By Shawn Saraga
These days, customer service is the number one reason a business succeeds or fails; franchises are no exception. In the 1980s, McDonald’s, one of the biggest players in the franchise market, made customer service and culture a priority by centring its advertising around ‘free smiles,’ a simple idea that made a big impact. With online shopping gaining a foothold, successful franchises can set themselves apart by exceeding customer service expectations. In fact, you could say this is the foundation upon which bricks-and-mortar retail environments are built.
No matter what type of franchised business you choose to operate, customer service will always come into play. The following five questions can help you determine if a franchisor can give you the tools to succeed in this competitive customer service-based environment.
1. How do you emphasize customer service?
A franchisor should have very clear customer service policies in place, with training programs designed around the customers’ experience. A good franchisor will work with its franchisees to focus on satisfying the customer and increasing repeat visits. The more a customer frequents your franchise, the greater the likelihood of them spending more money. Increasing repeat customer visits is one of the easiest ways to boost sales. Ask prospective franchisors what policies or procedures they have in place to encourage repeat business and keep customer service top of mind.
2. What does the company culture have to do with customer service?
Company culture comprises the little things that happen every day to help create a better customer service experience. This can involve team meetings, outings or events—anything that helps make the franchise system a more cohesive group that works better to provide exceptional customer service. Successful franchisors organize events like these throughout the year, both for franchisees and their employees. These events are great team-building experiences, which foster positivity and good service among employees. These gatherings often make the difference between a good franchise system and a great one.
3. How will I be trained on customer service?
Customer service should be a large component of the training program of any strong franchise system. Many first-time franchisees don’t come to their new business with a great deal of experience dealing with the public. However, every front-line employee in a franchise system, up to and including the franchisee, is responsible for the customer service experience. As such, constant training updates should be forthcoming from your franchisor.
The easiest way to ensure this happens is asking the franchisor what type of ongoing training is provided when new promotions are introduced. When a franchisor offers a new special, it is an opportunity to place greater emphasis on customer service. The company can also provide additional training to assist with the promotion. If the franchisor has a strong emphasis on customer service, it will embrace the opportunity to provide additional training to you and your front-line staff as often as possible. This commitment and attention to detail is a hallmark of a successful franchise system.
4. If I have a customer service issue that is beyond my scope, how do I deal with it?
All business owners occasionally face customer service issues that are beyond the scope of what they are able to handle. Having a franchisor to provide the necessary support can make dealing with those issues easier; in fact, that support is part of the appeal of the franchise model. Ask your franchisor about its ‘escalation policy’ on customer service issues that can’t be handled at the store level. Every franchisor should have a plan in place to deal with these types of issues. The focus should always be on turning a brand detractor into a brand ambassador; that is, to turn a customer’s negative experience into a positive one. When your franchisor provides you with feedback and examples of these past issues, make sure you agree with its tactics. Ask yourself if this approach would help change your impression of the brand if you were the upset customer.
5. What impact does customer service have on the bottom line?
A good franchisor should realize and emphasize to franchisees that customer service has a huge impact on the bottom line. A simple equation to demonstrate this is called the cost of client acquisition. Ask the franchisor if it has taken the time to evaluate the actual cost of attracting a new customer. Then ask what the value each customer has over his or her average lifetime. For example, if it costs $2,000 to attract a new customer and they are worth $15,000 per year in revenue, then you know every customer lost represents $13,000 of lost revenue. It will also require $2,000 in additional expenses to replace that customer. Keeping these types of numbers in mind will help you and your franchisor focus on customer service, its true costs and the importance of retaining existing customers.
Shawn Saraga is the Founder and President of the Franchise Academy. To learn more or book a meeting time please visit www.shawnsaraga.com