Grow From Here

A few days ago, I was talking with Greg Nathan from the Franchise Relationship Institute about his software product that helps franchisors select franchisees who are the most likely to succeed.

In brief, the Franchise Relationship Institute does this by benchmarking characteristics & traits of past successful franchisees and then providing a system that compares new applicants with those traits and characteristics.

Greg is a trained psychologist and works strong in the scientific tradition; hypothesize, measure, analyze and then compare results with hypotheses.  One of his current projects is the validation of the exact extent to which is product is successful in predicting new franchisee success and, not surprisingly, his results will be fact based & very precise.

Listening to Greg talk about the validation project, I was struck again by how vital these feedback loops are to franchise growth.

Successful franchises implement the best programs and systems they can come up with, but then they measure, analyze and adjust based on the numbers and results (rather than what they ‘think’ is happening).  And the faster they can complete this cycle (and then start it up again), the more likely they are to be successful in the long term.

From 1-800-GOT-JUNK?’s Net Promoter measurement tool to calculation tools for attrition rates to sales performance indicators, business growth is fueled by knowing exactly what is actually happen so the best actions can be taken.  One of our customers ties client satisfaction records into payroll bonuses for their employees, which is a great motivator to get everyone in the company on board in trying their hardest to keep the clients happy – you can imagine what that has done for their referral and return customer rates.

What are your best scientific tools to create feedback loops and do more of what is working & change what isn’t?

Katryn Best Practices, Business Growth, Franchise

We’re doing lot of work right now with systems that automate accountability systems for franchises.    I always like to find interesting quotes on topics that we’re working on, and yesterday I came across the best description of accountability - it’s from Michael Armstrong, former CEO of AT&T.

“The ancient Romans had a tradition: whenever one of their engineers constructed an arch, as the capstone was hoisted into place, the engineer assumed accountability for his work in the most profound way possible: he stood under the arch.”

 I love it.  Accountability is such a popular phrase, but how often does one’s life actually depend on being accountable?  And what better definition is there?

Katryn Fun, Tips

I hear the word ’systems’ and I get excited.  I see possibilities to set things up that make life easier for people & that allow them to focus on what they need to focus on without trying to remember the little details.  I think about setting people free to do what they do best (our company vision).  I think about how it’s the little daily stuff we do that can really change our mindset.

I know that not everyone shares my delight when they hear systems.  Some people think about technology, others think ‘what a hassle’, others just glaze over.  One of the things I enjoy about working with franchisors is that they tend to share my joy in systems.

Out of curiosity, I recently went to Wikipedia to look up the definition of a system:  “a set of interacting or interdependent entities forming an integrated whole.  Systems have structure, behaviour and interconnectivity.”  It almost sounds like poetry to me.  Structure, defined behaviour, and interconnectivity – what better way to grow towards a goal and make sure that each of the pieces is taken into consideration.

However, lyricism aside, good systems are critical to a franchisor.  They increase efficiencies, allow the franchisor to manage the brand effectively, improve communications, and help to increase franchisee satisfaction which then increases your credibility in the marketplace, and the value of your franchise.

Systems include the software used to manage operations, as well as the various forms, checklists, operational manuals, policies and procedures and franchise wide processes.  Systems are also the set of rules that govern behaviour and structure.  The design of effective systems is an entire science in itself (systems theory) which ties into operational behaviour and strategic planning, as well as change management processes.

During periods of growth, the strength of the franchise systems becomes even more important as new people are being brought in at an increased rate and the time available for each task decreases.  Often small gaps in systems become much more expensive or unmanageable during periods of franchise growth.

Franchise systems can include:

• Policies
• Procedures
• Departments
• Corporate (head office)
• Economic
• Cultural (relational)
• Production
• Distribution
• Communication
• Information Distribution
• Sales
• Marketing
• etc, etc, etc

 Developing a system can be challenging as it requires a degree of abstraction and a strong understanding of how all the pieces tie together and how these relate to the business strategy.

Just today I was meeting with a franchisor who had been struck by a very critical system that was suddenly discovered to have been missing from the franchisees’ operations.  “I had it when we ran our first office, but I was absolutely shocked to discover that they didn’t have it.”  Systems that depend on people remembering or doing the right thing require constant energy & attention to maintain.  This is an ongoing struggle and it is easy for systems to fall away over time.  But automating a system not only means the people can put their attention elsewhere (hopefully into growing the value of the franchise) – it also means that the system will be maintained automatically and flagged if it disappears.  What a great way to grow your business!

