Seeds of Growth - Franchise

One More Chapter in a Great Story

Dave Free — Fri, 15 Dec 2006 14:55:51 -0700

About six months ago I wrote about a small, bricks and mortar business that had successfully implemented and was enjoying the fruits of an online system that increased word-of-mouth marketing for their business. You can read the original post here. In a nutshell, the business is a haircut salon for men--a Sportclips franchise to be exact. The owners, Chuck and Joan Matheny, were using Promoterz to 1) Collect feedback from their customers, 2) Establish an "opt-in" email relationship through which they could communicate directly with their customers, and 3) Give their customers an easy way to tell their friends about their store. Top line result: more than a 20% increase in revenue.

Here is a new chapter in their saga:

Corporate SportClips introduced and has been encouraging franchisees to promote a "Season Ticket" concept. Customers willing to pay for six haircuts in advance get a free upgrade to MVP service on each of those haircuts (MVP includes a hot towel and shoulder massage among other things). Because several hundred of the Matheny's customers have asked to receive updates about the store by email, promoting the Season Ticket with an email seemed like a natural. Think about the value of Chuck's email list: because he had reached out to his customers and provided a way for them to opt-in, he could now communicate with those that wanted to hear from him directly and at absolutely no cost. He didn't have to wait for them to come into the store or pay for an expensive ad.

Rather than just encouraging the customers to come in to a store and ask for a Season Pass, we decided to put the technology to the test and offer the customers a quick and simple way to buy the card directly online. The email included a "one-click" buy button. Customers could opt to have the card mailed to them or come into the store and pick it up. The test has been a great success. Several customers have purchased online and the orders continue to come in. Cha-ching! A new online revenue stream for a bricks and mortar business.

Small test--significant implications. Here is a small "old industry/bricks and mortar" business that has figured out a way to use the internet--not as a glorified yellow-pages ad, but as a tool to generate new revenue streams, increase repeat customer visits and collect new leads--all of which have a direct impact on the top and bottom lines.

The real "no-brainer?" The Matheny's used Promoterz to do all of this. The cost: $50 per month per store.

If you are not regularly staying in touch with your customers someone else will. How do you stay in touch? Learn more

The Power of the Talking Bubble

Dave Free — Thu, 27 Jul 2006 14:29:41 -0700

Remember the talking bubble from the cartoons? It occurs to me that there is a lot of power in that bubble. In fact, the whole intent of word-of-mouth efforts is to get your business in your customer's bubble.

How much money do we as business owners spend getting our ads up in lights, in a magazine, on TV, or online? Fact is, consumers are more jaded than ever and better at ignoring all that expensive advertising.

The real power is not up on the billboards or on the airwaves. The real power is in the bubble.

Find your happy customers and put a megaphone in their hand. Learn more

The Miracle of the Reservoir

Dave Free — Mon, 17 Jul 2006 16:52:53 -0700

I grew up in the west and now live in Arizona. There is a simple rule for growing things out here (this rule applies everywhere but is more obvious in the arid west): if it doesn't get water it doesn't grow. Early settlers fought their neighbors over water rights knowing that land without water wasn't worth a plugged nickel. In addition to fighting, they went to work and figured out ways to divert and contain spring runoffs, rainfall and the flow of rivers and creeks to use in dry times. They built dams that created reservoirs then built a network of canals and ditches to get the water to the fields. Wallah! Arid desert became fertile farmlands. Fly over the west today and the benefits of the reservoir and resulting irrigation are obvious in the green irrigation circles that dot the land.

Now think about your marketing and advertising efforts. Paying for advertising can feel like paying somebody to do a rain dance--you're not at all sure what you are going to get. But sometimes there is no choice. So you pay and with some luck some new customers fall from the sky. With a lot of luck maybe a lot of customers fall from the sky. Then comes the moment of truth: do the customers run off like a flash flood leaving only a little green in their path? Or have you built a customer reservoir that they peacefully flow into to be tapped again and again ensuring green for many years to come?

