Evaluate the Marketing System Before Investing in a Franchise – Does it Deliver the Right Customers?

Most individuals who buy franchises do so with the expectation that the franchise company will do a better job of marketing the business than the individual could do on his or her own. Marketing acumen, expertise, implementation and buying power are among the major motivators for franchise buyers. Most people admit that they’re not very good at marketing, and they can’t afford to do it on their own. Therefore they look to franchise companies, particularly to franchisors, to handle that aspect of business development for them.

Franchisees frequently complain about inadequate marketing

And yet, marketing failure is one of the major reasons for dissatisfaction among franchisees.

Here are several reasons why:

  • Just because it’s a franchise doesn’t mean it’s a good business, or that you should buy it.
  • Just because it’s a franchise doesn’t mean the franchisor has perfected the marketing program.
  • Just because it’s a name brand doesn’t mean that the marketing is effective all of the time, in all markets.
  • Just because it’s a franchise, doesn’t mean that the marketing generates the “right” customers for your business.

How good is the marketing system?

Before you buy a franchise, look at the effectiveness of the marketing system. Put aside name brand identity, type of business, geographic location, and many of the other issues that you evaluate before you buy a franchise, and dig into the value of the marketing overall.

 Ask these questions:

  • Does it work? How do you know?
  • Is it cost effective? 
  • How much will it cost you each month to implement the marketing system?
  • What does it cost to generate one customer for the business?
  • How many customers will the marketing generate daily, weekly, quarterly?
  • How much money will each customer spend in your business?
  • How often does a customer return to the business to spend more money?
  • How many years does a customer remain a customer of the business?
  • How often is the marketing program updated by the franchisor?
  • As a franchisee, what will be your ongoing marketing costs?

Ask the franchisees, but even then be cautious!

Don’t just accept the franchisor’s answers to these questions. Ask the franchisees! 

Unfortunately, sometimes even the franchisees won’t be able to help you assess the marketing system. They think it’s doing the job, and it’s not.

Not all customers are created equal

For example, a famous name brand franchise system asked me to help them evaluate their marketing system, only to discover that while it generated customers for the franchisees, the customers were the “wrong” customers! They spent too little money, they made too many unreasonable demands, and they drove the franchisees into a frenzy. No marketing would have been better than that kind of marketing! Ultimately, many franchisees in this network lost money and some went out of business because the marketing system was targeted to attract the “wrong” customers.

There are “wrong” customers and there are “right” customers and every business will attract some of both. However, you want to be sure your franchise marketing system delivers more “right” customers than “wrong” customers.

How do you recognize a “right” customer?

What’s a “right” customer? Here are several characteristics:

  • They spend the most money in the least time
  • They frequently return and buy more
  • They follow your system and are not disruptive
  • They promote your business

Here’s why many franchisees are disgruntled

If you evaluate the marketing system using the above criteria, your challenge is more difficult. Frequently, and unfortunately, neither franchisor nor franchisees realize that their marketing systems are attracting the “wrong” customers. Which explains why so many franchisees are disgruntled.

Unless you know that you can do a better job of marketing than can the franchisor (and the franchisor will give you that leeway), you must carefully evaluate the marketing system before you invest in a franchise.


Affiliate Marketing – Online Affiliate Marketing Part 7 – Your Product & Competition

Your Product & Competition, knowing these metrics will help in determining the profitability of product in the market place.

  • Does your product have longevity in the market?

Internet consumers are more discerning when it comes to products they come by in the worldwide web. One factor that may influence their choices is the long term viability of your product. Your product may be obsolete in a year’s time. And your market does not want that.

When the term “programmed obsolescence” (where many electronic products were found to be specifically designed to be replaced by newer products after a short while in the market) came about, many consumers were disenchanted with their gadgets and started buying less and less, with the idea that a new product will be out in a few months and it would be better to wait it out. Assure your niche market that your product will last a long time, and prove it, and they will consider you and your product worth their while and money.

  • Competition Analysis – An In-depth Discussion

In focusing on a specific niche market, aside from getting to know your market, you also have to know about the presence of competition and how they fare in your shared market. How these competing companies and products perform is a likely model of how your own company will fare in your chosen niche market. Here are some guidelines to determine the profitability of your niche market by studying your competition (or lack of it).

  • Research about the Presence of Competitors in your Market

Are there any other companies in your niche market that may be considered competition? How many of them are there? The lack of competition may sometimes mean that your target market may not be profitable in the long run. That may be the reason why there are no companies targeting that particular niche. The market, perhaps due to its low population, is simply not enough to sustain the existence of the companies’ products.

On the other hand, a huge number of competitors in a given niche may also mean that the market is already saturated, and it would be best for you to look for other, less competitor-dense markets to focus on.

  • Gather information about your competitor

Once you have determined that there is indeed competition in your niche market, although not enough to force you out of the playing field, know more about them. Compare your services and prices with theirs. What may be your key advantage against your competition? Are you priced lower than them? Are your products superior than theirs? What makes your competition stay where they are and not look for other markets? All these facts and information come in handy when analyzing the profitability of your niche.

  • Know How Profitable it is for your Competitor in your Niche

Analyze your competition’s popularity over the internet by using widely-available programs and software. These software measure the volume of internet traffic that pass through your competitor’s site. The higher the traffic, the more profitable it seems to be for your competition. It would also be smart to measure the probability of your competition appearing on top of search engine results whenever a keyword related to your product is in-putted. That way, you can measure the chances your product will be chosen over his.