Katryn Best Practices, Business Growth, Franchise

One of my delights these days is HARO – Help a Reporter Out.

It was set up by Peter Shankman, and if you sign up, you get three emails a day full of queries from reporters who are looking for sources for stories.  It takes a minute to scan through & see if any of the requests for sources relate to your business or your field of expertise.

I also use it to find PR opportunities that may relate to my clients’ businesses.  Some days, there’s nothing in there at all that reminds me of any of our customers – other days I’ll send off 3 or 4 emails to different people from one HARO email.  One of our customers followed up on a PR opportunity I sent him, got invited to speak on a radio show, and even before the radio show, had landed a new client through the press release about the radio show!

So if you are looking for PR opportunities in a particular field, or you have clients who might be, and you can spend 5 minutes a day skimming through three emails, it’s a great opportunity – and it’s free.

Share your HARO success stories with us if you find it’s working for you!

Katryn Time Savers, Tips

I enjoyed Dr. John Hayes’ recent article detailing with humour how bringing in too many customers was costing a franchise money…  He has kindly agreed to let me repost his article here – the original can be found on his blog.

Just Because The Franchise Marketing System Drives Customers To Your Door Doesn’t Mean You Should Buy That Franchise

If you own a business, you know there are “right” customers and “wrong” customers and while you may not (yet) know how to tell them apart before they become your customer, you know that the “wrong” customers deliver the least value and create the majority of problems in your business.

Who is a customer?
Customers (or clients), by the way, are not just the people who buy your products and services. They also include your employees, and if you’re a franchisor, they include your franchisees.

Be careful of expert advice!
So I read a passage on a blog that provided “some helpful hints on how you can spot a great franchise marketing system” and the first hint was this:

Customers are brought in the doors. This is what every business boils down to in the end, whether or not the marketing system brings in the customers. After all, that is where you make your profits.

Taking the express train to bankruptcy
And I thought to myself: Or that is where you lose your profits, your money and ultimately your business!

It’s not enough to drive customers through the doors of a franchise, or any business. You’ve got to drive the “right” customers through the doors! Most businesses, and most marketing systems, do not fulfill that objective. And that’s one reason why businesses struggle and fail.

So don’t buy the franchise because “the marketing system” drives customers to the door!

Happy franchisees make the most money
To wit: Some years ago the new CEO of a major retail franchisor asked me to help his franchisees attract more customers and ultimately generate higher revenues so that (a) the franchisees would earn (and keep) more money, and (b) the franchisees would pay higher royalties. Since the beginning of franchising, franchisors have known that franchisees who make and keep the most money are the happiest franchisees!

So I spent several weeks working with a few franchisees to find out more about their customers. Here’s what we discovered (and I mean discovered — neither the franchisor nor the franchisees knew this information beforehand):

• It cost the “average” franchisee $100 to get a new customer to come through the door (that included marketing costs and the required fee for the franchise advertising fund).
• The “average” customer spent about $10.
• No one knew if the customer would return — ever.
• If the customer did return — no one could predict when or how often.
• The “average” franchisee did little to nothing to bring the customer back again repeatedly (and you may be surprised to find out why).

Busy, busy, busy going out of business!

So while it appeared “the marketing system” was doing its job, e.g. the franchisees were busy serving customers throughout the day, in reality “the marketing system” was slowly running the franchisees out of business (and perhaps into an early grave)!

That and the fact that the franchisees were so busy, busy, busy taking care of all the customers “the marketing system” provided that they had no time to do the things that would have insured getting the maximum benefit out of their customers, i.e. increasing sales, increasing frequency, building rapport with key customers, gathering referrals, etc.

Who caused that fire?
As one franchisee told me, “From the time I open the door in the morning until I close it at the end of a long day, I don’t have time to do anything but put out fires.”

Going through my mind: Does that sound like an ideal franchisee? How long is that franchisee going to last? How much validating will that franchisee do for the company?

Upon examination, most of the “fires” were caused by customers and employees. Occasionally, even though they didn’t know it, the franchisee caused some of the fires!

Blame it on the franchisor, of course
You can be sure the franchisor was being blamed for the majority of the challenges the franchisees faced. Frankly, I would take the side of the franchisees on that issue (though it does no good to blame anyone, but rather to accept responsibility). The franchisor could have done a better job sooner! In other words, the CEO that hired me had only recently arrived at the company. To his credit, he quickly assessed “the marketing system” and knew that it was broken. However, this company had been operating for many years prior to hiring this CEO. Where were the marketing folks all those years? Where was the company’s leadership?

