7 minute read
Tony Meredith
Sales Growth Strategies for Franchisees
Sales is the lifeblood of any franchise, yet so many franchisees don’t know how to properly market and sell the products or services that they offer. They either lack the sales strategy, plan, or skills.
In my experience, the majority of franchisees only rely on leads from their franchisor. Whilst these leads are great, the best way to grow a large franchise is to combine leads with proactive local area marketing and sales. I've spent over 25 years working for some of the world's largest organisations in a number of senior sales roles, and have sold a diverse range of products, including desserts, dog food, pharmaceuticals, and franchises. During this time, I've identified and actioned what it takes to consistently grow sales. At the highest level, there are only four strategies that can grow sales in your franchise:
1. Basket Size: Increasing the number of products purchased in each basket, cart, or shop. 2. Price: Increasing the average sales price (ASP). 3. Frequency: Increasing the number of times a customer buys a product or service. 4. New Customers: Growing the number of new customers that transact with your franchise.
Let me break these four sales growth strategies into more detail. It is worth noting that the following suggestions are not exhaustive, rather a guide of some activities that you can introduce in your franchise to grow sales.
The best and most cost-effective sales growth strategy is to 'increase the basket size'. This means increasing the number of products that a shopper purchases in a single transaction. The word basket means shopping basket, cart, or transaction.
Generally, the shopper already knows about your franchise and buys what you sell, therefore it’s about selling more to them in any given transaction, so they leave with multiple items, not just one. This is an extremely cost-effective method to grow your franchise, as there is no new customer acquisition cost.
Below are some strategies to increase basket size:
a) Suggestive Selling (or Ask). McDonald’s used to be renowned for the phrase,
“Would you like fries with that?”
Supermarkets and Service Stations have positioned incremental items near the counter or registers, ie. confectionery, snacks, cold drinks, gift cards. Online you can offer complimentary products around the product already placed in the cart, ie. dessert with pizza, shaker bottle with protein powder, scarf with jumper. b) Product Range. By having the right products to sell, you increase the likelihood of more sales. Constantly review your range to ensure that you are maximising the sales of the stock that you have. c) Effective Merchandising. Whether you’re online or offline, place complimentary products near each other. In a café, rotate cakes in the premium cabinet position, ie. muffins in the morning to accompany coffee. In a pharmacy over Winter, focus on products for cold and flu, such as tissues, chest vapour rub, cold and flu tablets, sore throat gargle, and pain relief.
These could be merchandised together in store, positioned near the counter, or positioned together online or in a catalogue.
increase average sales price
This strategy refers to increasing the average sales price (ASP) of your products or services sold. If a new or existing shopper is only going to buy one item from your franchise, you want them to buy the more expensive option.
tony Meredith, Director and Head Coach at Tony Meredith Coaching, has over 25 years’ experience working for some of the world’s largest corporations in a variety of senior sales and leadership roles. Tony Meredith Coaching started in 2018 and works with hundreds of small-medium businesses across Australia, in the areas of Franchising, Retail, Services, Manufacturing, and Property. Tony Meredith Coaching focuses on helping business owners Grow Sales, Increase Profits, and Regain Time. info@tonymeredithcoaching.com.au https://tonymeredithcoaching.com.au/ https://www.linkedin.com/in/tony-meredith-coach/ https://www.youtube.com/channel/ucMf8_Pya5vWuttrmdbmaiwQ
Below are some examples of how you could increase price:
a) Product Range. Ensure that you offer at least two choices, potentially three.
This means creating a Good/Best offer, or a Good/Better/Best offer. A cheaper, low quality product, alongside a more expensive, higher quality product. By providing choice you now have an opportunity to up-trade your customers to the higher priced item. b) Promotions. Develop promotions on your premium (best) products, that aren’t necessarily price related. For example: free gifts or training with the purchase of your 'Best' product. The opportunity is to create more value around the higher priced item. c) Price rise. This is the simplest way to increase the ASP, although just because you can doesn’t always mean that you should.
If you take your price up too sharply this could have an adverse effect on units sold.
Sometimes the only choice is to take your prices up because your costs have increased, and if you don’t, it’ll be your profit margin that gets squeezed.
increase frequency
Customers are already buying from your franchise at particular intervals, therefore this sales growth strategy focuses on increasing their frequency of purchasing from you. There are a variety of effective strategies designed to increase purchase frequency. a) Customer Service. This tried and tested method is often forgotten. Always strive to give your customers an awesome experience. Wow them! This can be done via the positivity and friendliness of you and your staff. Other positive customer service ideas for both channels are:
• Ensure the products are available
• Deliver on time
• Follow through with your commitments
• Offer amazing value that give your shoppers a reason to return. Link promotions to themes or seasons, ie. Mother’s Day, Halloween, Christmas, Winter.
c) Loyalty Program. Offer your shoppers an incentive to keep returning. For example:
Buy 5 coffees, get the 6th for free, or introduce a loyalty rewards program
new customers
Acquiring new customers is the hardest and most expensive strategy to grow sales. Essentially, you’re wanting to create attention with someone who may not have heard of you or your franchise, and then convert this cold lead into a paying customer. With this being the case, it’s also an integral part of growth in your franchise.
Below are a few ideas to help you acquire new customers:
a) Awareness. Awareness is another term for marketing. There are so many ways that you can create awareness for you and your franchise locally, ie. Flyer drops, sponsorships, Google My Business, social media, publicity, and/or other paid advertising. b) Reduce Risk. Given someone has never purchased from your business previously, is there an opportunity to introduce an element to reduce their risk and/or put their mind at ease? For ex. returns policy, money back guarantee, results within a time period or it’s free. c) Referrals. Encourage your clients, friends, and family to refer you to those they know.
The other fantastic referral strategy is to network. Strive to constantly meet new people, and build a know, like, and trust relationship with them.
summary
It goes without saying that sales are essential for the future success of your franchise. Take the time to establish your sales goal, determine which sales growth strategies apply to your franchise, implement these strategies consistently, and I know you’ll create a thriving franchise. v
