Optimizing Franchises through CRM Technology
The franchise industry continues to go from strength to strength with many franchisors seeing significant uptake of licenses from people looking for the opportunity to own a proven business model and hit the ground running.
According to the International Franchise Association’s (IFA) annual Economic Outlook Report for 2021, franchising is projected to open more than 26,000 locations, add nearly 800,000 new jobs, and contribute $477 billion to the US GDP. It is also expected to experience the highest upswing of franchise sales since the last recession, which in doing so, will negate much of the damage caused by COVID-19 in 2020.
Naturally, seeing so many franchises expanding, especially during a downturn, is fantastic news, but consideration must be given to the implications of such sudden growth. For example, a franchisor must be able to monitor how each unit in their network is performing, and also quickly identify when problems arise. Failure to do so will likely result in franchisees missing their sales targets, which could be disastrous for the franchise as a whole. To mitigate this, there must be an emphasis on ensuring regular communication and adherence to systems and procedures. Yet the more the network grows, the greater the administration and oversight that is needed to manage it. This can test the organisation and efficiency of any business, which, more often than not, will have to evolve new ways of doing things.
The most effective solution to this is likely a technological one. It is no secret that tech has become a valuable asset to all manner of businesses. Across many industries “digital transformation” has become a commonly heard phrase, which at its most basic level is used to describe the adoption of new technologies by companies, in order to automate key areas like payroll or sales. Doing so is increasingly considered an essential business activity, helping to reduce operational costs, improve productivity, increase profits, and generate an overall better customer experience. It is no wonder then that worldwide IT spending is projected to total $3.8 trillion in 2021, an increase of 4% from 2020, according to the latest forecast by global research and advisory firm Gartner.
Yet achieving genuine digital transformation is often beyond the means of most businesses, requiring huge investment, fundamental organisational change, and employee reskilling, with no guarantee that it will be successful. Costs can run into the thousands, if not millions, and even when achieved, savings not realised for many years.
CRM is the essential first step toward digital transformation
The reality is that achieving digital transformation should be a long-term objective, but that does not mean franchises cannot immediately harness many of the very same technologies that are employed by the world’s most successful companies. Yet with so many digital tools emerging at an increasingly rapid pace, the challenge for franchisors is working out which ones they should be investing in now to ensure sales growth and organisational cohesion.
Customer Relationship Management (CRM) is a clear example of business-critical software and is often the first step towards going digital, being able to automate numerous mundane tasks in order to improve business efficiency. A franchisor can use it to store, update and analyse franchisee information, monitor contract renewal dates, build stronger relationships within their network, and manage sales data and enquiries.
For example, a CRM can weed out unsuitable licensee enquiries, while automatically collating potential leads, before storing the data safely in an easily accessible format. Immediately afterwards it can be passed over to a franchisor’s sales team to process. Time consuming administrative tasks are mitigated, allowing sales teams to focus on what they do best. It also helps build deeper and more effective relationships within franchise networks because interactions with them can be easily accessed in order to understand their financial value and forecast their future needs.
Analysing data to create meaningful business insights is a primary function of CRM software, whether that be the individual performance of internal departments, franchises or leads. Furthermore, a CRM will be able to create appropriately tailored communication materials using the very same information to proactively and appropriately engage with them. This could be anything from sending out celebratory messages when business is going well, or simple reminders to ensure pertinent activities are actioned.
It also should be noted that a good CRM stores your database securely in the cloud giving access only to who you want, when you want. Individual records can be locked down to specific team members, sales teams, or regions, or locked so they cannot be accessed or exported. All actions are recorded within the CRM so you can see when items have been amended and by whom. The chances of losing data or it being inputted incorrectly are entirely minimised.
Therefore, through proper oversight and organisation, a CRM helps ensure shared standards and values, high performance, mutual trust, and effective communication, which are so critical for the success of franchise organisations.
Proving the value of CRM
Over the last few years, CRM is something that franchises of all sizes are investing in. Industry leading sales and service analysts and training provider, 59club, is an example of a successful franchisor that has expanded rapidly using an effective franchising model since its creation in 2007. A market leader in the provision of bespoke performance management programs for the Golf, Leisure, Spa, Events, F&B and Hotel Industries, 59club has recently completed the roll out of a new CRM system to franchises across the United Kingdom, Europe, the Middle East, Africa, Asia and the United States.
Its purpose is to ensure cohesiveness and efficiency throughout the company’s network, but also better support member franchises through technology and statistical data, by enhancing the services they offer their clients. Whether that be sales forecasting and managing prospective business opportunities, to improving productivity via the automation of client servicing and support meetings, to basic administrative tasks such as invoicing.
The right tech can be a game changer for franchises
With the global economy facing a “slow and challenging economic recovery” according to the World Bank, businesses will have to make efficiency savings and informed, data led decisions to prosper in adverse markets. Given that industry leaders within the franchising industry understand and continually invest in their CRM, it should be clear that the technology has value. That does not mean you have to invest huge amounts of revenue to secure a strong performing CRM. There are a number of market options with a myriad of features and price tags. What is important is that you find the one that is best for you. Remember though, that training in the use of your CRM should always be part of your package, as well as implementation and support. Afterall, to get the most out of your CRM, everyone needs to be able to use it and understand how it will benefit them.
Sales Director, BuddyCRM, a CRM solution developed by salespeople for salespeople.