Business Management

by Greg Nathan

last updated 24/09/2018

Greg Nathan is founder of the Franchise Relationships Institute, a speaker at franchise events world-wide and author of several books on franchising.

How good franchisees increase their sales

by Greg Nathan

last updated 24/09/2018

Greg Nathan is founder of the Franchise Relationships Institute, a speaker at franchise events world-wide and author of several books on franchising.

June 2018 - Greg Nathan of the Franchise Relationships Institute reveals the seven habits of top franchisee sales performers

As disruption in its various forms hits many industries, so franchise networks are responding. One particular area of interest is the fight against what is called ‘margin compression’, where costs are rising faster than sales. The Franchise Relationships Institute (FRI) has recently been conducting a research project on this topic to discover how franchisors and franchisees are meeting the challenges.

We’ll be publishing a full report on our findings shortly; in the meantime, as part of the study we asked senior franchisor executives what their highest performing franchisees are doing that is enabling them to achieve superior sales performance. Here’s what we discovered about the seven habits of top franchisee sales performers.

1. They actively engage with their local communities and collaborate with other local businesses.

Rather than passively donating money or products, top franchisees find a way to extract value from their relationship with community groups. They turn up to football matches to present prizes. They find ways to encourage kids and parents to use their business. They also network vigorously with other local business owners, particularly those that share a similar type of customer.

2. They coach staff on the specific behaviours that drive sales and customer satisfaction.

Top franchisees understand their customer journey intimately. They know the moments of truth that, if handled well, delight their customers and, if handled badly, alienate them. For instance, the warm welcome immediately as a customer enters their shop, as opposed to being ignored while staff are looking at their phone. Or the paraphrasing of what a customer needs, as opposed to assuming and getting it wrong. And they constantly reinforce these behaviours.

3. They set challenging goals, and seek feedback and ideas from their field manager and peers.

There is a thinking style called a Growth Mindset that enhances performance. Top franchisees have a Growth Mindset. They enjoy putting in the effort required to achieve success, and they enjoy setting goals that stretch them. They also adopt an attitude of genuine curiosity to learn from other franchisees who are achieving sales success, and they seek feedback from others on how they can improve.

4. They create a vibrant internal culture that inspires high levels of brand passion in their team.

Every business has a culture – an accepted way of doing things. This includes how people approach problems, talk about customers, and work together. Top franchisees understand that the culture starts with them, and they model the behaviours they expect from their team. They understand that how they show up each day is probably the single most important factor for inspiring their team to do their best.

5. They obsessively focus on understanding and staying connected to their existing customers.

Top franchisees never take existing customers for granted. And they understand that some customers deserve extra attention because they are more valuable to the business. Maybe they spend more, buy more often, promote the business to friends or family, or are just a pleasure to deal with. Not only do these franchisees take the time to understand the profile of these customers and categorise them in their CRM, they put aside time regularly to stay in touch.

6. They use systems to measure sales related KPIs and respond quickly to new opportunities.

Top franchisees collect and measure the indicators that predict sales performance. These include the behaviour of customers, such as the nature of their enquiry, and the behaviour of staff, such as how quickly they are getting back to customers. Top franchisees especially appreciate the direct correlation between the speed of response to a customer enquiry, and the likelihood this will convert into a sale. They also treat all leads with care, understanding that online leads can be just as lucrative if these are managed effectively.

7. They wisely invest in local area marketing and initiatives to keep their business fresh and relevant.

This is the only habit that involves a direct financial investment. This may include upgrading the appearance of their premises or using a paid marketing channel. It may also involve pilot testing innovations for the franchisor as a way of staying at the forefront of new trends. But before spending money, top franchisees always ask themselves what outcome they are wanting to achieve. More enquiries from new customers? More enquiries from existing customers? Existing customers to spend more? Or perhaps to boost their reputation as the best place to do business.

Recruit, coach, educate

Yes, business is tough. But these seven habits clearly show there is much franchisees can do to improve their sales performance and reverse the margin compression that is dogging so many businesses. Smart franchisors will be paying attention to these habits in how they recruit, coach and educate their franchisees.).

Thanks to the franchisors who assisted with this study, and we look forward to sharing more of the findings with you.

Greg Nathan is founder of the Franchise Relationships Institute, a speaker at franchise events world-wide and author of several books on franchising.

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