Buy A Franchise System That Helps You Capture And Keep The “Right” Customers

May 15, 2009 1:16 pm Published by Leave your thoughts

franchise-system-customer-retentionNowadays it’s important to buy a franchise that teaches you how to capture and keep the “right” customers and the importance of doing so.

Actually, that’s always been an important consideration, but you’ll have to work hard to find a franchise system that provides this critical consideration. Most franchisors do not do a good job of teaching franchisees how to capture and keep the “right” customers . . . nor do they support systems that will help achieve same.

Not all franchise systems are created equal

But remember, all franchisors are not created equal, thus not all franchise systems are created equal. Some are better than others. You’ve got to look for the world-class performers! Be confident: They’re out there.

Franchisors (and as a result, their franchisees) generally do not understand the value of a customer. (I’ve written about customer value at and I urge you to review those articles. You should also view my videos on this topic).

Budgeting to retain customers

A customer’s value is not limited to a one-time transaction, and yet, many people in business seem not to know that. They spend money and work hard to get a customer to buy from them the first time, and seem not to understand that the same customer could buy from them dozens or hundreds of times more. Perhaps these are better recognised as “loyal” customers.

In general, customers are ignored.

Just think for a moment of how many businesses ignore you. When was the last time you heard from your favorite restaurant? How about the dry cleaner that you frequent every week? When was the last time you heard from your barber, chiropractor, or auto mechanic? Has the pizza shop you’re loyal to done anything for you recently? . . . Ever?

Some business people, in fact, not only are ignorant about the value of a customer, but they don’t realize that every customer comes with a cost.

Customers are never free. Every business pays a fee to capture a customer. So why ignore them?

Keeping customers is rarely ever discussed in business or franchise circles. Franchisees are generally more concerned about where to get the next customer, i.e. how to make the phone ring, or how to bring people through the door, and they rarely focus on customer retention.

Of course, whether they capture and keep the “right” customers is a whole ‘nother story that we’ll tackle at another time.

This is why you buy a franchise

As a franchisee, you’re not expected to know everything. You’re not expected to be an expert. And you’re surely not expected to be a customer acquisition and retention expert (though you may need to be). And that’s part of the reason why you buy a franchise.

You’re buying the franchisor’s system, which may or may not help you capture and keep the “right” customers. That system better be a good one for identifying the right customer for your business, then capturing the right customer, and then (and this is so important, especially today) keeping the right customer.

Why is keeping customers so important? Because a returning customer costs less than a new customer, and If you don’t retain customers you may go out of business. At a minimum, you will be less profitable and in a situation where you are required to pay a royalty on gross sales, saving money by retaining customers is critically important.

Evaluate the franchisor’s ability to capture and keep the “right” customers

As you evaluate a franchisor’s operating system, keep this information in mind. If the system can’t help you capture and keep the “right” customers, move on. Find another system! Because economically, nothing is more important than the right customers . . . ignore customers, lose customers, and worse — attract the wrong customers — and you’re going to be a very dissatisfied franchisee.

And a franchisor that doesn’t know how to capture and keep the “right” customers cannot come to your rescue. Save yourself the agony: avoid that franchisor. 

Photo image by: roland

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This post was written by Dr. John Hayes

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