In 2023, franchises are at an inflection point, as pressure on the traditional franchise model builds from multiple directions. New regulations are chipping away at franchisor protections leading to major shifts in overall training, budgeting, and marketing strategies, while evolving customer demands, spending habits, and brand-savvy are making once-successful corporate branding strategies feel obsolete.
Whether squeezed franchisors want to recognize it or not, marketing is still an essential part of any business, from high-level brand awareness to hyper local performance campaigns; and franchises need to be empowered to innovate, engage with local customer bases, and hone in on effective marketing strategies if they want their stores to perform.
The top 3 areas to focus on for franchise marketers today are:
- Radically different customer habits with a much stronger focus on home delivery, e-commerce, recession-mindset price comparisons, and value-based purchases.
- Client retention by emphasizing brand loyalty - a cost effective strategy that is especially important for younger buyers who both care more about brand values but are also the least brand faithful. Address both concerns with a strong, consistent, customer-focused brand identity.
- Channel and messaging innovation. Although some franchise marketers might be tempted to tighten their budgets until inflation goes down, they should instead focus on effective, innovative, and scalable solutions in order to save on the long-term, and beat their competition on the short-term.
In this article, we will look at the best way to manage the franchisor/franchisee relationship, the importance of brand awareness at every level of the customer journey, effective customer targeting, new marketing channels, and success measurement. Let’s go!
A house divided: make the most of the franchisor - franchisee relationship
Before even entering into a franchise relationship, it’s important for franchise advertisers to understand what their franchisor is committing to, especially as the latter are legally held less and less accountable to their business partners. For example, it is common for contracts to outline an average amount franchises can receive from corporate, but the franchisor is not obligated to spend one penny of a specific franchise’s monthly brand fund contribution within their market.
In fact, small markets are sometimes stuck contributing money into a “mutual brand fund,” when the money is spent in larger metro areas with greater density of operators who are generating higher royalties for the franchisor, and end up subsidizing larger markets without having anything to show for it.
Franchise owners and advertisers need to manage marketing budget allocations very carefully in order to meaningfully contribute to overall growth, customer retention, and effective day-to-day operations on the local level. The health of a franchise can only be maintained on the long-term if all parties are committed to:
- Transparent budget allocation. Often a point of contention, advertising budgets must be allocated fairly and in a fashion commensurate with market expectations in order to meet both regional and national expectations.
- Fine-tuning ongoing operations based on regional customer feedback.
- Consistent brand support. Franchisors typically do most of the brand identity heavy lifting on the national level, but it’s important that they supply relevant, impactful marketing assets to their franchisees who, in turn, must maintain a consistent brand identity, while also catering to local tastes and expectations. Consistent brand marketing, however, doesn’t mean one that doesn’t allow for innovation. In fact, according to a recent Deloitte report on the health of the franchise industry, expectations surrounding innovation and refreshing national brands have never been higher. Having an innovative and exciting brand isn’t an option any more. It’s a must-have.
Capitalize on solid franchise brand awareness
Here’s the thing about franchises: a good corporate franchise entity should already be taking care of all the brand awareness a local franchisee needs, with the support of national scale campaigns and glossy graphics. What franchisees need to focus on, conversely, is getting customers to their hyper-specific locations.
A franchise owner in Memphis, for example, doesn’t want to spend its advertising budget getting a customer to go to any Checkers, they want them to go to the Checker’s store on the corner of Lamar and Harbert Avenue. That’s where strategies with a strong focus on targeting, customization, and local sponsorship come in. You already have the brand, the credibility, and the product — what you need is local targeting to get customers in the door.
Because most corporate brand identities are pretty much set in stone, franchises with consistent yet innovative messaging aimed further down the sales funnel are set up for success. Here’s how to do it.
Franchise advertisers need to leverage integrated marketing communications to maintain a consistent national brand image while remaining relevant to their particular markets. Consistency with colors, images, messages and themes used within their campaigns as a whole should serve as a North Star as they implement targeted, down-funnel campaigns on social, TV, billboards, or paid search. The stronger the corporate identity, the more freedom franchises have to adapt to their markets.
