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Dec, 10 2012

HOW TO BUILD A PROFITABLE FRANCHISE BIZ

Of late, franchising has emerged as a popular business model. But to convert its popularity into business profits, it is pertinent that an enduring relationship with customers is maintained, in a bid to understand their tastes and preferences.

FRANCHISING is a creative business today. It is no more a shop with wares to be sold. The curator of the business applies numerous innovations to help grow the business. But first of all he has to think like an entrepreneur. He needs to have constant engagement with the customer to understand the nuances of his choice and delivering these each time within the brand standards for the customer. It is this engagement that will allow the franchise to build a relationship with a customer and convert him into a loyal customer. This engagement can be done by localising the effort, allowing the flavour of his market to be part of his business. The local customs should be one that he should celebrate and be part of the celebrations of his customers.

Knowing what customers want

The economic reforms have taken centerstage in the country and India is gearing up for yet another post-reform era. Foreign companies are looking to enter the market and retail management is going to play a very important role for franchise stores to draw more sales and profitability. And today, the challenge is to empower positive change in the franchises. Therefore, the franchise stores need to listen to their customers to not only win the battle for sales, but also set an easy-to-execute strategy in place to increase profit margins.

It is a well known fact that franchisees play an integral role for the future success and popularity of a brand. It is imperative for the franchise owners to listen and understand their customer. Regular surveys, store walks and feedback from customers will help owners feel the pulse of the business. It is also significant to look at the customers' buying habits to gain a clear perspective of their most recent behaviours. The franchise owner should also visit a nearby competitor, spend a few minutes in their store and monitor what culture they are following. Regular engagement with the customers is very important to win the game.

Ready for product customisation

India is in the midst of a retail revolution. By 2015, it is set to become one of the top five retail markets in the world. The country is also the second largest global producer of footwear. As a result, educating the customer will help them to maintain a strong relationship with the franchise owners, and will help to add value to the business. It is important to listen to everything customers have to say so that you can help them with a solution they are looking for. It's important for the aspiring franchise entrepreneurs to understand that cultural and religious beliefs of every region require certain concepts and customisation of the products, including gender separation and promotion messages adapted as per local preference.

Reaching out to customers via social media

Modern marketing is all about giving first- hand experience to the customers. The canvas for the brands has now broadened over the years. And to target the larger number of audience, social media provides an excellent opportunity to engage in a dialogue with the brand's customers by giving them personal attention. Thus challenges like retail differentiation, merchandising mix, supply chain management and competition from supplier's brands are the talk of the day. In India, as we are moving to the next phase of retail development, the endeavour is to offer a great shopping experience to the customer.

Today, Indian consumers are well travelled and know their brands well and are looking for new brands which give them commitment and quality. Therefore, the franchise owners can selectively use social media platforms with an aim to engage with their focus group through social networking websites such as Facebook, Twitter, YouTube, etc. Such platforms help to listen, engage, encourage, and support customers through newer and innovative initiatives.

Striving for novelty in products

The franchise owners can also look at revamping their product portfolio keeping in mind their guests' feedbacks. An in-depth market analysis of the changing consumer tastes and preferences should be conducted before launching any new product. While doing this, the unorganised segment will continue to innovate on service levels and personalised service in retaining its customer base while focusing on the themes and avenues to complement their business. Apart from the exquisite products, they should regularly come up with other interesting elements of engagements like providing customer feedback programme, in-store promotions, celebrating popular events.

Rewarding loyal customers

Keeping this customer centricity at the core, the franchises can also introduce a loyalty or a gift card programme. This loyalty programme for the privileged customers can offer a franchise store unmatched rewarding experiences that will further strengthen their bond with the brand. The slew of rewards and benefits would certainly bring guests closer to the brand and enhance their overall shopping experience.

Complying with these basic elements will definitely help to take the business, sales and margins to new levels.

About the author

Anupam Bansal is the Executive Director of the Liberty Group and a successful entrepreneur in the industry.

The franchise stores need to listen to their customers to not only win the battle for sales, but also set an easy-to-execute strategy in place to increase profit margins. Regular surveys, store walks and feedback from customers will help owners feel the pulse of the business

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