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The Key to Franchise Success? Target a Narrow Customer Base

Written by: Sebastien Page

Article Overview: If you’re thinking that purchasing a franchise concept that appeals to as many people as possible equals success, think again: targeting a narrower customer base may be a better way to go.

The Key to Franchise Success? Target a Narrow Customer Base

If you’re thinking that purchasing a franchise concept that appeals to as many people as possible equals success, think again: targeting a narrower customer base may be a better way to go.

As a new franchisee, you want to distinguish yourself – I mean, let’s face it: you’ll have lots of competition to deal with, and you want to secure all the advantages you can. There are two primary advantages to selling a specific product to a particular subsection of the public:

1) Less competition: Market specificity = less financial risk for investors and banks/lenders = higher chance of securing necessary funds. The ability to prove that there is a demand for your product/service makes obtaining funds that much easier.

2) Sufficient time and money for marketing: Attempting to grab the attention of the general public can be quite time-consuming, not to mention expensive. With a single, specific group of customers as a target audience, you’ll undoubtedly spend less and save more in achieving your goal.

Before you make any major financial decisions, however, make sure to do your due diligence. Does a specific need for your product exist? Interview members of the population you wish to target and monitor potential competition. You don’t want your competition to be overwhelming, but you also would like a few of your competitors to be up and running, just to prove that there is, in fact, a market for your product or service.

Also, be sure to investigate your competition’s annual earnings – how have their earnings changed from year to year? Hopefully, they’re well-established (that is, they’ve experienced a steady climb in earnings) – then they won’t view your presence as a threat, or may even see your presence as a positive force that might create additional demand.

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Article Tags: banks, competition market, customer base, due diligence, earnings, financial decisions, financial risk, franchise concept, franchisee, interview members, lenders, necessary funds, population, presence, specific group, specificity, steady climb, subsection, target audience, time and money



Related Forum Posts
Re: Enticing Franchises - Top 9 List - All Franchise listed above are in millions of dollars. Do you have the list of Franchise in thousands
Re: Info for would be franchisers... - [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there. To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1] Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published. I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
how much for a franchise fee? - Dear Colleague There is no easy answer to this question. Things to consider: [list=] The sizeof the Franchise Clent base Expected Turnover Intellectual Property costs (recoup) Number of Franchises Number of employees Original Set up costs Franchise admin costs An example: A franchise that I was involved in setting was to a simple "lawn mowing/home repair" franchise. The Franchise included national/local advertising - preparation of client lists - general admin - central accounting etc The Franchise involved 300-500 clients - and an annual turnover of about $300,000 . The annual franchise fee was $30,000. Hope that this gives you some idea Take care Ian[/list]
Re: Two Useful Books To Help You Focus On The CLIENT - Hi David, To add to your thread, I'd like to recommend Jonathan Tisch's "Chocolates On The Pillow Aren't Enough: Reinventing The Customer Experience". Tisch's book includes content on "Welcoming Customers", "The New Art of Customization", "The Challenges of Customer Diversity" and "Offering Something Extra to Your Customers" to name a few.
Re: How should i promote a new website? - ignore this message IF it's already been stated. I haven't had a chance to read all the replies and i have to jet from the office... I suggest marketing where ever your Target Market congregates. If it's a forum of concerned parents - go there. Strike up a deal with the forum owner (JV) and have him promote it to the list of members (Integration Marketing). If you want to go with Forums then i would partner with a parent who is a frequent poster/moderator on a particular Target Market Forum and have him/her add your link to their signature. That was just a thought but it's not as intense once you get buy in from the Forum owner or high ranked poster/moderator. Hope that sparks some new ideas.


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