How do you build a customer reservoir? First let's be clear, the reservoir metaphor only goes so far. While it is possible to build a dam to trap water, trying to trap customers is a recipe for disaster. Your goal is not to trap but to create something customers want to be, and remain, a part of. Here are some suggestions:

Be remarkable-Find out what is most important to your customers and then be absolutely amazing at it.

Be inviting-Identify your customers and invite them to be part of something great. Make it easy for them to join.

Be persistent-Make the effort to stay in touch regularly, if you don't someone else will.

Be contagious-Make it easy for your customers to tell their friends about your business.

Be attentive-Ask your customers what they think, listen to what they have to say, and continue to make your business even more remarkable.

The early western settlers learned quickly that without reservoirs they couldn't survive. The same is true of business today, rain dances alone aren't sufficient.

You work hard to make sure your customers are happy. Don't waste happy customers. How easy is it for your customers to share with their friends? Learn more

A Tale of Four Failed Restaurants

Dave Free — Tue, 11 Jul 2006 15:07:38 -0700

What is the most compelling thing about your business from your customers' perspective? Is it remarkable?

I visited my home town recently and noticed that four, fairly-new restaurants were out of business. Restaurants going out of business is certainly not news--it happens all the time--but these four should have survived and thrived, but didn't.

Case #1: Joe's Crab Shack. Located at perhaps the busiest intersection in the area, Joe's opened just two or three years ago. Joe's is a chain of restaurants. As the name suggests, they serve crab and other seafood in a fish camp atmosphere.

Case #2: Lucky Buns. I believe this was a local entrepreneur's project. Built a beautiful building (see picture) on a nice busy street near a freeway off-ramp. The food was hamburgers and ice cream.

Case #3: Chevy's. Also seemed to have a great location and built a nice building. Chevy's is part of a chain and serves Mexican food.

Case #4: Juanita's. Another Mexican restaurant. Pretty good location in a busy commercial center. They built a very nice building to provide that "old Mexico" feel.

All four restaurants opened with great fanfare and significant crowds. Within a few years they were all closed. Why? I have no inside information. I haven't talked to the owners or any one else, but I have a hunch. In addition to remarkable facilities, good locations, and plenty of publicity they all had one significant thing in common: mediocre food.

I lived in the area when all four restaurants opened. I ate at three of the four exactly once. I never ate at the fourth because I had friends that did and told me it wasn't that great. In the restaurant business location and atmosphere may bring them in, but it is the food that brings them back.

How does it apply if you are not in the restaurant business? Make sure you know what will bring your customers back and then focus on making that aspect of your business remarkable, the rest will take care of itself.

You work hard to make sure your customers are happy. Don't waste happy customers. How easy is it for your customers to share with their friends? Learn more

The Power of Staying in Touch

Dave Free — Thu, 22 Jun 2006 12:45:07 -0700

In the cluttered marketplace we compete in, I don't think the power (and necessity) of staying in touch can be overemphasized. I learned the lesson again last week--thankfully in a good way. It had been a while since I had heard from one of our clients at PromoterZ and so I sent him an email and invited him to go to lunch. We had a nice chat, I asked for feedback on our service and he had a few suggestions (I'm happy to note that we followed through on them). I ran a new idea we're working on past him. He liked the idea and agreed to let us test it with his customers. Then he mentioned that their franchising operation is taking off (looking for a good franchise opportunity? Check out Entrees Made Easy) and there might be an opportunity for me to tell some of their new franchisees about PromoterZ. Turns out the timing was perfect, and I'm scheduled to present to some of their new franchisees next week on how to turn customers into promoters.

So what did I get for my $30? Our product, PromoterZ, is now better thanks to his feedback, we have a place to test our new concept (more on that in future posts), and I have the opportunity to tell new franchise owners how much PromoterZ has helped Entrees Made Easy. Where else could I have got that kind of return on my money? Thanks Brandon!

