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Grow Your Business ~ 2007 issue 2 |
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Is Buying A Franchised Business Right For You? There are a lot of franchise opportunities available that cover almost every conceivable area of the commercial world. They offer the chance to get into a business of your own with products, systems and promotions that have been tested and proven even before you start.
A franchise can even be a way of ‘buying a job’ for those with retirement savings or redundancy payouts. But is it right for you? Here are some of the pros and cons that you need to consider. Five big positives
Five big negatives
So what’s the answer? Understand that no franchise comes with a guarantee of profits. Every business is an independent operating entity that will largely succeed or fail on its own merits. Although the franchiser dictates the terms on which you trade, your own input into the business will have an influence on the bottom line. You have to follow someone else’s way of doing business. If you can’t see yourself doing that (and many very good managers are simply too independent to accept this) then a franchise isn’t for you. Start by talking with other franchisees. Ask them how they feel about their own business, about the franchiser and about the money they’re making. What are their thoughts on the future of the franchise? Are they getting value for money from their investment? Examine the franchise agreement carefully. Make sure it’s not all slanted in favor of the franchiser. The best franchising relationships are reasonably equal partnerships although it’s normal for the franchiser to protect their interests from franchisees who let down the system. Get an accurate picture of the costs of the franchise – what it will cost to set up the business and what ongoing fees, levies and so on have to be paid. How long has the franchise been going and how successful is the franchiser’s business? Finally, do you have enough capital to enter into the franchise? There’s nothing worse than finding out you’ve exhausted your resources just as more are needed to keep things going. Franchises are never a cheap way to get into business, but they are a way with a few more certainties than going it alone.
Delivering Customer Service Via Email Studies consistently show low levels of customer satisfaction with the ways in which businesses use email. Too often companies seem to be using email as a means of avoiding other forms of contact with their customers and their customers aren’t pleased. Their most common complaints include:
Email based customer service has to date been a let down for most customers. They expect their communications to be given the same attention as a letter or telephone call and instead feel that their emails have largely been ignored. Customer feelings are confirmed by a report on SME use of email by BenchmarkPortal, a leading source of CRM best practices for contact centers. Conducted in early 2005 the study evaluated 147 SMEs across five sectors: retail, travel and hospitality, financial services, ebusiness, and hi-tech manufacturing. Some of their key findings were:
Astonishingly, 40% of online-only businesses, a category that includes online recruiters and shopping comparison sites, failed to reply to customer email inquiries! And what do customers do when this happens? The answer is simple - they go away. Forrester Research studied customer behavior and found that 70% of online customers will go to a competitor if they don’t receive a timely response from a company. Only 22% of online customers return to a website after a negative experience. There are a range of solutions that smaller firms can implement to capitalize on the cost savings and timeliness of emails without turning customers away.
Email is one of our most valuable channels of modern business communications. It can bring real savings in time and money when applied in areas where customers and companies interact, but only if it’s used wisely.
Small businesses aren’t big advertisers. They can’t afford to be, so when an advertising campaign doesn’t deliver results it’s especially painful. The good news is that a little knowledge can go a long way to helping make sure that the next advertising campaign gets better results. First look at what advertising can and can’t do. What it CAN do is:
What an advertisement CAN’T do is to actually sell something. Advertisers can get a tremendous response without making a single sale. Does that mean the advertising has failed? Maybe so, but probably not. First, there has been a response to the ad if somebody saw it and took the action called for in the advertisement. By the way, if a small business runs an ad without a ‘call to action’ it’s almost always wasting money! Always include a way for the reader/viewer to respond to the offer – Come in today, Call us now, or Send today for your free sample are all examples of calls to action. They should be clearly stated, quickly understood, and easy to act on. Obviously if a business runs an advertisement (with a call to action) and gets no responses to it the ad hasn’t worked. Maybe it was an unexciting or uncompetitive offer. Maybe the headline failed to communicate value. Maybe the copywriting was confusing. Maybe the advertisement appeared in a medium that wasn’t seen by any prospective customers. When the wisdom of hindsight is applied to the matter of why it didn’t work chances are the answer will be apparent or be figured out pretty quickly. If there’s still no obvious reason and the offer made in the advertisement is both attractive and competitive, try changing an element like the headline or the illustration and see what happens. One solution to doubts about advertising is to test an advertisement. Run it to see if it generates a response, then run it again with an element that’s been changed to see which works the best. A different headline can really affect the results. This may sound like an expensive process but it is one way to make sure that advertising achieves the maximum possible response. Keep on testing until the process has created something that’s really powerful. Another test is to change the advertising medium to see which generates the biggest response. Most media proprietors have accurate audience details so if a would