Why doesn’t this system work?
So what was wrong with “the marketing system” at this client company?

Simply, it was producing the “wrong” customers for the franchisees!

Even among customers there are stars
Through our continued research we further discovered that not all customers were created equal! Some spent more money than others and never, ever complained or started a “fire”! Of course, those were “the right” customers.

Problem was, “the marketing system” — which attracted franchisees, along with the company’s brand name — produced too few “right” customers.

Revealing more about “right” customers
Without giving away too much information (and revealing the company), here’s more of what we discovered about the “right” retail customers for this franchise business. They:

• spent about twice as much as the average customer
• returned 3 to 4 times a week
• owned a business, which existed within 3.5 miles of the franchise location
• were males (64%) and females (36%)
• had partners in their business (46%); most often, a spouse
• were between the ages of 32 and 62

Remember garbage in, garbage out?

Wow! With just that information alone we could create a new marketing system that would target the “right” customers! All others were probably “wrong” for the business. The all-important “marketing system” was targeting “all others”!

Ultimately, with the help of the company’s advertising agency, we created a new marketing system that achieved the goals established by the CEO and supported by the Franchise Advisory Council.

Careful of the advice you get
So I shiver when I see “advice” that tells you to buy a franchise where there’s a “marketing system” that “brings in the customers.”

That’s good advice only if the customers are “right” customers. If they’re “wrong” customers, you can plan on owning and operating a business filled with headaches, challenges, issues, “fires” and, ultimately, not enough money for you or the franchisor.

Katryn Business Growth

Ever feel like you’re in business overload with a task list that just keeps growing?

I’ve been in that situation recently – lots of good things happening, but the list gets longer every day rather than shorter…  Pretty well everyone I talk with who runs a small-medium business is familiar with the feeling – as soon as you get the sales structures nailed, the project management systems need work.  Then you get those nailed, and the customer support processes need strengthening.  It feels a bit like the gopher bashing game - as a kid I used to go to a local fair where they had a game with multiple holes and gopher heads would keep popping up and people playing would try to bash the gophers (not live ones!) with a mallet.  Every time you got one, another would pop up. 

This is not a new problem, of course.  Solutions are popular; from Verne Harnish’s one page strategic plan (which I depend on heavily) to a variety of other management tools.  But it has been very present for me recently.  I’ve found a couple of things that help me keep a handle on what needs to happen when:

• Lists.  I love lists; writing stuff down gets it out of my head AND gives me a nice visual indicator of progress as I can check items off.
• Delegation.  Once I’ve spent the time to write something up, then maybe I can hand it off.  Otherwise it stays as mine to do!  I did a list this morning and had about 10 different task areas that I can hand off, some ongoing and some one-time tasks.  It’s great to see that written down so I can decide what skills are needed and who can do what (instead of me).
• The Most Important Thing.  I’m a big fan of the square with urgent and important where the goal is to work most of the time on stuff that is important but not urgent, so that nothing makes its way through to the important AND urgent slot.
• Blocking Time.  I recently blocked off two full days for strategic planning.  It was very hard to free up that time, but the results have been spectacular so far (and make determining the Most Important Things much easier on a day to day basis).

None of these are rocket science, but I find that when I get busy or frazzled, going back to the basics makes a big difference.  It lets me focus and make sure the business is moving forward on a trajectory and that I’m not spinning in circles or just reacting to what comes up.  And for today, that’s my most important thing!

Katryn Best Practices, Business Growth, Focus

This is a Guest post from Paul Segreto – Franchisessentials, originally posted at http://franchisessentials.wordpress.com/2009/06/22/controlling-brand-trademark-within-social-media-what-to-do-if-franchisees-got-there-first/

I was recently asked to share my point of view on how a franchise brand can — or even should — wrest control of their brand on social media destinations when franchise holders have been early entrants.

Here are my initial thoughts:

As is typical in most franchise agreements, there’s most likely a clause regarding use of the brand name and trademark. It may need some interpretation to Web 2.0 usage, but there should be no problem applying the language in this regard. Also, online branding falls into marketing, and ultimately, advertising. I’m certain franchise agreements provide typical clauses that prohibit franchisees from utilizing non-authorized ads, etc.

