How to Increase Franchisee Revenues with Core Service Offerings
In an era of on-the-go lifestyles and customer-centric business models, many concepts adapt with the one-stop-shop approach when in some cases, that strategy actually decreases customer convenience and satisfaction. An approach some brands should consider is sticking to what works, which often means focusing on core or “single-service” offerings.
To say a concept is single-service is not to imply that it only has one offering in the literal sense, but rather it has one service or product that intentionally overshadows all others. For example, Take 5 Oil Change is known for its drive-thru oil changes, but also offers a few additional automotive maintenance services. These additional services are not our main consumer proposition -- the brand’s strategic focus is on oil changes, which is what we’re known for and do best.
Many franchises shift their focus to expanding their services to increase their average invoice amount, while in many cases, they should be going back to the basics and sticking with their “bread and butter” offering. You may be surprised at how a certain level of simplicity can actually boost not only customer satisfaction but also franchisee success. Here is how it works:
Build Loyal Customer Followings
There are many reasons why focusing on one or few core offerings can be beneficial from a consumer standpoint, and arguably the most important is customer convenience. In today’s fast-paced world, people are always on the go and in a hurry – they crave convenience. Keeping services streamlined can simplify the customer experience, reduce high-pressure sales tactics and accommodates their lifestyle.
It is important to keep in mind what convenience means for your customer profile in relation to your concept. For instance, getting an oil change is something most people consider an inconvenience in their day. However, the interruption can be kept to a minimum by offering a quick in-and-out option that doesn’t crowd customers with additional services or has employees distracted by other tasks.
If your goal is to focus on one core service, that service must be perfected and efficient. Your concept can offer all the convenience in the world, but if consumers are not consistently satisfied and able to rely on the business, they will never become loyal customers. By having one specific specialty, franchisees and their employees can become experts in that offering, which directly translates to higher customer repeat rates. And, these outcomes result in loyal customer followings, since consumers typically prefer to return to places that they are already satisfied with instead of shopping around for a new source.
Streamline Franchisee Operations
In addition to offering convenience to the consumer, a business model focusing on a core offering can heavily benefit franchisee efficiency. From an operational standpoint, the fewer services or products there are to oversee and sell, the more time there is for franchisees and their employees to build and maintain a thorough knowledge of that service or product.
When employees know the ins and outs of the business offerings, they can service customers more effectively and efficiently, which correlates to customer satisfaction. As an added bonus, this kind of streamlining and efficiency can get more customers serviced, ultimately increasing franchisee revenues.
Depending on the concept, streamlining operations and developing employees into true experts in the franchise’s core offering has the potential to reduce the number of staff members. For instance, rather than having one expert on each offering, you can have a smaller leadership team, complemented by fewer employees who are all laser-focused on one service. Reductions in staff can mean lower overhead, keeping franchisees in the black.
At the unit-level, single-service concepts can also impact employee satisfaction. With staff focused one clear goal and provided with the tools to do it, their job satisfaction often improves. Employee retention is an ongoing battle franchisees face, and business models that work to keep employees engaged and fulfilled can lead to better run locations and happier, returning customers.
Implement a Winning Strategy
Franchisee outcomes are strongly influenced by loyal customer followings and streamlined operations. With core or limited service offerings, franchisees can operate their business with greater efficiency, and in return, build lasting relationships with customers by catering to their needs, whatever they may be in a given segment.
So, when looking to purchase a franchise, don’t get distracted by the flashiest concepts out there. Sometimes, models with the most straightforward consumer propositions are those that will get you the most profitable and rewarding outcome as a franchisee.
As a seasoned aftermarket franchise professional and Vice President of Franchise Development at Take 5 Oil Change, Ted Rippey launched the Take 5 franchise initiative in March 2017 and oversees the brand’s ongoing growth. Before joining the Take 5 team, Ted served as the Chief Compliance Officer at Driven Brands, the parent company of Take 5. In that role, he oversaw all franchisee compliance matters. Prior to joining Driven Brands, Ted, along with his father and brother, founded 1-800-Radiator, a wholesale auto parts distribution franchise.