financial data.

I remember in 1996 when I was working for one of New Zealand’s leading franchise consultancies in Newmarket, the 2 directors had computers the receptionist had a computer and all remaining staff (all four of us) shared the remaining computer. No email though.

Every franchise system I have been involved with have been set up with good marketing systems that generate huge possibilities for good income for their franchisees and sales team. Sales conversion is the difference between doing extremely well for your self and just getting by.

I have mentioned how technology has improved the capabilities for both Franchisee and Franchisor, and how costs have changed throughout the years, however what has stayed the same over all these years?      

People... In-particular Franchisees.

They haven’t change at all. The expectations of Franchisees will generally be high in terms of what they get as far as "bang for their buck." 

However, success of a franchise system needs to be a two way street, and what I mean by this is that Franchisees should not expect to have an unlimited flow of sales leads to blow off as "just an enquiry."

The franchisor has an expectation that a reasonable amount of these leads will be converted into sales and not fobbed off as "another tire kicker". 

To me sales conversion is about keeping your brand stronger which should ultimately keep your competitors weaker. So, in an endeavor to achieve better results for everyone from Sales Person, Franchisee to Franchisor is the reason I have created this blog. 

I look forward to you feedback.

Greg Longstaff
Business Development Consultant
Franchise Development Expert

Phone +64 (09) 307 7860 

Find Em' Keep Em'

Some of you may remember in the late 1990’s New Zealand Post launched a program called Find em’ Keep em’. This was a program they set up to encourage businesses to use a direct marketing campaign which they were promoting for businesses to utilise as a way of staying in touch with  both prospects and customers. Their marketing approach was all about using direct mail (funnily enough) and managing your data base in a way that you constantly stayed in touch with your data base.
Of course I am in very much in favour of this as a form of marketing however the difference between now and the late 1990’s is that we have more effective ways of keeping in touch with clients/potential clients through e-marketing etc. Direct mail today needs to be very defined and targeted.

The message of Find em’ Keep em’ though is still just as relevant today as it was then. Perhaps even more so. I am continually reminding businesses to go back over their data base and calling customers who have not used them for over say the past year or more. In today’s market you need to be consistently keeping in touch with your customers and prospects other wise the next time they notice another supplier they will look at the possibility of finding better service elsewhere (notice I didn’t say price).

There is enormous potential to generate more business from people who have previously used your service. You will have all heard the saying “it’s easier to maintain a customer than to find a new one”. So when you find a new customer make sure you do everything you can to keep them!

How regularly do you call back to your customers/prospects? Let me tell you about a promotions business I have previously used. To be honest I didn’t like the rep. She use call (in person) three times a year, and phone in between to see if I needed anymore uniforms (being a retail business we had a constant turnover of staff).

On the visits when she would call I would always get a promotional product as a gift (3 times a year). This I believe made it harder for me to look around for another supplier in the near future. By the time I was ready to consider finding another supplier I would get another call in person (and another gift).

I recently followed up with a lead I gave to one of our team. It was great to know they had approached the key contact I put them onto. Although the job had been organised prior to enquiring, their current supplier nearly lost the job because they took so long to complete the order.

My contact said he will keep us in mind for any future work. However the next time could be 3, 4, 6 months from now. I can tell you he will forget about us or even get our name wrong unless our local sales person keeps in touch 3 -4 times a year.

Show them you value their ongoing business and don’t give them a reason to change suppliers. Keep in touch regularly!

Business Growth Tip - Open door vs. closed door policy

It’s almost a cliché in business. Managers saying, “I have an open door policy.” But what does this really mean and what are the implications of this?

In my first management role I took this advice at face value and quickly became frustrated with the number of interruptions I experienced with my team constantly asking me questions. I started arriving at work earlier and/or leaving later to take advantage of the quiet times when everyone was gone, when I could be more productive. This conundrum is known by another management cliché called “working longer, not smarter.”

Some years later I attended a presentation by Kinkos founder Paul Orfalea. “What’s all this c… about open door policies?” he said using language that got everyone’s attention, “Close the f….. door, or you’ll never get anything done!” Swearing aside, I deduced that he is a billionaire and I am not – and he clearly knows something I don’t.

Actually, I came to realize that open door vs. closed door is not an either / or choice. To succeed as a manager you need to do both.

As Peter Drucker advised, effective executives know how to reduce interruptions. Little bits of time - 15 minutes here and there spent working on a project are not effective. Effective leaders carve out 2 hours of uninterrupted time every day. This is usually enough time for you to get the important things done. Set a specific “closed door” time window; when you will not take any meetings, phone calls, or Instant Messages and train your team to adhere to this.

And make sure you use this 2 hour block of time to work on your strategic priorities – not checking and answering emails. Pick the most important item on your to-do list and stick with it until it is done. Get in the flow and stay focused!

You need to balance this by setting aside “open door” time windows. Times when your team members know they can contact you between these hours and discuss their key issues with you. Chances are, because you weren’t immediately available, they have taken the time to think through things and already resolved the issue they had.

Tip: beware the phenomena known as “reverse delegation.” This is where a team member comes to you with a problem or idea and asks, “What do you think?” Your subconscious urge will be to make a decision, yet by doing so, you unwittingly make your team dependent on you for decision making, and miss a vital opportunity to coach and grow your people. Carving out uninterrupted time requires discipline – and as with most endeavors, discipline is a prerequisite for business execution success.

Article Source:  gotomarketshow.com