Building Customer Loyalty for Your Franchise Business
Anthony Davis| Director | Ink on the Run
According to a recent statistic from the NSW office of Fair Trading, when you consider the cost of marketing and advertising for your franchise business it can cost businesses up to 5 times more to gain a new customer than to retain existing ones. Customers are also 90% less likely to buy your products and use your services if they feel that they are not being valued and appreciated. Based on these facts, it is just as important for franchise businesses to focus on retaining existing customers as it is gaining them.
We caught up with Anthony Davis, director of Ink on the Run - a one-stop mobile printer cartridge refilling service - who discussed why it is important to focus on customer retention and the process for franchisees to follow to ensure customer loyalty and repeat business.
Keeping in touch with customers can serve two purposes: it maintains exposure for your franchise business by keeping the business in the front of your customers' minds. Frequent contact also allows you to understand your customers' needs so you can customise your products and services to keep up with market trends.
Making sure your franchise business stays in touch with customers through a customer communication strategy is crucial because continual communication is the key to building customer loyalty. It is important to find out how customers are really using your products and services offered by the franchise and this can be achieved by calling them casually, conducting surveys, and looking for ways to add value to your products and services.
When you are doing your home work on franchise business opportunities talk to the franchisor. Ask the franchisor whether or not the franchise system publishes a newsletter or provides email updates, SMS alerts and Facebook or Twitter updates to existing customers. It provides great value to customers to include new ideas and practical tips for them on how they can use your products and services which can increase sales in the long run. It is important to maintain the frequency of written and electronic communication which will make the customer feel they are part of a network.
In regards to the Ink on the Run franchise business, we encourage our franchisees to build a personal rapport with customers and to respond to their questions (the most frequent being from a technical standpoint). We may communicate recommendations for prolonging the life of their printer consumables or provide tips on how to reduce e-waste.
Another way of keeping in touch with your customers is by making special offers that will also help build brand loyalty for your franchise business. Because your existing customers are important, a suggestion would be to give them a special offer or a loyalty discount that new customers can not get. The key to make this strategy work on a personal level is to make it known that the special offer is only for them. At Ink on the Run, we introduced a customer loyalty program that provides incentive for customers to use our services again and again. We also use a customer referral program where customers receive a discount for the next refill if they provide a customer lead. These types of initiatives improve the relationship with our customers and have improved our brand integrity.
"Purchasing a well-recognised franchise business would have a higher chance of repeat business from customers when compared to buying, for example, an independent business or starting a business from scratch."
Franchisors are instrumental in providing support to franchisees not only in generating new leads, but also in the maintenance of repeat business. The Ink on the Run system provides the opportunity for franchisees to develop their customer service and retention skills through an intensive training program that is run over two days followed by a one-week placement providing hands-on training in customer satisfaction. We also keep our franchisee's customer retention skills consistent across the board by providing procedures and techniques in our operations manuals.
Franchisors should also provide policies on how to handle appraisals and complaints from customers. In the case of Ink on the Run, we use a toll-free number for feedback from our franchisees customers. This way, we are able to follow up on any issues quickly and efficiently from head office in order to maintain a high level of customer satisfaction with our franchisees services.
Purchasing a well-recognised franchise business would have a higher chance of repeat business from customers when compared to buying, for example, an independent business or starting a business from scratch.
The reason for this advantage lies in the power of the network of a franchise system. This is mainly because a good experience, from the customer’s viewpoint, generates positive word-of-mouth, and that benefits the entire network of a franchise system. Also, in a franchise system – compared to an independent business - the single franchisee can benefit from the reputation of the entire franchise network: if a customer had a good experience within one outlet then they are likely to keep using the products or the services of that franchise system at another outlet. This benefits every franchisee in the system because they are all operating under the same trademark.
For the same reason, a bad customer experience in one single outlet could hurt the entire franchise network so that’s why it is even more important for franchisors to concentrate on teaching franchisees the right customer service skills.
When considering your franchise business opportunities, seek out franchisors who have clear policies and strategies in place for customer service and retention. Franchise systems that use the strategies discussed in their engagement with customers will be more likely to experience repeat business from loyal customers and use their marketing spend more effectively.