Do Customers Value Loyalty Over Convenience?
It’s a common challenge in franchising. You enter new territory and are faced with immense loyalty for already-established local firms. Despite being a start-up that’s not too dissimilar from many businesses in the area, you’re considered the faceless conglomerate.
Part of your role as a franchisee is to challenge this way of thinking and integrate within your local community. However, to do that you have to offer an incentive which can rival the satisfaction of supporting deep-rooted businesses.
Some will offer low prices, others will innovate and adapt their offering, and some may even use the fact they’re part of a large organisation to imply credibility. Either way, franchise businesses have to do something in order to compete. Otherwise, they’re unlikely to achieve a profit in their first year of operation.
So, to help any prospective franchise businesses out, here we’re discussing whether customers truly value loyalty over convenience and how that loyalty can be overcome.
Relevance trumps rewards
According to a recent study, 71% of consumers claim that loyalty incentive programmes don’t actually encourage them to be loyal. Due to the digitalisation of services, customers are presented with offers every waking moment – they have gotten used to simple, traditional advertisements and rewards.
Social media algorithms push brands that are deemed relevant to certain individuals’ newsfeeds. These individuals now buy based on need, and social media is effectively manufacturing that need. In other words, you need to sell your services online in a way that is relevant to your immediate audience so that it stands out from their online updates.
For example, if you’re a specialist cleaning company and trying to unseat the leading local market leader, advertise in a way that feels more proactive and conscious of local matters (including flooding, fires and shop closures). Online, behave in a manner that displays knowledge of local community issues and routinely plug how your service addresses them.
Dependability surpasses devotion
If your service could be enhanced by having an app, there’s an opportunity to stay present at times the local businesses aren’t. This is true of gyms, accountants or even after-school clubs. Having technology that provides the user with easier access to your service will place a wedge between them and their loyalty.
Say, for example, that the local firm relies on interactive voice response in their call centre. Entice their customers by making customer service your priority. No one enjoys an automated, robotic voice on the end of the phone – it’s cold and makes the customer feel undervalued. Consider allowing clients to come through to a mobile, or maybe install live chat on your site. Even simply responding to queries on social media more rapidly can make an impression.
You won’t even need to drop prices. According to a study conducted by the University of British Columbia, people feel happier spending money in order to save time. Make it clear to your audience that, while you might not be local, you will provide a service that is less time-consuming. Emphasise your convenience and smooth processes and they’ll consider you.
Customers are value-conscious
Your audience isn’t blindly choosing to be local. It’s a choice based on what they believe most benefits them and their immediate surroundings. You need to change the narrative so that, by investing in your solution, they – or the wider community – stand to benefit more from your services. This is especially true if you’re a high-value franchise that offers luxury purchases.
Fact is, loyalty is easily challenged when the competition is working harder for less. Returning to the specialist cleaning franchise example, if your team included more restoration work for the same price, word in a local community will quickly spread – rewarding you with an increase in perceived value.
At Rainbow, for instance, we go the extra mile for those whose homes have flooded by helping refurbish damaged furniture (or replace it if necessary). This is to deliver on our promise to restore homes to the condition they were in prior to the flood. It’s this touch that elicits positive responses and creates a preference for our service.
Professionalism is underrated
Sure, a local garage might get to know you and be able to ask questions about your personal life, but there’s something to be said for a technical team that’s reminiscent of a Formula 1 pit team. Customers want to feel like their money is being well spent; uniform, tools and equipment play a role in this.
Often, if there is a relationship formed between a customer and local business, the customer is aware of the shortcomings in that organisation. Franchise businesses can use this to their advantage by positioning themselves as the fully ‘outsourced’ alternative, offering turnkey solutions only.
At Rainbow, we provide our teams with the tools and technologies that are at the forefront of specialist cleaning innovation. This isn’t solely to support them in their role, but to assure the client that they’re in the best hands. It’s this level of reassurance that franchise businesses can incorporate into pitches.
But this isn’t unique to our industry. There are plenty of markets that have varying levels of technologies (and even certain skills in-house that allow customers to get more out of a service than they’re currently getting) which can make or break an organisation. Investing in these allow for a clear, visible difference between you and local businesses.
It makes sense that customers would value convenience – but, as can be seen, there are a number of specific elements of that convenience which influence the purchase. You can’t simply argue that you are easier to use or offer more value without demonstrating some sort of distinction between you and local businesses.
We’d love to hear your experiences in tackling brand loyalty and breaking into new locations. It’s always comforting for budding franchisees to see that it’s possible to breach a new territory successfully. So, if you’d like to share your story, please contact us on our Facebook, Twitter or LinkedIn today!