Franchising has been shaken up by the arrival of international concepts. Here’s how it can be a good thing for your business.
Starbucks or Vida e Caffé? Burger King or Steers? Pizza Hut or Debonairs? Unlike five years ago, consumers have more options – and you want to ensure you’re always there first. But, how does the introduction of global franchise concepts affect the local landscape, and is competition really as healthy as you think when it comes to these big brands? The short answer is yes.
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“Competition drives us to be the best we can be. It takes us out of our comfort zone and forces us to create better products and services,” says Jason Saltzman, CEO of Alley. “If you don’t try to make things better, you are not innovating.” Customers are drawn to innovation and – in the words of Woolworths – they appreciate ‘the difference’.
Here’s why competition can benefit your franchise operation:
1. Learn lessons from your competition
What makes your competitors different from your business? Study their strengths, weaknesses, customer relations and products. You can do all this without leaving your desk:
- Check out their website and their social media pages.
- Search their company name to read customer reviews and blog articles about their service.
- Without bashing your rivals, try making a list of five ways your product or service is better than theirs, then make another list of five ways they are better than you to help set goals for your business and its employees.
2. Encourages improved service
According to Franchise Chatter, one of the best ways to please your customers is through good, old-fashioned personal service. “By hiring friendly employees and instilling in them that your customers are your top priority, you will convey to your customers that you value their business,” the report says.
An active social media presence to keep in touch with what your customers are saying about your business is also important: “Keep your Facebook and Twitter accounts updated and relevant with fresh content and photos. You may want to consider having a spot for customer feedback on your pages,” the article adds.
Once you know where you need to improve, that’s when you gain a competitive advantage, because not only do you know where you’re not measuring up to your customer expectations, but also to your competitors. Especially if you’re offering something they aren’t.
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3. Raises the bar for value
“Cash-strapped South Africans will not dig deeper into their pockets unless they believe that the quality justifies the price,” says Adré Schreuder, CEO of Consulta. This means you need to be top of the list of preferred fast food outlets. It’s easy to assume consumers will keep returning for the same special recipe or signature cooking technique, but as the 2016 SAcsi for Fast Food Restaurants Index survey has proved, value and service are paramount to patrons, so those should be for you too.
Take Steers’ Wacky Wednesday promotion, or Spur’s two-for-one burger Mondays. Burger King might seem trendier and appear more exciting, but getting a free burger which isn’t inferior to the competitor’s in quality is something a cash-strapped consumer will consider (and appreciate).
4. Competition inspires innovation
In November 2016, pizza franchise Debonairs opened its 600th store, 25 years after selling eight pizzas on their opening night. Craig Mackenzie, Debonairs Pizza founder credits his company’s success largely to their innovative nature. Debonairs Pizza was the first to introduce free delivery and online ordering locally.
The concept was improved upon with their ‘Hot or Not Dot’ and Acutemp delivery bags. “If it’s black it’s free” became the franchise’s tagline, referring to a temperature-sensitive sticker attached to every pizza box bought in-store or delivered. Speciality pizza innovations like Double Stack®, Triple-Decker® and Crammed-Crust® also kept them relevant and ahead of emerging pizza franchise competitors.
The increase in the number of global food franchise concepts coming to South Africa isn’t as bad for local chains as it may have initially appeared. Market awareness is being created, service is improving, more value is being offered and it’s prompting innovation. When your customers fall in love with your product, service and value, they won’t take a second look at the next competitor who comes along.
- Improve your service by finding out what your customers want – using social media – to avoid losing them to a competitor
- Give your customers value for money with specials on certain days of the week, or discounts when they buy a certain number of menu items.
- Be creative and innovative with your products and offerings to attract and keep clients in your target market.