Take the Cotton brand, for example, a 2021 study showed that "8 out of 10 consumers are aware of the trademark, and 86 percent say it helps them make informed purchasing decisions." Having consistency within all forms of marketing allows a brand to build trust, become more recognizable, and reach a greater audience while also creating a meaningful brand no matter the angle you are advertising or what channel local franchises are using.
At the same time, campaigns need to remain fresh and innovative to make a difference in-market: the media landscape is shifting faster today than it ever has, as privacy regulations radically disrupt the digital marketing landscape and consumers continue to lose interest in “traditional” media like mailers, radio, Out Of Home, linear TV, etc.
So no matter the pedigree of the corporate marketers creating overall brand strategies for franchises, it’s important to remember that customer feedback and locally relevant market insights are key to bringing any larger campaign to life.
Don’t be afraid to try something new! Explore new social media channels, digitally engage with local customers, try streaming TV advertising, explore QR code promotions… It takes the knowledge and research of skilled marketing professionals, particularly in the franchise space, who bring new ideas and tactics while understanding the goals for your business.
The reason franchise advertisers can push the envelope where corporate marketers wouldn’t is that their goals are different. They’re not focusing on the top of the funnel, instead focusing on doing some damage lower down with performance-focused campaigns and laser sharp CTAs. The point isn’t to develop high level brand storytelling, but rather to meet local customers at the right time, in the right place, in the right way.
People buy from people: target and engage your local customers
Customer segmentation and targeting
Franchises with smaller budgets should be especially focused on driving results and limiting wasted impressions, which can be difficult when advertisers are stretched thin. It’s important, in those cases, to work with marketing channels with precise targeting capabilities, like streaming TV advertising, some social media platforms, or Google ads, that are then deployed in ways that are relevant to specific audience segments.
The point is for your immediate customers to feel seen and spoken to in an authentic way. McDonald's, for example, has mastered the art of audience segmentation by separating many offerings into categories and directly advertising to matching customer groups. The company has its $1 items for budget savers, McHappy Meals for parents and kids and even a range of options in its vegetarian offerings. The media and channels of marketing vary for each segment — when advertising to a younger audience, they would be on TikTok or streaming TV, whereas an older audience would receive more print or radio ads.
Engage customers on a store-by-store basis by training your staff to ask the right questions and engage customers in a way that will male them want to come back and - most importantly - recommend your store to others. Are you looking for a new flavor? A fun activity to offer kids at the store? A merch item that will delight your home repair customers? Ask for customer input! You will be conducting local market research and creating brand loyalty beyond anything a national campaign could offer. Post poll or taste test results online and ask for more feedback! Involve your store employees too! Again, people buy from people: keep that motto at the center of every aspect of your franchise marketing, from the store layout to the way employees are trained to the messaging you share on social media.
Community involvement and sponsorships
Repeat customers from the community surrounding your franchise can be your biggest supporters and generate a ton of organic content, given the right incentive, so make it a regular practice to get your franchise and employees involved with community events. The key here is to pick events that are highly visible and where your presence will make a genuine impact, like local school sponsorships, disaster relief fundraising, senior center donations, etc.
7-Eleven, for example, is further burnishing their reputation as a neighborhood staple by commissioning - and handsomely paying - local artists across their thousands of stores to create in-store murals reflecting the community that particular store is in. They were recently shouted out in Entrepreneur.com where the author continued: “It's important for franchises to show their customers they aren't just about making a profit, but also about providing for a community. People who regularly purchase products from neighborhood stores appreciate being recognized by employees and like to support companies that give back. By putting profits back into the neighborhood they belong to, franchises gain the respect and trust of local customers. Moreover, becoming the talk of the town will bring in even more business.”
The days of “one and done” marketing campaigns where a snappy tagline could carry an entire campaign for months are long gone. Customers today expect to have a much more intimate relationship with their favorite brands, often turning to social media for anything from product questions to scathing reviews to witty repartee. Either way, connecting with consumers should be a major part of any franchise advertising strategy. Use social media in a way that is interactive for them by posting polls for input and quickly responding to comments. Having passive content doesn't work. Instead, be consistent with personalized blog posts, graphics and video content while thinking about consumer behavior and how you can show your customer how your product or service will satisfy their needs.
