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Do you know how many piercings your customers have? And where? . . . Do you want to crack the code or don't you?
Wouldn’t you like to know when you’re about to sell a franchise to someone who’s going to become one of your Worst Franchisees?
Wouldn’t you like to know when you’re about to sign an agreement with the Customer From Hell?
Do you know enough about your customers?
I’m surprised by how surprised franchisors, franchisees and suppliers are when a customer turns into the Worst Customer (or even the Best Customer). I’m surprised only because franchisors, franchisees and suppliers often don’t know enough about their customers — no wonder they’re surprised. They should be!
But they don’t have to be.
The value of customer intelligence
Many years ago I was delighted to read a book by an envelope manufacturer and salesman (Harvey Mackey) in which he explained the importance of keeping detailed information about his customers — he compiled a long list of questions and answers for each of his customers, especially his most valuable customers. He never allowed that info out of his control and he memorized much of it, especially as it related to his Best Customers.
This author — hugely successful as a salesman, ala Trump — was the first person to help me understand the importance of knowing intimate information about customers. (I liked him because he understood the value of writing a book to promote your business — and he wrote several best-sellers).
You may decide not to keep certain customers
The more you know about a customer (and of course a franchisee is a customer), the more capable you are of keeping a customer for a lifetime — if you choose to! And, the better prepared you are to find more customers just like your Best Customers!
Back when I read Mackey’s book (at the time my company was based in Philadelphia, the greatest city in the world) I immediately created my own Customer Intelligence program, and appointed myself the Director. Later, as a franchisor, I valued Franchisee Intelligence equally as much, and I hope you do, too, if you’re a franchisor.
Knowing what customers share in common
However, it’s disappointing to see how little franchisors know about their franchisees, including why they bought the franchise, how they learned about the franchise, what influenced them to pay the franchise fee and sign the franchise agreement, and what the Best Franchisees and Worst Franchisees share in common.
As for franchisees and suppliers — come on now. You’re often lacking this critical information, too!
This is what you need to know
As a franchisor (or a manager charged with marketing and customer development) here’s what you need to know, at minimum, about your franchisees:
- How did your franchisees learn about your franchise opportunity?
- What, specifically, interested them in your franchise opportunity?
- How did they contact you to get additional information?
- What is their highest level of formal education?
- What was their profession prior to buying a franchise?
- Are they single, married, divorced?
- What are their top 3 long-term goals?
- What is their exit strategy from their franchise? And when will they implement it?
- Titles of books and periodicals they have read in the past 12 to 24 months?
- How do they get information, i.e. newspaper, radio, TV, Internet?
- What are their hobbies?
- What charities do they support?
Drill down to get details
You must get specific information. So while you may be able to get most of the information by a printed questionnaire, expect to use the telephone and drill down to get specific answers.
“I read about the franchise opportunity somewhere,” isn’t a specific response. “I read about the franchise opportunity in Reader’s Digest magazine,” is a specific response. “I plan to make a lot of money as a franchisee,” isn’t a specific answer. “I plan to put $3-million in the bank by the time I’m 45,” is a specific answer.
Your Director of Customer Intelligence (which may, in fact, temporarily be you, even if you are the company’s Founder or CEO) needs to have specific information in order to make good marketing and operations decisions moving forward.
Franchisees and suppliers need similar info
If you’re a franchisee or supplier, you must have similar information about your customers. In addition to some of the above information, you also need to know:
- Why are your customers buying from you?
- What do they see as your differentiator? (Poor you if they say “price”)
- Do they also buy from any of your competitors? If so, why? And how much do they spend? (What will it take to get 100% of their money?)
- What do they tell other people about you or your business?
Once collected, save all this information in your Customer Intelligence database.
How’d you get along with mummy?
Not long ago I read that a psychologist suggested franchisors find out how well a prospective franchisee got along with his or her mother — because that was an indicator of success in business! That’s not a question I’ve ever asked, though I’m not opposed to it. Would be interesting to know if it made a difference — and if it did, wow, that unlocks the code all the faster, doesn’t it?
Could piercings and tattoos foretell business success? Don’t know, but nowadays it may be useful information to collect! What if your Best Customers all came with five piercings in their right ear? Can you see how that not only would increase your profits, but reduce your marketing expenses, too? Not to mention cracking the code to franchise development!
You must know your best customers
You must also know your customer standings. Who are your Best Customers or Best Franchisees? Remember, your Best Customer is the one who pays you the most money in the least time and follows your system!
Rank order your customers (franchisees) by their value. (You should do that at least monthly).
Check to see the “connectors” they have in common
Your Customer Intelligence database becomes more valuable and actually goes to work for you when you use it to cross-check information about customers.
- What, if anything, do your Best Franchisees have in common?
- What, if anything, do your Worst Customers have in common?
- How about all the customers in the mid-range — do they share “connectors”?(Are they all golfers, for example? Were they all marketers in a previous life)
Congratulations, you’ve cracked the code
You may need to expand your database by asking more questions — as you do, you’ll eventually find the “connectors.” For example, when I was CEO of the We Buy Ugly Houses company I discovered that our Best Franchisees were previously top sales people — not always, but often enough to make it a “connector.” Therefore we wanted to sell franchises to more top sales people!
Celebrate when you find the “connectors” because that’s when you’ve cracked the code to franchise development!
Addressing the naysayers
Some franchisors, franchisees and suppliers will say, “You can never avoid selling to people who will end up as your worst customer (or franchisee).”
True, but only because there will always be a Worst Customer. Someone’s always going to come in last!
The insight is valuable
However, your Customer Intelligence at least gives you more insight to the future development of a franchisee. If your franchisee applicant exhibits the “connectors” of the Worst Franchisees, chances are pretty good you’re about to sign on a future Worst Franchisee! You may decide to go ahead and do it anyway, but at least you’re now doing it while knowing what to expect.
Hey, that’s one way not to be surprised!
Customer intelligence shows you what’s missing
Look at it another way: By developing Customer Intelligence, you’ll learn how to develop a Best Customer or Best Franchisee. Once you understand your customers, you understand their why, how and what factors, you can develop training and support programs to provide and enhance those factors.
That’s how you turn a potential Worst Customer into a not-so-bad customer, and possibly even a Best Customer!
But nothing good is going to happen until you start asking and answering questions about your customers and build your Customer Intelligence program!
Webinar: How To Capture & Keep The Right Customers
Interested in learning How To Capture & Keep The Right Customers? That’s been my most popular live seminar through the years and while I’m still teaching it at franchise conventions, the economy has discouraged me from scheduling a public seminar. That’s why I’m turning the seminar into a Webinar. In the near future I’ll post a date and time when you can get this valuable information live, online, when you join my Webinar. Interested? Franchisors: Line up your entire network of franchisees for this important information! Franchisees and Suppliers: Invite your most valuable customers to join the Webinar — in fact, pay for their registration as part of your customer retention plan! If you want the details sent directly to you, click here. Be sure to let me know that you want info about the HTC&K Customers Webinar.
Photo image by: vieux bandit
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