All that being said, it’s always best to convince rather than demand. If the organization is large, it may be more effective to work through advertising cooperatives and franchisee advisory councils in pushing anything regarding social media. One strategy could see the franchisor contributing financially to a social media strategy. (Much cheaper than legal expense to enforce clauses in franchise agreement; not to mention “expense” of diminished morale) As incentive to initiate the same, franchisees would need to voluntarily relinquish their online identities so the parent company may establish one facebook page, one twitter id and one website.

I would recommend developing a template for franchisees to use that would piggyback off the national identity. For example, if corporate identity is Zippy Lube, the franchisee could use Zippy Lube NY or Zippy Lube NY 101 or Zippy Lube Jamaica NY and so on. Each franchisee could have their own web page linked to company website. It’s important to maintain uniformity and a sense of organization when attached to company brand or when linked together.

Please share your thoughts below. Thank you.

Katryn Best Practices, Communication, Franchise

For those who enjoy reading the franchisor spotlights, have a look at Franchisor Spotlight: Judy Brooks from Blow Dry Bar – Business Wisdom on The Next Women – a business magazine for female internet heroes. 

It’s an interview I did with Judy Brooks from the Blow Dry Bar, talking about how she has grown Blo and her personal learnings along the way as well as her advice for people considering franchising.

A short excerpt:

Growing her company has come from growing the brand and building a strong community, where customers know that they have something in common with the person sitting next to them, whether they ever speak together or not.  Her brand is built down to the smallest detail; calling new staff ‘hair cadets’, fit out details for the premises, playing on the name ‘Blo’ and teaching new staff to honour the fact that customers chose to spend their money with Blo.  Her staff tend to be young and very plugged in – Blo is active online with Facebook, Twitter, YouTube and online bookings.  Read More

The Next Women is also a great place to find articles about women in business and women involved with interesting technology – both start-ups and established companies.

Katryn Best Practices, Business Growth, Franchise, Franchisor Spotlight

Top Ten Tips to increase online community interactions

Have you set up an online community that isn’t getting the traffic you are looking for? Online communities can be set up very quickly based on a vision that seems compelling.

‘Build it and they will come’ is one of the most misleading phrases out there when it comes to creating an online community that takes on a life of its own and accomplishes the goals that caused it to be created.

Like any marketing tool, online communities can be hugely effective if you have value to offer that your potential community members also value, and if you are able to spread the word. But getting to the critical mass tipping point is not always simple. Many sites about online communities are full of suggestions about which tool or software package to use. Don’t get distracted. You can have the best software package in the world, but if you don’t get interaction happening, your online community will not grow.

People are swamped by online communities they can join. They may already belong to Facebook, Twitter, LinkedIn, Ning communities or other special groups. There are thousands of specialized communities they can pick from and join.

Open Box has developed a number of online communities, and works with customers to design, build and then draw traffic to their sites. Here are our top ten tips to help increase the interactions in your online community.

1.  Offer something that is of high value TO YOUR MEMBERS. It is very easy to offer something that you consider to be of high value – the most important thing is to know what your potential members see as being of high value – these two can be very different and you must know what they see as valuable. If you don’t know the answer to this, don’t read any further until you do – none of the following tips will help.
2.  Have a tightly targeted community – don’t try to be all things to all people – do one thing extremely well and have a simple message that tells people exactly what your community has to offer them
3.  Seed the community – get a core group of people who are both interesting and experts in the field who will start interesting conversations and get interesting posts going to kick-start the conversation
4.  Try arm twisting and bribery – the key goal is to get to critical mass – where you have enough members and conversation that when new people come they see the community as alive and interacting – then they will want to join and interact themselves. Find people you know who will comment on the early posts and/or start discussions – ideally people who also know each other will get the ball rolling
5.  Reward interactions – make sure that people who do post are getting replies and that a positive feedback loop is being established
6.  Quality not quantity – it will be of greater benefit to you to have three conversations going that are passionate and involved than 50 that each have one or two posts. Map out a strategy for those first conversations (be they in forums, articles, feedback forums or others) then implement
7.  Know what people are doing – use analytics tools to see where people are going, what they are doing, and especially where they are leaving the site. Where they are going means you have done something right – where they are leaving is a place that you may want to make some changes.
8.  Try rapid small changes and measure the effect – this tip ties in with #7 – make numerous small changes and always track the effects. If you add a new or bigger button, do you get more response? How about if you change the wording? One site we worked with was free, but simply adding ‘it’s all free’ above the ‘register’ button increased the number of sign-ups significantly.
9.  Find passionate people – people who are passionate about the subject of your community will make the best contributors. Find them through twitter, through their blogs, through other online conversations. Get in conversation with them and find out what might draw them to your community. These are the people who will post, reply, and tell others about this great new site they have found.
10.  Ask for help – people love to help, so posting questions asking for help / advice / input is a great way to get the conversation going, especially once you’ve found your passionate people in tip #9.