Scaling a hyper-local approach
While local, customized efforts are key to franchise advertising, you will need to find ways to scale those campaigns in order to have a significant impact. This is where you may want to consider programmatic media buying for display, social, or streaming tv campaigns in order to activate localized campaigns across regions. This way, your multi-location business can deploy brand awareness campaigns targeted to specific zip codes with dynamically inserted location information for the closest dealer, retailer, or franchisee and viewers will see a brand compliant ad-spot with a local call-to-action, driving more immediate demand.
Video marketing: a franchise’s best friend
Video marketing has been on an inexorable rise for a decade now and all signs point to continued growth. In fact, video is on trajectory to make up 82% of all internet traffic in 2023. Franchise marketers can leverage this trend by creating engaging videos across platforms to showcase their products or services, highlight customer testimonials, and give a behind-the-scenes look at their business.
Don’t worry: in today’s age of User Generated Content (UGC), customers are not expecting an Oscar-worthy performance. Fun, people-focused, straight to the point videos with clear CTAs are the way to go here. No need to be subtle. Three great ways to leverage videos in a variety of lengths and formats are with:
- Social media. Remember, the point of franchising is to facilitate overall operations and marketing, so don’t overthink big picture items like graphics, taglines, or brand voice. Instead, focus on driving local traffic with neighborhood specific hashtags, local customer highlights, a location-specific social media account that will allow you to monitor local sentiment and customer needs more accurately, and a clear set of actionable goals and KPIs for your particular location. Make sure your social media messaging will reach the right audience by picking the right platforms for your audience (Meta, LinkedIn, TikTok, etc.) and tracking conversions on the short and long-term.
- DOOH (Digital Out Of Home). DOOH includes digital billboards of all sizes, as well as specialized placements like office building elevators, gas station pumps, taxis, and doctors’ offices. While billboards may feel outdated, they’ve been going through a quiet digital revolution of their own, becoming easier to manage and easier to monitor traffic with. Dan Levi, CMO at Clear Channel Outdoor, explains: “Mobile location data allows us to measure audiences, but also consumer behavior, anonymously and in the aggregate.” That means franchises can easily place, edit, and move their Out Of Home advertising based on results. Instead of placing billboards within a certain radius around your business, you can place digital messages on routes frequented by consumers who shop your category or your competition.
- CTV (connected TV) advertising. A relative newcomer to the advertising landscape, CTV, or streaming TV, ads and franchise campaigns are a match made in heaven for a bunch of reasons. While franchise advertisers might be hesitant to work with a historically expensive medium like television, the advent of streamed content has completely transformed the way TV spots are bought and sold. In a nutshell, CTV ads bring together the cachet and premium storytelling environment of traditional TV with the targeting precision of digital advertising. That means franchise marketers can now reach households in close range of their business, who fit a certain set of criteria (interest, income, demographic, etc.), right on their TV screens. Consumers expect more personalized experiences from the brands they interact with, and franchises are no exception, so it’s especially important to be able to tailor your ads to specific customer segments, which is simple on CTV ad platforms that offer real-time reporting, retargeting, A/B testing, and more.
Test, measure, repeat - a winning formula
Ultimately, no strategy will ever yield the results advertisers are looking for if they are not carefully monitoring results and optimizing their campaigns as you go. No matter your advertising budget, you should develop an omni-channel marketing strategy in order to make an impact on your customers’ journey. You will need different outreach and measurement strategies to understand that bigger picture by looking at a holistic media strategy and tying all the various pieces together.
For example, a customer could see your display ad on their favorite website, click through to your website to check out your offerings, then go watch their favorite show. If you’re working with a CTV ad platform with pixel tracking, you could set a pixel on your site and retarget that very same customer on the big screen with an un-skippable ad right as he’s watching Yellowstone (for example 😉). He could then use the phone that’s probably in his hand (92% of CTV users report watching programs with their phone or tablet handy) to place an order/request a demo/enter a promo code at that same moment!
Make sure all of those touch points are a) available to your customers and b) measurable on the backend with tools like Google Analytics platform integrations, MMP (mobile measurement partners) if you have an app, CTV pixel tracking, etc.
By focusing on targeted, measurable campaigns across social media, Digital Out Of Home, display, and streaming TV ads, franchise advertisers can expect more conversions and fewer wasted ads across locations and industries.