They say it costs 5 to 10 times more to sell to new customers than it does to sell more to current customers, and yet what percent of our effort is spent looking for new customers vs. pleasing and staying in touch with our current customers? I was able to take Brandon to lunch, but that is not always geographically possible. A phone call works great. It can be as simple as, "how are things going?" Use technology where you can. Without exception, each time we send out our newsletter we get one or two phone calls from customers--they had been meaning to call but never got around to it until the newsletter arrived in their inbox. Here are a few other ideas:

• Send 1st timer customers a special thank you
• Send birthday greetings
• Send a newsletter
• Send Holiday greetings (Did you know today is Chocolate Eclair Day?)
• Send thank you notes

Finding new customers is tough and expensive. Once you've got a customer, hold on to them by staying in touch. I can guarantee you if you don't, somebody else will.

If you are not regularly staying in touch with your customers someone else will. How do you stay in touch? Learn more

Real Small Business, Real Word-of-Mouth, Real Improvement.

Dave Free — Thu, 15 Jun 2006 11:22:54 -0700

I don’t mean to bite the hand that feeds me, but I’ve noticed that we of the small business/entrepreneur blogging world talk a lot about word-of-mouth and other great business principles, but rarely do we write about actual experiences from small businesses applying the stuff. My goal is to change that with some real case studies of real businesses applying great business principles and enjoying the benefits. Here is my first attempt.

Chuck & Joan Matheny own two Sport Clips locations in greater Phoenix. Sport Clips is a hair cut place that caters to guys. Every stylist chair has a TV tuned to sports, all the décor is sports related, and they have an “MVP” service that includes a hot towel and a neck massage. Their motto is “Guys win.” If you’ve never been comfortable in the fru-fru world of hair salons, this is the place for you.

Anyway, last September Chuck was looking for a way to improve the performance of one of his locations. It had a great staff and a good location but wasn't performing like he hoped it would. Rather than pay for traditional advertising, Chuck decided to focus on encouraging his existing clients to spread the word. Four months later, without spending a dime on advertising, Chuck’s weekly sales were up well over 20% and have continued to grow.

From the client's perspective, Chuck's program starts with a simple invitation received at the conclusion of their service. The invitation is the size of a business card. It includes the stylist's name and offers a free service upgrade in return for visiting a web site to provide feedback. "Our feedback survey is extremely short," says Chuck. "It literally takes our clients less than sixty seconds to complete. Our goal is not to get feedback on every little thing, but to learn if the client is happy with the service and start an ongoing dialogue."

The ongoing dialogue is initiated with the last question of the survey that asks if the client would like to receive additional information and specials from Sport Clips. Nearly 90 percent of those that provide feedback choose to receive additional information. That’s a pretty good “opt-in” rate. Once customers opt-in, Chuck uses technology to stay in touch with them. First-time customers automatically receive reminders via email, including a discount coupon, every three weeks to encourage loyalty. Every customer that signs up receives a birthday greeting from Chuck including a discount on their next hair cut and Chuck regularly sends out email specials associated with holidays or other events.

The Sport Clips client experience is remarkable and worth talking about in and of itself, but Chuck also takes extra steps to encourage his clients to tell others about their experience. Each time a client completes a survey or receives an email from Chuck they are given the opportunity to forward online discount coupons to their friends along with a personal message. Thirty percent of the clients that join Chuck’s program take advantage of the opportunity and send an invitation to their friends.

Chuck's efforts have paid off in many ways. His stylists love the customer feedback and take greater pride in their work. He knows who his most loyal customers are and can contact them without paying for advertising. And, most importantly, his customers are actively telling their friends to try Sport Clips. All of which have lead to healthy growth.

Time, effort, and money required? The invitation cards that Chuck’s stylists hand out are business cards ordered from Vistaprint. They run about 4 cents a piece--four color both sides. Chuck uses PromoterZ for his online survey, opt-in list management, outgoing email and online referral generation needs. Cost: $50 a month. In terms of time required, Chuck spends a few minutes each day responding to customer feedback. Once a week he shares feedback with his managers as part of his manager meeting. He also spends some time each month deciding on a special offer to send out to his loyal customers. This month? Fathers and Sons that come in together get a Free MVP upgrade for Dad and a half price haircut for son.

