Buy A Franchise – Concept of Franchising Part 2

September 10th, 2010

(Buy A Franchise, Seattle Franchise, Bellevue Franchise)

 This is Part 2 in my series defining the Concept of Franchising:

Get

Most people “get” this one. This is sales and marketing. Peter Drucker said there are only two things that create value in business – sales and innovation. The rest are costs.

I would suggest that many companies tend to become happy with their existing suite of customers. Or they land the “big one” and all is good. I would also suggest that if there are not constant strategies put in place to continue to get new customers, to get new blood, then stagnation will follow. Landing the “big one” can actually put the business in a very precarious position. It’s called over-trading. If the business relies too heavily on one source for its revenues it can be in big trouble if something goes wrong with that customer.

The solution to over-trading, and to keep generating a steady stream of new customers in order to keep any business vibrant and moving forward, is to implement great “get” strategies. And never quit. That’s certainly not rocket science, but it is a basic tenet of long term survival.

General Motors should have been trying to figure out how to “get” Japanese customers in the 1970s. That would have led them to understand how to “keep” North American customers. Enough said.

Satisfy

A lot of people really miss the boat on this one. I actually saw a truck drive by me recently that had a slogan on the side in proud, bold letters that said “We Deliver Satisfied Customers”. They seemed to be quite proud of the fact that they actually provided what they sell. All customers for all businesses expect to be satisfied or they wouldn’t complete the business transaction in the first place. Boasting that customers are satisfied is like saying, “we don’t rip you off”. Well, as Chevy Chase used to say, “big deal and thank you very little”.
Satisfaction must be a given. It is required for survival. It is certainly one of the four main purposes or objectives of business, but it is so often misunderstood. Satisfaction is what people buy, so they expect it to be delivered. We must constantly be wary of what customers expect in order to be satisfied, and it’s an ever-increasing standard. However, it’s nothing to brag about. It’s just what you sell.

In a book called “If It Ain’t broke, Break It!, Robert Kreigel wrote, “Embrace the unexpected. The only thing that won’t change is that everything will keep changing. Today’s skills, knowledge, and products live fast, get old before their time, and die young. The overnight letter, which was the innovation of the 1980s, is now used only when you’re not in a hurry.” He wrote that message 15 years ago! It’s a clear, and still valid, indication that we need to continually re-tool to meet customer satisfaction goals.

Keep

If satisfaction is a constantly moving target, and satisfaction requires ever-increasing effort and commitment, then to keep customers requires more than just satisfaction. Customers expect satisfaction. They buy satisfaction. People will copy satisfaction. If that’s all that is provided, then it comes down to price, and that’s a losing game no matter what business is at hand. Therefore, strategies are required to provide more than what the customer buys, in order to maintain long-term trusting relationships. Michael Vickers says to “take a standard service offering and up-level it.” That defines the “keep” strategies that a business must employ. Ignoring this one will again create stagnation or denigration.

Grow

Most of us have heard that it is less expensive to do more business with existing customers than to obtain new ones. It is my belief that you must do both.

In order to do more business with existing customers, there have to be consistent strategies in place to educate them about new products and services. In addition, you must understand their business, particularly as it changes, so that it becomes apparent when your products and services can be provided. You must also put practices in play to ask for more business. Complacency is too often the norm when opportunities are in front of us. Companies that implement processes to ensure these things are managed will continue to grow business via the grow strategies.

The grow strategies also include asking existing customers to support you in your business growth through others. It’s surprising how many people would be willing to help if they are requested to do so. Things like referrals, testimonial letters, agreeing to act as a reference, and introductions to their association are all offshoots of this strategy.

So there you have it. These are the four basic objectives of any business. Business needs strategies and formulas to continually get new customers, satisfy them, which is an allusive and demanding standard, keep them, which requires more than delivering what you get paid for, and grow business with them or with their help. These are the basic concepts of business, and they must be at the heart of every good business, and every good Franchise system. Evaluating a Franchise system should include an assessment of how well the Franchisor understands these concepts, and how well they execute strategies to make them happen.

Buy A Franchise, Seattle Franchise, Bellevue Franchise

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