Non tip: Being controversial is often advised as a way to get people talking about you. If you try it and it works, let us know in the comments, and maybe it will be in the next top 10 list!

Katryn Best Practices, Communication, Tips

Enterprising Moms Network.com

They say that necessity is the mother of invention, and in the case of Kelley Scarsbrook that age old expression holds doubly true. I’ve recently had the pleasure of working with Kelley who developed her own franchise, the Enterprising Moms Network. The Enterprising Moms Network offers a place for mothers who are also entrepreneurs to come together and talk about their questions, issues and challenges and be reminded that it is possible to be both a good mom and a good entrepreneur. Kelley Scarsbrook, the founder, is a columnist, entrepreneur, blogger & a mom.

I talked with Kelley about how she got going, her franchise experience, and some of the factors in her success.

Katryn: When did you start Enterprising Moms?

Kelley: I started in Oct 2007.

Katryn: What prompted you to start your own franchise?

Kelley: Back when I left the work force full-time & became a stay-at-home mother, there were no job share or part-time opportunites for me. I started the Mom At Home blog and received lots of emails asking how I got the blog going and ran a business as a stay-at-home mother. I discovered there was nothing out there to support mothers who also want to run businesses. I knew having a secondary income (which almost every family today needs) was important for many women. There are a lot of women who are smart & intelligent but don’t see the options available to them. They have business ideas, but no network to help them get to the next level.

I started small workshops on how to have home-based business for women. It started with really small workshops & seminars, with ten women in a room. Eventually those workshops evolved and grew. I then hosted a luncheon with Sandra Wilson (she had just sold Robeez). Everyone wanted to hear how she did it, how she built her business & eventually sold it for many millions.

The luncheons evolved into events to celebrate women who have done it – made a viable business for themselves. The first event was about celebrating moms in business. It was not a tradeshow, but an educational opportunity. I saw a need for ongoing support for Moms in business.

Katryn: How did you get into franchising?

Kelley: I knew that other women needed/wanted this. I initially I took on the expansion myself, opening in Richmond, & the North Shore, then thought it was ridiculous to think that I can be everywhere. It was supposed to be a side thing but it was taking all my time. I asked members about who might want to run their own chapter. From there, franchising was an opportunity to get it out to other communities.

Katryn: What are/were your franchise development challenges?

Kelley: There were all the details involved with setting it up, the things I never would have thought about. I had to create the manual & the book – writing out the training manual – putting all my brain into it – how I run meetings, what my thought process is & putting that all into words so someone else could pick the book up, read it and run with it. The hardest part of the work is getting people to understand. One of biggest stereotypes to get over was that people assumed the Enterprising Moms Network was about mom topics only. The second obstacle is the type of mom people picture – eg. moms knitting at home. We are business women who happen to be mothers. We have all different levels of successes, and people are always surprised by the profiles of our members. People tend to assume franchising is a hands-off business, but if anything, it’s more time consuming because you have to train & oversee the business. For anyone considering franchising, definitely speak to people in that world to get a full grasp of what is involved.

Katryn: What has been the most exciting part for you?

Kelley: Seeing it catch on. Seeing people understand what it’s about and who are as passionate about it as I am. It was great to connect with other women who “get it”. Building the Enterprising Moms Network has been a bit llike a wheel – you push and push to get it to turn, then it eventually begins to turn on its own and gathers momentum.

Katryn: What were your best resources?

Kelley: Small Business BC (http://www.smallbusinessBC.ca) is a huge, tremendous resource. They have a lot of great programs.
Talk with franchise lawyers or consultants and get some insight first before you take the plunge. Get information & learn about what it means to be a franchisor and the amount of work involved.

Connecting with Kelley Scarsbrook

The Stay At Home Mother is where it all started, and I continue to post information and stay in touch with people there. I am new to Twitter, and am just learning all the lingo and educating myself slowly on how Twitter works. I can also be contacted directly through the Enterprising Moms Network website.

Our next event is the 2009 Business Conference “Get the Word Out!”, Saturday, June 13th, 2009 – 11:00 – 5:00pm. The Conference is an inspirational Event that supports and educates mom entrepreneurs.

Katryn Business Growth, Franchise, Franchisor Spotlight