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Who says all franchisees must be treated equally? Or that all customers must be treated equally? Both notions are nonsense! Worse: They’re fiscally irresponsible.
Customer entitlement must be earned
Today I’m at the Las Vegas Hilton, just hours before speaking to a major convention, and there’s no place better than a Vegas hotel casino to emphasize the point that customers (including franchisees) must earn their entitlements.
No fortune on the wheel
This trip isn’t underwritten by a client (though it’s in cooperation with the International Franchise Association), so I’m on my own financially. However, other than tip money, and 20 bucks that I invested in a Wheel of Fortune machine, I haven’t dug too deeply into my pocket for expenses. I’m a guest of the Hilton, but not because I’m a Casino Whale or even a Big Gambler . . . I’m here as a guest because I earned that right as a loyal customer.
For all of my career, I’ve been a loyal Hilton customer, and during the past 30 years, considering the convention business that I’ve helped direct to the property, I’m responsible for sending at least hundreds of thousands of dollars to the Hilton. Yes, it’s an old, off-the-strip property, but it’s conveniently located adjacent to the Las Vegas Convention Center, which is ideal for franchise conventions.
The stage is home to Barry Manilow
Barry Manilow loves the hotel! Okay, so that tells you something about the age of the crowd that you’ll find at the Hilton, but be careful! My wife and I enjoyed Barry’s energy-charged performance a trip or two ago, and loved it. That show was also comp’d by the hotel — and again, because I earned the privilege by being a loyal customer.
Who’s entitled to anything more?
And that’s my point. Other than what’s guaranteed by their franchise agreement, franchisees aren’t entitled to anything more than what they earn as a result of their performance. Other than world-class products and services, customers aren’t entitled to anything more, either.
Good franchisees never argue with that point — they understand it, they accept it, and furthermore, they expect it. They want to be rewarded for what they produce and not just because they signed a franchise agreement.
Maybe all they want is a tasty cherry pie
Customers — and franchisees are customers — should be treated similarly. Just because they come into your pie shop and buy a cherry pie, or they pay to go through your car wash, or they invite you into their home to fix their toilet, that doesn’t entitle them to anything more than a tasty cherry pie, a clean vehicle and a toilet that flushes!
The minimum doesn’t earn any extras
Franchisees who follow the franchisor’s system and pay their royalties are just doing what’s expected of them — nothing more. It’s what they agreed to do. However, some franchisees exceed what’s expected of them — they go far and above the norm — and those franchisees deserve to be rewarded. They’ve earned their entitlements.
I got to the buffet much faster
Point in case: This morning I could have waited with dozens of other customers in the buffet line at the Hilton, but I was entitled to get into the shorter line, reserved for VIP guests, including members of Hilton Honors, which is how I’ve scored most of my points.
Differentiation makes the difference here
Hilton — and other customer-conscious businesses — has worked at differentiating its customers so that they can reward them appropriately. They know which customers are entitled to more and — as a way of thanking them, and encouraging them to return — they provide these customers with certain entitlements, like a shorter wait in the buffet line, an upgraded suite with amenities, and a trip to the spa.
Because Hilton rates their customers by their performance, they can differentiate the best customers from the customers who are just passing through, although some of them may be in training to become best customers.
Can you do that?
Do you know who should get the entitlements?
Do you know who your best customers are? Do you know them by name and by entitlement? If you’re like most small business owners, including franchisors and franchisees, probably not.
You’re in a no-win position
So when your franchisee complains that you did such and such for another franchisee and the franchisee demands equal treatment, what are you going to do? If you meet the complaining franchisee’s demands the news will spread quickly to other franchisees and soon you’ll be giving away much of what you should keep, including profit! Of course, if you say no, you risk upsetting a franchisee and then potentially the entire network.
Either way, you can’t win. That’s worse than Vegas — at least here they give you a chance to win!
Set yourself up to win
The way to win with customers — and franchisees — is to differentiate them. Then you can explain to a complaining franchisee that entitlement is earned at your company . . . all franchisees have equal opportunity, but it’s up to each franchisee, or customer, to produce more to get more. Those who produce beyond expectations get the better entitlements.
Don’t confuse fairness with equal treatment
It’s really as simple as that . . . and yet, because we’re hung up on what we think is fairness, when it’s really a matter of equal treatment, franchisors make poor decisions about how they treat franchisees. Franchisees make even poorer decisions about how they treat customers. And both lose.
Think about it . . . and better yet, do something about it. Start by identifying your best customers! I’ll tell you how in a future blog.
Now, I’m off to the spa to relax before my presentation. Thank you, Hilton!
Photo image by: Dennis Wong
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