Customer relationship management – Supporting franchises

The franchise sector in Australia has boomed over the past eight years, and with growth come challenges. With well over 850 franchise chains throughout Australia there is intense competition for qualified franchisees, as well as some challenges that all industries will be facing over the course of 2009. These include a rise in occupancy costs and rising petrol prices.   

It is critical in these competitive times for franchisors to provide the best possible systems and support for existing and potential franchisees. One avenue that many franchisors are exploring is Customer Relationship Management (CRM) software. Traditionally used to keep track of and enhance customer relationships, there are four key areas where the same technology can be applied to franchising:  

• Franchisee recruitment
• Contract management - both with franchisees and suppliers
• Marketing
• Customer service and satisfaction
• Franchisee recruitment  

Often, people who want to establish a small business look towards franchising as a way to set up a successful and profitable operation. It is important however, that franchisors target the right people that fit their system; franchising is not a one size fits all business. The right CRM system can help franchisors manage the sales pipeline, from targeted marketing to suitable potential franchisees and keep track of opportunities for new franchisees, from determining suitability through to making an offer.

Contract management 
Keeping track of all the legal elements of running a franchise system can be challenging. There are contracts with franchisees and suppliers, lease agreements, and no end of correspondence that needs to be tracked.     

A CRM system can provide a central repository to store all documents and selectively share them, which will enhance visibility across this information. For example, if you can see centrally that ten lease agreements are up for renewal in the same year with a particular shopping centre chain, you are in a better negotiation position than if these leases were being discussed on a case by case basis.  

Marketing
As well as marketing to potential franchisees, a CRM system can help with the management of your marketing programs to potential customers. A common complaint from franchisees is that they provide a percentage of revenue back to the franchisor for marketing programs, but see no value from that.  

Using a CRM system, you can segment your target market and record the marketing activities undertaken. The results of the campaign can then be measured by region and by outlet. The CRM system can record how many responses were received, how many sales opportunities were generated and identify the overall value of those opportunities. This information can be provided to franchisees in a report comparing their marketing spend to results achieved.  

Customer service and satisfaction 
It's a sad fact of life that you can't keep everybody happy all of the time. If an unhappy customer has a bad experience at one of your franchise outlets, the complaint will often come to the head office. Using a CRM system, franchisors can log the complaint and track it through to final resolution.     

A CRM system can also help franchisors track whether a complaint is a one-off anomaly or indicative of a bigger problem with a particular franchise outlet. Where a broader problem is recognised, it may be appropriate to organise training sessions for that outlet, or if it remains a problem, terminate the franchisees contract. Franchisors can also keep track of positive comments and recognise the leading franchisees.    

CRM: Saving money and making money
A CRM system, used well, can help to simplify and minimise a lot of the administrative processes involved in managing a franchising organisation. It can also help create more targeted and effective marketing programs to grow both the number of franchises and the customers that frequent them.     

It's true that there can be challenges and pitfalls around implementing new technology systems. Franchisees may object to funding a new system if they don't feel they will reap the benefits. But by having a clear understanding of what you want to achieve from your system and how you will manage the implementation, many of these problems can be avoided. A well used CRM system may prove to be one of the best investments your business has ever made. 

About Professional Advantage 
Professional Advantage was established in 1989 and today employs around 200 people in Sydney, Melbourne, Brisbane, London and Fargo, USA. The company is the largest provider of international business systems to midsize organisations in Australia, supporting over 600 clients nationally. Professional Advantage supplies financial management, ERP, CRM, retail and business intelligence solutions to a broad range of industries. Their multi product offering is complemented by its development, systems integration, consulting, training, and support services.

The company's clients include medium to large public and private companies and government departments. BRW magazine has regularly listed Professional Advantage as one of Australia’s fastest growing private companies between 1996 and 2000. The 2002 “AFR Boss Consulting" survey conducted by Fairfax Business Research rated Professional Advantage the highest in user satisfaction as well as the best value.