Five Strategies To Build Customer Loyalty In Your Franchise

One of the biggest benefits of being a franchisee is that you can leverage the recognition and awareness of an established brand. Brand awareness is a huge driver of customer referrals, which is a critical element of your overall growth.

What’s the best way to generate more of those referrals? Focus on customer loyalty.

The most effective and efficient way to grow your bottom line, based on my experience, is to retain the customers you already have. Keeping current customers and generating referrals from them will likely always be less costly than new customer acquisition.

Here are my top five strategies for increasing customer loyalty in a franchise business.

1. Share your expertise in a way that provides added value for the customer.

Ask your franchise customers what they want to learn more about, and then put together a content marketing plan to address their needs. Your expertise and value can be effectively communicated to your customers through social media channels, a blog on your website or in your email marketing.

For example, for our personal training brand, we want to position trainers to be seen as experts and focus on providing value that goes beyond the studio — whether it’s sharing tips on how to eat healthy while on vacation or explaining the truth behind the latest fad diet.

By adding more perceived value than your competitors, your business will stand out, and it can increase word-of-mouth referrals from happy customers.

2. Create personalized experiences.

According to a recent report by Segment consumers’ expectations for personalization are often greater than their actual experiences with the brand. The report states that “On average, 71% express some level of frustration when their experience is impersonal.”

If you are in the franchise massage therapy business, for example, you can create personalization by hiring well-trained massage therapists who assess a client’s massage requirements and then capturing those needs systematically after the client leaves and focusing on them during their next visit. This allows clients to receive highly personalized, cohesive experiences and strengthens their relationship with your brand at every visit.

When you create personalized experiences for your customers, they know they can expect consistency from your brand, which can connect with people on an emotional level and lead to more brand trust, loyalty and referrals.

3. Provide something in return.

Many customers enjoy having special access and benefits in exchange for their loyalty. Take American Express, for example. The company’s emphasis on bonuses and privileges in exchange for membership became a powerful strategy once it properly aligned the program’s strategy and implementation.

The key here is to get a clear understanding of who your best customers are and what perks you can extend to them that will improve recency, frequency and monetary spend. One thing to note, however, is that these benefits are often hard to change once made available, so it’s best to follow the advice of our woodworking teachers: “Measure twice, cut once.”

Creating personalized experiences and special access in your franchise customer loyalty strategy requires a fairly robust centralized data platform to capture and analyze a 360-degree view of your customers. This is an incredibly important piece of your marketing foundation, so it’s best to take your time and ensure it’s done right. If you’re unsure of what to do, leverage your corporate team and franchisee support, and they will likely be able to help you develop a road map for the technology that’s required.

4. Make the customer experience easier and more efficient. 

Many of today’s consumers value time more than money. Everyone is looking for ways to make their shopping experience easier and more efficient, whether it’s using tech-enabled tools like an artificial intelligence-powered chat service for booking your next service or location-based technology that automatically checks you into your workout class when you walk through the door.

Customers may have as many as 10-15 touch points with your brand on a single transaction, and it’s not realistic or optimal to try to save time on every touch point. Understanding which touch points your most profitable customers value the most, and focusing on delighting and saving them time with these, will help make a more memorable impact on their experience.

5. Know your data.

For franchisees and other small business owners, the biggest challenge is ensuring you are collecting and electronically capturing relevant and accurate data. The most valuable metrics for a franchise owner are those that provide a clear summary of customer feedback, can be consistently measured across time periods and provide clear direction on action items that can be implemented to improve future performance.

Before putting any data strategies or technology in place, it’s critical to educate your staff on what you are doing with each point of collected data and why it is important to have accurate information. A good rule of thumb is, if you don’t have a plan for what you’ll do with the data you collect, don’t spend the time and money to collect it. When it comes to data, it’s important to stay abreast of any developments in data privacy, especially at the state and local levels, and be diligent in capturing the best data sources possible from the get-go, as that will save you money down the road.

Overall, based on my experience, retaining one loyal customer is usually worth more than earning two new customers to replace them. At a basic level, your retention strategy starts with treating every customer with respect and integrity in every interaction and proactively creating an enjoyable, safe environment for your clients.

If you start with securing the trust and loyalty of your customers, followed by implementing more sophisticated strategies rooted in clear data points, the retention results will impact your bottom line in a big way.