The Secret to a Successful Franchise? A 'Community'-Based Business
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When he launched Starbucks, Howard Schultz had a goal: to make his coffee shop the "third place" in a consumer’s life after home and work. Many successful years later, Starbucks is not just a place to grab coffee on the go; it has become a gathering place for friends, a study hall for students and a makeshift conference room for those closing business deals. In other words, Starbucks created a "community" to call its own.
This business approach is one that all savvy franchisees should take note of for inspiration, and here's why: According to a 2017 study conducted by Square and BigCommerce, the majority of consumers now prefer to do their shopping online. To them, the convenience of ecommerce beats the in-person experience brick-and-mortar establishments offer.
As a franchisee, though, you need to combat this trend. And you can do that by building and fostering a sense of community at your store. For nearly 30 years, I’ve watched entrepreneurs open health clubs, and without a doubt, the most successful ones have been those who turned their franchises into communities. In my field, that's just a no-brainer. Your clientele frequents your business several times a week, making it almost second nature to foster a community.
Sure, health club franchises may have an advantage. Members who spend an hour or more each visit gain face time enabling them to get to know trainers and staff on a personal level and establish more organic, genuine relationships.
But that doesn’t mean it’s impossible to do the same with other types of franchises, even those with relatively short customer interactions. Once you understand the value of community, you can commit to creating and maintaining your own business's unique culture, following these three steps:
1. Get on a first-name basis.
In 1936, Dale Carnegie wrote, “Remember that a person’s name is to that person the sweetest and most important sound in any language." Today, science confirms Carnegie's theory: fMRI imaging shows that the simple act of hearing someone else say your name stimulates your brain in ways no other experience can. Not to mention that it's common courtesy to remember and use someone's name.
When I worked in health club sales earlier in my career, I’d look across the gym floor and try to name every member I saw. If I drew a blank, I’d muster the courage to introduce myself. After doing this for a while and learning all the social circles in the club, I turned those relationships into revenue. That year, I was named “Salesperson of the Year” by the International Health, Racquet & Sports Club Association, and I made a heck of a lot of new and genuine friendships.
So, encourage your own team to learn and use customer names all the time, or at the very least, urge them to involve names when saying "hello" and "goodbye." If that doesn’t work, get creative the way Starbucks did in 2012 when it offered customers a free drink if they introduced themselves to a barista.
2. Make it personal.
Most people are notoriously bad at remembering details about one another. But when your team members care enough to remember those details and let your customers know -- even if it's as simple as remembering those people's workout or drink preferences -- your franchise can make a meaningful impact.
Build a team of dynamic listeners who understand that trust is built when people show a genuine interest in one another. Urge them to remember and reference personal details about customers; that shows that your company makes a habit of listening and cares about clients as human beings.
You can personalize customers' experiences in big and little ways. Take Southwest Airlines, for example. After hearing that a passenger's bag containing her gear and running shoes for a relay race wasn't at baggage claim, an airline employee took the initiative and drove three hours to deliver the bag when it did arrive. This saved the passenger a trip to the store and went above and beyond a generic apology for the inconvenience. Ultimately, the employee turned a customer's stressful experience into a personal and thoughtful one.
Many of our Crunch franchisees have built teams that get to know more about members than their personal fitness goals. They know what their kids are up to, if someone’s about to graduate, if a family member is sick, who’s getting married and so on. These teams do more than develop relationships with customers -- they establish friendships.
3. Be the spark.
Building a community at a franchise must start with you -- the leader. According to a study by Kelton Group, only 26 percent of people surveyed said they felt that their managers practice what they preach. What sort of example are you setting for staff if you don’t bother to embody your company’s values?
Lead from the front, and forge deep relationships with your team members. If you care about them, they’ll care about your business, which can’t help but positively impact customer interactions. Give them permission to be themselves, and impress upon them the importance of personal connections with customers.
In addition, neuroscience (and human nature) tells us that people are wired to connect on a social level, so it stands to reason that your employees (and your customers, at that) want to be friendly. They want to be a part of a community. A little push from the top can only help foster this connection between team members and customers.
Building community into your franchise will help you see more business. You’ll also see more customer referrals and better customer retention numbers, allowing your shop to set up stronger roots in the area.
In sum, just because you’re not making cappuccinos or running a gym doesn’t mean that aspiring to make yours a community-based business is out of reach. All franchises have the makings for a community. The real challenge is finding the hook and then putting the people in place to make it all possible.