be advertiser is looking for a specific target they can review the available statistics to find out which delivers the best value. Usually this is determined from the ‘cost per thousand’ – how much it costs per 1,000 members of the target audience - that gives a yardstick for comparisons between alternatives. When advertising in the print media get samples of all the publications that seem appropriate and see where competitors regularly promote themselves. They’re probably getting a response or they wouldn’t be there. To evaluate a publication give a call to some of the existing advertisers who appear in it and ask them for their opinion. What kind of response do they get? How does this compare with the sales they make? There are big differences between advertising media and it’s essential to be in the ones that are generating responses for their advertisers. If the advertising does get a response – people call the business, go to the website, walk in the door – the ad has done just about all it can do. If an advertisement is placed in a local magazine with a circulation of 3,000 and it gets 150 responses this would usually be considered a pretty good response (5% of the circulation has responded). If none of those 150 people actually buys something the campaign has had a bad result but not a bad response to it. Look somewhere other than at the advertisement for the reason why nothing was sold. Take a good look at existing systems for handling responses to advertising; has the sales team been told when the advertising is appearing and what the offer is? Are they given sufficient information and training to sell the offer when the advertising generates a response? If prospective customers call up about the offer but there’s nobody on the other end of the phone to make the sale then the advertising investment has been wasted. If advertisers are willing to invest the time and money it takes to discover the best advertisement, best offer and best medium they’ll find their advertising works a lot better than it ever has before. That is, they’ll get more responses than ever before.
Get Specific When You Advertise How many advertisements do you see that just scream out: We give you the best prices or Our service is better? The simple answer is, too many. It’s easy to make a promise like this in an advertisement and every newspaper is full of them, but they can be a real turnoff to an aware public who are interested in finding value and need proof that you can offer it. Consumer research has consistently shown that people perceive most businesses as having similar relationships between their pricing and service. They know that there are top of the line suppliers that excel in service and charge higher prices, just as they know that there are cut rate suppliers with lower prices and lower standards of service. But they also perceive that the difference in pricing between the two levels isn’t all that great, and that no business will stay around long if its service isn’t at least acceptable. That leaves the important question of how you can stand out from the competition while still trying to communicate your own value proposition. Tell them what you’re going to give them If somebody’s never been a customer of yours previously, your advertising has to be very specific in painting a picture of what they’ll find if they buy from you. It’s essential to convey your uniqueness rather than just trying to say We’ve got good prices and service. What is it about your business that will interest a prospect? What will you do for them that nobody else can do? Or, that nobody else is saying they’ll do? It begins by finding out what your customers and prospects really want, then telling the world that you’ve got it. What’s really important to them that will induce them to purchase from you? The biggest thing to keep in mind is that your advertising has to be about them and not about you. Be specific about what you’ll do for them – is it better fitting clothes or a smoother running engine? That’s what they really want, and not just bland statements of price and service. Customize your benefit Once you’ve identified the basic benefit that they want and you can provide, augment this with an offer that’s specific to your business. Take a hypothetical situation where a person’s refrigerator has broken down and a replacement is urgently needed. That person looks in their telephone directory and sees two advertisements for refrigerators. The first says: Award-winning electrical appliances. Great service and the best price.
The second advertisement says: Electrical appliances delivered free. Same-day service to most areas.
It’s obvious that winning awards and vague promises about service and price aren’t nearly as important to somebody without a refrigerator as having it delivered quickly and especially if it’s free. There’s no question about which advertisement is going to be the most appealing. The best way to stand out from the competition is to base your advertising on what your customers really want and how you’ll provide it to them. Think about this the next time you prepare an advertisement and you’ll be using words your customers want to hear.
“An executive is a person who always decides; sometimes he decides correctly, but he always decides.” - John H. Patterson
How to make the most of your newsletter Be sure to read each article with the mindset "How could this apply to our business." Thinking of it that way will guarantee that you get value. Better yet, take notes as you read and commit to having the ideas implemented by the time the next edition arrives. Also, make copies for each team member. To really make sure something positive happens, work with your business development specialist to talk your team through the ideas and how to set a schedule for getting them implemented. We're here to help you get started.
While every effort has been made to provide valuable, useful information in this publication, this firm and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents. Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.
All rights to the content in this publication are reserved by RAN ONE Inc. Any use of the content outside of this format must acknowledge RAN ONE Inc. as the original source.
© 2007 Bullseye Business Solutions
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