Find your happy customers and put a megaphone in their hand. Learn more

Customer as Emperor

Dave Free — Thu, 11 May 2006 08:54:05 -0700

From Japan comes the tradition of oshibori. Oshibori is the Japanese word for the rolled up hot towel you receive after eating at an authentic Japanese restaurant or at the conclusion of an international flight. If you have never experienced a hot towel after a long flight, it is as close as you can get to a refreshing shower in the comfort of your seat with all your clothes on. What does it have to do with growing your business? It's remarkable.

As noted, you might expect a hot towel in a Japanese restaurant or on a flight but how about in the dentist chair just after the hygienist has stretched your mouth into unnatural shapes to chisel that last piece of plaque from your teeth? Nice and warm, with the light sent of lemon--that would be remarkable wouldn't it? How might that change what you tell your friends about your trip to the dentist? Simple thing. Only costs a few cents. But it could lead to a number of referrals. What would your customers tell their friends if you gave them a hot towel?

According to Jason Stark of White Towel Services, the majority of his customers are dentists. Dentists that understand that filling your cavity is a commodity--any one of a thousand dentists could it. But having a remarkable experience in their office--that is something that nobody can compete with.

So what do your customers remember about your business? Do they experience something remarkable enough to tell their friends about? For some businesses it might be their concept. For example, Entrees Made Easy provides the ingredients and recipes for several meals to its customers making it easy and quick for them to create great tasting home cooked meals. The concept is new, innovative, and needed in today's hectic world. Those that try it can't wait to tell their friends.

Thankfully, an innovative new concept isn't the only way to be remarkable. The sad fact is that good service is so rare, any company that does provide it is remarkable. I read just yesterday in a column by John DiJulius about Cameron Mitchell Restaurants (27 restaurants in 7 states). What I read wasn't about their food or their concept (though with further research I learned both are amazing). What I read about was their customer service. They seem to realize that indeed the customer is the emperor and the emperor doesn't like to be told "no." Their promise: "The answer's yes..now what's the question?" Given their growth, I think their customers remember that kind of service and find it remarkable enough to tell their friends.

Still wondering what is remarkable about your business? Here is a suggestion: ask your customers. Ask them if they would recommend you to a friend and if so why? Then listen carefully.

How ever you figure it out, do it quickly. Being remarkable is not just a good idea--it is absolutely required for any business to both survive and grow.

Get customer feedback, generate referrals, and increase repeat sales for as little as $50 a month. Learn more

Stupid Things Stupid Businesses Do

Dan Crites — Wed, 10 May 2006 12:57:26 -0700

Of course businesses aren't stupid, in fact the people in the businesses aren't stupid (I'm being kind), but they become stupid as the people in them act stupidly. How so? I’m about to explain. Before I begin I must say that I have been inspired by Pam Slim’s Open letter to CEOs, COOs, CIOs and CFOs across the corporate world.

Stupid businesses don’t grow right. They treat their customers badly. It’s likely that they don’t want to but they do because they have an environment of treating people badly. Employees are treated badly and they, in turn, treat the customers in like manner.

They don’t care about the customer
They’re rude or inattentive
They do bad work

I know there are reasons they act this way. I was in a store recently and the cashier was so worn down that she looked like a zombie. Glassy-eyed, she hardly knew I was there. She couldn’t ring a particular item up right and offered no solution to the problem. No help. It was fun to pull her out of it and find a smile, but that was for a moment and then she was back to longing for the day to end.

Last week my daughter saw an employee at a Subway drive everyone out of the building. Literally. “I’ve had it with this place!”, she said. Once she got everyone out she locked the door!

