Your franchise already gathers plenty of data, but are you using it to its fullest potential? Learn how to optimize internal company data using the tools you already have so you can pave the way to expansion.
Creating a clear snapshot of who your customers are lets you know exactly what they want and how to give it to them, paving the way to you becoming their absolute-most-favorite company ever.
With positive brand power like that behind franchisors, it’s no wonder that selling stores becomes easy. But a boom in franchise sales doesn’t just happen overnight.
So, where do you begin to create that elusive customer snapshot that will set on you the path to expansion?
Gathering internal company data is your first step. Luckily, you’re already gathering data all day, whether you mean to or not. The question of whether you’re using it to its fullest potential is one only you can answer.
What is Internal Data?
Internal company data is information your business generates every day, and it comes from four main sources:
- Human Resources
Sales numbers provide information about profits and revenue. They directly correlate to the areas your business is performing best in and which products are most (and least) appealing to customers.
Marketing data is information about your customers and their preferences. It also encompasses the results you gather from carrying out promotions and campaigns. It is used to determine brand strategies and plans for developing future products or services.
Financial data includes your balance sheet and Profit & Loss statements. Company stakeholders rely on these to evaluate profitability and assess level of risk.
Human Resource data covers salary information, turnover rates, training time, absenteeism and performance reviews; all critical information for managing personnel.
For the purposes of this article, we’ll focus primarily on sales and marketing data, because that’s where our franchise customers use our platform most to achieve the greatest benefits.
What are some examples of internal data you already have but could be using more strategically to gain competitive advantage?
What happens at the cash register could potentially illuminate insights you may not even be aware of. Sure, POS transactions tell you what people are buying, how much, when they’re purchasing, and how much they spend. But do you really know who those customers are?
If not, an easy way to get started is to track ZIP codes. If you’re not requesting that customers punch in their ZIP codes when swiping a credit card, you’re missing out on a great opportunity.
ZIP codes uncover the blind spots in your marketing. Those five little numbers tell you, generally, where your customers live and how far they’re willing to travel to reach you. That’s important because “People who live in the same area often have comparable incomes, family types (for example, children or no children), rent or own their home, and share similar behavior patterns,” says Prakash Bhoj on Digitalist.com.
You can begin to see a rudimentary image of your customers coming into view now, letting you make general assumptions about the kinds of people you serve.
However, BlastPoint CEO and Co-founder, Alison Alvarez, warns us in her book, Better Franchise Growth for Everyone, that “correlation does not equal causation” (25). In other words, be careful about the assumptions you make, and avoid drawing unfair or discriminatory conclusions.
Instead, Alvarez continues, “Using ZIP Codes as a stand-in for customers can provide a snapshot of what makes a location successful and provide additional criteria when exploring new locations and building new territories. Understanding the factors that make the best locations will separate A territories from the B and C graded opportunities. Your franchisees will have more information about what they are buying into and will feel more confident about their chosen franchise territory.”
How to optimize this data? First, record any ZIP codes you gather into a spreadsheet. Pinpoint them on a map to create a visual cluster of where your customers are coming from.
Alvarez calls this “Money Mapping”, and it can be incredibly eye-opening for business owners (24).
Take daily sales transactions and compare them against ZIP code data. Plotting sales and customer-visit data over a certain period of time clarifies whether there is a cyclical nature to your business.
Further, a comparison breaks down whether people from one area versus another are spending their dollars differently, which can reveal whether a promotion or campaign is working better in one region than it is in another. It may even suggest why, and it gives you an idea of where and how to target advertising for next time.
Zoom out farther and compare the different Money Maps you’ve created for your various store locations. This will help you, as Alvarez notes, “understand what makes particular locations stronger and more lucrative” (24).
Learn how our customers are using BlastPoint to grow and increase revenue.
Surveys are easy, affordable ways to gather information and create positive engagement. Customer feedback clarifies how well (or not) people enjoyed a product or service, and that can help you develop new and improved ones.
Surveys tell you who’s most likely to recommend your business to others. They provide insights into what your customers want next and even how much they’d be willing to spend.
Positive comments can be turned into glowing website testimonials that would-be franchisees can peruse and be wowed by. Negative comments can reveal areas of your business (or even specific employees) that need improvement.
Optimize customer surveys by collecting demographic information such as birth dates, and you’ll earn yourself a double win. Plotting birth dates into that ZIP code spreadsheet or Money Map you started above will show you a customer snapshot that’s even more clear now.
Determine who your best customers are with a trackable rewards system. Earning a free coffee after buying 10, or getting discounts when you join as a member can inspire and motivate loyalty.
Once repeat customers are identified, further reward them for referring a friend, writing a positive review, or testing out a new product. In the process, be sure and gather as much demographic and geographic information as they are comfortable sharing.
To optimize loyalty programs, you’ll use loyal customer data to create “lookalike” customers, or others just like them, so you’ll know who to target ads to next.
How will internal data help me sell more franchises?
Using data to understand who your customers are means you’re better equipped to meet their needs and desires more precisely. Data also lets you know where to find more folks just like them to convert into new customers. More customers means your business is growing, which is good news if you’re interested in selling more stores.
ZIP code and territory comparisons over time give you the insights you need to determine where you’re most likely to find success next. Recording feedback you’ve been given from customer surveys helps you to implement meaningful responses to meet their requests. Keeping track of your most loyal customers and using their buying habits as baseline behavior lets you anticipate how to better serve them next–and to appeal to others who will become new loyal customers. And new customers, coupled with better-targeted service, means you’ve got stronger opportunities for growth.
When you can share all of this recorded, provable data with prospective franchisees, they feel confident in your brand, grow comfortable envisioning themselves as part of it, and become more prepared to sign on the dotted line. Without data-backed insights to provide this level of trust and transparency, the likelihood of them buying your franchise is limited.
BlastPoint’s interactive platform greatly enhances all of these data tools. We use additional, external resources to create more precise customer profiles for more detailed targeting and site selection. But any business owner can start gathering and optimizing data right now, using the resources they already have.
Keep an eye out in the near future for a newly updated edition of Better Franchise Growth For Everyone, A BlastPoint Book, by CEO, Co-Founder, and author, Alison Alvarez, with fresh insights and additional chapters included!