Why Marketing Your Franchise Matters Strategies to gather competitive intelligence and determine your marketing budget.
The following excerpt is from franchise expert Mark Siebert's book The Multiplier Model. Buy it now.
Mastering marketing requires an in-depth knowledge of the statistics that measure success—and a thorough understanding of consumer behavior in relation to those statistics.
While it may sound strange, your marketing systems will require you to look both forward and backwards.
With the following steps, you'll be able to gather competitive intelligence and determine your marketing budget.
Marketing is a moving target
If the number of competitors in your market is growing, the only way to maintain your level of growth—let alone grow your business—is to find ways to expand the market as a whole.
If the market is not growing, you'll find that these competitors—good or bad—will keep taking little bites out of your business until you are left with nothing but the core.
Embrace your story and tell it memorably
A big part of success is a customer picking your company because of your story. If you're looking to duplicate your business, you need to have a compelling story to tell—and you need to tell it in a memorable way.
One way successful brands tell their story is through their brand slogan. Let's look at one of our nation's most iconic brands—Dunkin' Donuts—which has recently been rebranded Dunkin'. The goal is to convey that consumers should choose you because in some way you are the best option. Taco Bell has succeeded at that with its "Think Outside the Bun" campaign.
Pick a lane
For many entrepreneurs, limiting their company's positioning feels counterintuitive and painful. Why not try to do it all—and have your marketing say as much?
Here's the quick answer: Because no company can be all things to all people—and those that try to do it all end up doing, at best, a mediocre job.
Once you have determined how you want to position yourself, you need to align your entire business around that position: your employees, operations, marketing, purchasing, merchandising and customer interaction.
A systematic approach to competitive intelligence
One of the greatest things about the internet—and one of its most underused aspects—is its value in conducting competitive research.
- The first step is identifying your competitors. This is generally as simple as conducting keyword searches on the products or services you provide in the markets you serve.
- Next, decide which factors you want to track from the standpoint of competitive intelligence. This could be pricing strategies, product or service offerings, guarantees, promotions, customer reviews, number of locations and any general news about the company or its owners.
- Review your competitor's website and social media pages.
- Research review sites like Yelp or Google Reviews.
- Use a subscription service to continuously track your competitors.
Knowing your customer
It's important to know who you are selling to, so you can determine how to target them appropriately. Developing and refining buyer profiles—also known as buyer personas—is a systematic way to help clearly identify your target customers and then guide how you effectively communicate with them.
Developing buyer personas is never a set-it-and-forget-it exercise. Profiles may initially be based on who you think your ideal customers might be, but they can and should be refined over time as you identify common characteristics of your most loyal customers. Along those same lines, there's no reason to limit yourself to just one customer profile or buyer persona.
Targeting your customer
Developing a system for generating sales leads in the most cost-effective manner means you must understand exactly who your customers are. Knowing the age, sex, political leanings and other demographic information of your customers is essential to knowing how you should communicate with them.
In addition to conveying the facts about your products or solutions (such as features, pricing and other details), try to create an emotional connection, so your audience feels good about buying from you. The emotional response consumers have to your product or service often plays a critical part in their buying decision.
Developing an appropriate marketing budget
One way to determine your advertising budget is to base it on a percentage of revenue (projected or historical). According to a 2019 article in the Houston Chronicle, "The U.S. Small Business Administration recommends spending 7 to 8 percent of your gross revenue for marketing and advertising if you're doing less than $5 million a year in sales and your net profit margin—after all expenses—is in the 10 percent to 12 percent range."
Examine your specific goals, such as how many sales you need to make, how many customers you are aiming to acquire or whatever the most appropriate metric would be for your business to reach your financial goals (profitability, growth, maintenance, etc.). Then you can make the most of your marketing budget and leverage as much as possible of free or low-cost marketing resources.
Measurement and refinement
The first rule of evaluating the effectiveness of any business is to track and measure everything—from labor costs and cost of goods to marketing expenditures and results. This is especially important when evaluating the efficacy of your marketing efforts.
In marketing, the rule should be "Measure twice. Then measure again." But when it comes to measuring things, and then the subsequent refining and adjusting based on observed results, don't just focus on what the numbers say about your own performance. You need to also leverage competitor benchmarks to ensure you are in line with what other companies are doing, spending and measuring.
Get started with The Multiplier Model
Going from small business to successful startup to scalable growth takes more than just good luck. It takes a system. Over the last 34 years, franchising consultant and growth expert Mark Siebert has been sought out by more than 70,000 executives looking to expand their companies. Out of those 70,000, only 5,000 had the right systems in place to go from successful to scalable. In The Multiplier Model, Siebert discusses the factors that determine if an entrepreneur is ready to scale their venture — and the best ways to get started. Read more.