Feedback loops and franchise success
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?
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