That comes from above. Managers are above. Stupid managers make stupid businesses. Stupid managers:

Overwork employees
Command in all things
Don’t accept feedback or suggestions
Frequently criticize and nit pick
Rarely give praise or recognition
Lazily expect subordinates to do their work for them
Yell and act in a mean manner

That creates an atmosphere for stupid employees. I have a son that works at a grocery store. His manager takes 10-15 smoke breaks a day. He comes back and finds that a yogurt container isn’t facing the right way and goes ballistic. It’s sad. Another son works in a clothing department. His manager always has it in her mind that the women’s part of the department is trashed. “Get over there and clean it up, it’s terrible!” Whether it is or not, that’s her message. It’s never right, it’s never good, and she doesn’t want to hear any different.

Above managers in the small business world are owners. Stupid small business owners make stupid small businesses. Let me put emphasis on small, I don’t mean small in size here, but small in quality and integrity.

They provide no real incentives to perform well
They are self serving without real regard for employees or customers
They underpay, giving only what they have to

I’ve seen a business owner pit manager against employees, lie to customers, negotiate in bad faith, and do all things for their own aggrandizement and benefit. The business started in a great, innovative way but became small because of the owner.

Stupid businesses are remarkable but not in a positive way. The famous line from Forest Gump is true, “Stupid is as stupid does.” Stupid businesses don’t grow like they could, like the owner would really like them to grow. They can be planted in a good spot, sprout and start, but they will never get the powerful fertilizer of referrals or the life giving water of returning customers to grow into what they have the potential to become.

More happy customers. More repeat sales. More referrals. Learn more

Small businesses main problem? They need more customers.

Dan Crites — Sat, 22 Apr 2006 08:48:42 -0700

In September of 2005 our company sponsored a survey of small businesses in the service areas. The purpose of the survey was to ask the business owners, many of them franchise owners, what their significant business hurdles were. The key areas of the survey were customers, growth, technology and research, and employees. You can see the complete results here.

There are many things to be learned by studying the results that you can see here, and I hope you'll find them interesting and helpful. It will probably come as no surprise that the common problems facing service businesses are:

Finding new customers does not occur fast enough
Growth of revenue is also not as fast as desired
Cutting through the advertising chaos to reach customers is difficult
The internet is providing little benefit to small businesses
Issues regarding costs and working capital are also significant.

No real surprises but it does highlight the need that small business owners have to gain new customers and get the ones they have to purchase more often. Doesn't that solve most, if not all, of the issues they identified?

The question is how to do it. Our suggestion?

The internet provides a powerful tool for communication and advertising that small business and franchise owners aren't using enough or effectively for marketing. It's called "internet marketing" or "online marketing" and it can include "email marketing". It's likely that small business owners don't know how to use internet marketing as the internet is seen as a big nebulus thing with no tie to location and most small businesses are tied to one location.

The business principles we espouse, regardless of the vehicle used to enact them, are:

Making our businesses remarkable by taking great care of customers
Listening to and acting on what they have to tell us
Giving them a megaphone to tell their friends and colleagues.

It's a simple formula for success and it works. The internet provides a very inexpensive and effective means of doing so when you use the right software tools.

The growth of your business will be determined by what your customers say about it. Do you know what they are saying? Learn more

Hot franchise business growth area

Dan Crites — Wed, 12 Apr 2006 15:28:41 -0700

It seems that Americans are putting their money where their home is. The Joint Center for Housing Studies at Harvard recently reported in their 2005 report “The Changing Structure of the Home Remodeling Industry” that homeowners and rental property owners spent $233 billion in 2003 on home remodeling. Wow! Due to the long work hours many homeowners are keeping they’re looking for help, not only with renovations, but also with home maintenance chores. Following the money trail many small businesses have started up to meet these needs and some are franchised.

CNNMoney.com highlighted seven such franchises. They are:

Garage Tek
Designs of the Interior
Kitchen Solvers
Mosquito Squad
Floor Coverings International
Spring Green Lawn Care
Home Team Inspection Service

A disgruntled customer is 5 times more likely to tell their friend than you. On average they'll tell 4 friends. Wouldn't you like to be in the loop? Learn more