Centralized marketing programs are powerful tools for franchisees. Not only do they provide a streamlined way to market, they make it easy for franchisees to reach a wide audience at a reasonable cost. But if you want to get the most out of a franchise’s marketing program, you must make sure that they have a strong and effective system. Here’s what you need to know.
Centralized Marketing Program Benefits
The biggest benefit of any franchise’s centralized marketing program is the economies of scale. By pooling their ongoing financial contributions, a collection of franchisees can run marketing campaigns they couldn’t afford if they were working as individual entities. For example, television advertisements, national radio ads, and massive online ad campaigns can quickly become too costly for a single franchisee. By working together, franchisees can reach a larger market share by using powerful and expensive marketing tools for a reasonable fee. Here are some other benefits:
- Centralized administration.
Hiring vendors, buying space, and tackling design and branding can all be handled by one entity instead of each individual franchisee. - Lowered expenses.
By purchasing large printed quantities of materials or services in bulk, the franchise can secure lower prices than an individual franchisee. - Unified brand.
When one entity controls the branding for the franchise, all marketing sends a uniformed and more powerful message about what the company offers customers. - Access to more data.
When the franchise runs campaigns they can see all data collected from customers from across all regions. This allows the franchise to see customer trends and understand what’s working or not working. It can even give insights into what products or services they should offer in the future.
While there are some solid benefits of a centralized marketing program there are some drawbacks potential franchisees should think about.
- Failure to meet local needs.
Sometimes centralized marketing programs fail to create marketing materials/campaigns that speak to local needs. This is usually the case with marketing programs that have been poorly implemented. - Top-down strategizing.
All centralized marketing programs usually have one department that makes the final decision on marketing strategies. But well-run programs listen to franchisees. However, the potential drawback of this type of marketing system is that sometimes the “top-dog” in the administrative office fails to take seriously the suggestions or needs of the franchisees that are depending on them.
Best Practices
When you’re looking to buy a franchise, you need to make sure that their centralized marketing program is following best practices. Here’s what you should look for:
- Campaigns drive customers.
When it comes to marketing “building it” doesn’t guarantee that customers will knock on your door. Make sure that the franchise’s past marketing campaigns have been effective in delivering customers to franchisees. - Listens to franchisees.
No one is better qualified to strategize about marketing than those who understand the customers. Smart franchises understand that franchisees are the people who are closest to the customers not someone in headquarters. That’s why some franchises have systems set up to receive franchisee feedback and suggestions about marketing campaigns, branding, and marketing materials. And many franchises have “franchisee advisory boards” in place so that there is a standing committee that will speak on behalf of franchisees when marketing strategies are being created. If a franchise has no system for receiving franchisee feedback and suggestions for their marketing, this is a serious red flag that the centralized marketing program may be failing to meet franchisee needs. - Makes good investments.
The trick to marketing is putting your money in the right place so that you get the type of results you need. Some franchise marketing programs get this right while others fail miserably. There are three main areas of investment where marketing dollars must go:- Administrative.
Paying salaries, agency fees, and other expenses related to administering the marketing program. - Advertising materials.
Paying for the creation of all marketing materials such as printed ads, brochures, radio ads, television ads, and online ads. - Placement.
Paying for the spots where materials will go such as magazines, websites, television or radio stations.
- Administrative.
There is no magical number for getting this investment split right. The investment portioning that works is the right one at the time. However, there are some investment splits that are so lopsided that you know immediately that it’s off. So, for example, if you notice that 80% of all marketing investments go into administrative expenses, it’s probably an ill-managed program. In any case, don’t be afraid to ask questions when something seems off.
- Franchisee satisfaction. Pick up the phone and ask existing franchisees how they feel about the marketing program. Are campaigns delivering the results they expect? Are they listened to? How do they feel about the marketing investment split? Many franchisees will be quite upfront with you about their experiences. If you notice that the majority of the franchisees are dissatisfied with the marketing plan, it’s a bad sign.
While no franchise is going to let you pore over the details of their marketing system document, you should ask them about it and ask to see the table of contents. How long have they had a written marketing system? How extensive is it? Do they have effective systems set up to support franchisees? The most important thing is that this document exists and that the franchise has a proven system for marketing their brand. If they don’t have a written document for their marketing system this is a huge red flag.
If you’re looking for a franchise that has a strong marketing program, take the time to investigate and ask the right questions.
