With constant change the only certainty, harnessing the power of data for growth amid shrinking resources and shifting consumer behavior is critical for franchise brands of all sizes. Advanced point-of-sale and customer relationship systems offer franchisors the digital footprints to engage, garner feedback, track trends, try new products, and create unmatched customer experiences. Analytic data, swiftly served up, can also be a powerful ally to predict the success of local marketing and franchise development tactics and drive growth-focused operations and franchise relations decisions.
Gathering what may feel like a deluge of available data is one thing; it's what you do with the information to solve a problem, answer a question, or connect with customers that matters. Here are 10 data-driven goals to consider to transform insight into action for franchise success.
1. Choose the right metrics
Knowing your core customer determines marketing and measurement tactics. Brands must be willing to adjust and be ready to measure again. Data mined can help brands select key performance indicators (KPIs) that correlate to the company's strategic goals, such as a specific sales increase, conversions or site traffic, and craft strategies to target the right customer with the right message.
But don't get lulled into focusing on performance-driven metrics in isolation. Too often, brands obsess over single transactions and overlook the lifetime relationship of the consumer. Drilling in on the Consumer Lifetime Value (CLTV) through POS information—such as frequency and average spend—can help project how much revenue you can expect from a single guest. The longer the customer continues to buy from a company, the higher their lifetime value. CLTV is also telling for its insight into Customer Acquisition Costs (CAC) and strategies to boost loyalty, bring back customers (particularly those lost during the COVID shutdown), and maximize the initial investment return over time.
2. Grow with customers you know
The ongoing pandemic has CMOs laser-focused on retention–and for a good reason. It costs five times more to acquire a new customer than to nurture and retain existing ones. Loyal customers spend more, refer more, and expand their purchases. The goal is to keep customer retention high and your churn rate (those guests, clients, or users you lose) low. Creative approaches to common retention strategies, such as loyalty programs and account sign-ups, provide a treasure trove of data for robust reporting capabilities. Using a one-two-combo of marketing technology and local data can transform casual guests at one restaurant into brand loyalists. Just a 5% increase in retention has been found to boost profits anywhere from 25% to 95%, according to Bain & Company research.
3. Build trust by benefitting the customer
John Hagell, founder and chairman of Deloitte's Silicon Valley-based research-focused Center for the Edge, encourages company leaders to broaden their thinking on data use beyond scalable efficiencies. In a recent Harvard Business Review webinar on the topic, Hagell suggested using strategies aimed at helping customers get more tangible value from their products and services to deepen, and in some cases rebuild, trust. A systematic survey of data already on hand can provide strategies to engage with customers proactively. It can be as simple as sending a recipe related to a food purchase or following up on a furniture sale with maintenance and cleaning tips. The same thinking holds for franchisees or any other brand stakeholder. Small, smartly made moves can set big things in motion. Hagell calls it a "virtuous cycle." The more value provided to the customer over time, the more willing they are to share additional data. "Companies that understand this, I believe, are going to have privileged access data, which will be a significant competitive advantage," Hagell noted.
4. Capitalize on customer loyalty
Data enables you to segment customers, find trends, identify opportunities to increase brand loyalty — and so much more. Real-time data fed back into CRM systems shape the most-effective loyalty campaigns. These rich insights result in highly personalized consumer experiences that incentivize return visits and increase check averages. The right analytics reveal quickly what's working and what's not — to adjust accordingly. For brands without a loyalty program, customer sign-ups become key, notes a recent Gartner's intelligence report on "How to Drive Retention Without a Loyalty Program." The report recommends discount and coupon campaigns, subscribe and save, and gamification as account sign-up strategies to capture consumer data and foster customer loyalty.
5. Plan for the future with confidence
Every time a customer responds to an ad or makes a purchase, a little more information about them and your brand is collected. Data on client transactions and inventory turnover can shape marketing, product development, and operational initiatives. Consolidating rewards, texting, online ordering, and email databases allow you to create customer profiles and build on this information from other channels and point-of-sale details. Big data and AI-fueled predictive analytics is changing the way brands and their franchisees plan by providing a more reliable road map for the future.
6. Optimize operations
Collecting, synthesizing, and analyzing data at the franchise level can reveal ways to cut down on waste, avoid overstocking woes, and identify employee schedule or service challenges. Information gleaned should align with the overarching corporate strategy and allow for sharing best practices across the franchise system.
7. Keep tabs on what others are saying about you.
Big data allows companies to collect great feedback. These real-time conversations are golden customer connections. Social proof, provided by peer-to-peer recommendations of products and services, is a powerful way to persuade your potential customers and build a culture with a reputation for great service. Stellar customer service boosts your customer count, ticket average, and correlates with having happy employees. Monitor and respond to online reviews and use survey software to measure customer satisfaction tools, such as Net Promoter Score, to get the intel you need to polish up on your interactions with customers and potential franchisees.
8. Find better sites and future franchisees
Detailed demographic and psychographic intelligence works to pinpoint prime real estate locations and avoid encroachment problems for potential franchisees. Crunching the data at high-volume stores reveals more than just what people are buying. For instance, audiences and attribution insights may uncover a high customer count from a neighboring suburb that sparks plans for a new store or franchise territory, piggybacked with targeted franchise development efforts.
9. Educate and support franchisees
No matter how it's collected, data can be used to demonstrate sound decision-making to operators, with the analytics to back it up. Through an intelligence dashboard, franchisees can also benefit from better reporting metrics and take action, boosting customer retention and sales in the process. Internal relationship management systems allow franchisors to manage franchise support. Simultaneously, customer portals provide franchisees across the system with a window to see how they stack up in areas of revenue, expense, and online reputation against their peers.
10. Put franchisee satisfaction data to work for franchise sales
Franchisees want to know if your franchise partners are happy. Give prospects the research they want upfront with satisfaction results. Along the way, you might find this type of transparency works to capture online leads and nudge candidates through the development funnel. Executing on franchisee performance is a systematic process using financial performance management metrics and progress against each franchisee's goals and objectives.
Don’t let data lead to analysis paralysis
Data channels and technological applications are emerging at such a rapid-fire pace that franchise brands can get caught up in analysis paralysis. FranConnect's platform delivers easy-to-understand data insights across multiple areas of the franchise business for better decision making. The technology allows franchisors to integrate their existing solutions and pull data from disparate platforms for more informed business choices—and smarter growth.
Learn more by visiting the FranConnect Platform Overview.