Tuesday, July 27, 2010

Top 8 Reasons Franchise Businesses Struggle with Social Media

In the course of developing 2 franchise concepts (Five Guys and NAKEDPizza), I'm trying to bring my online marketing/software background. Right now, I'm trying to figure out the best way to use social media at the ground level. Turns out it is hard. Really hard.

Part of this is structural; Five Guys never ever coupons or discounts (which I think is great), so unlike Red Mango, we can't simply place a $1 off coupon on my Facebook page for all to download. Part of this is where these businesses sit in their evolution; for NAKEDPizza, we don't have a lease signed yet here in MA. The experts at Hubspot would tell you to start sooner rather than later, but there is such a thing as kickoff a Facebook and Twitter presence too soon.

All that said, I have spoken with other franchisees in different concepts and it turns out we all have variations of the same problems. Here are a few of them:

1. Brand Ownership: As a franchisee, you are basically 'renting' your franchisor's brand, which they invest time and energy developing while you work the street level. Your performance in turn helps build the brand. But in the 21st century, customers build the brand, and these customers are interacting with you, not "national". On Facebook and Twitter, should they be interacting with you directly, or "national"? Put another way: whose customers are they? The brand's? Or the local business owner's?

2. Social Media is New: Very few franchisors understand how this world works - they are experts in gyms, burgers, home health care, etc. Many of them are based in places far from the social media capitals on the coasts or Boulder or Austin, so it's hard to recruit people in-house or even experienced local agencies to come up with a cohesive national/local strategy.

3. Social Media is New, Part II: If few franchisors get the social media world, that's even more true for franchisees, many of whom get into franchising because they want to operate their very own business. This is a great outcome for a lot of people, but it turns out that managing a single unit of (name your concept here) is often an 80-hour a week job that doesn't leave a lot of time to learn new things.

4. Local sensibilities: Weather-based tweets suggesting that someone eat out (very effective) don't work nationally. Ditto for sports, local events, etc.

5. Local vs. regional: On a smaller scale, what works in metro Boston doesn't work in Springfield; what works at Carolina probably doesn't work at Duke.

6. Content is King: Coming up with 'remarkable' (another steal from the Hubspot guys) content is pretty difficult even when you do have a distinct product like Five Guys or a compelling social mission like NAKEDPizza. Making this doubly challenging, the point of brand-building content is incenting your customers to collaborate on building your brand -- "brandsourcing" if you will -- so your initial tweet or post needs to inspire your customers to join the conversation. But now we're back to the tension of whose customers they really are.

7. Operations is King: If you're going to coupon or discount on Facebook and Twitter, you want to track whether your particular offer moved the needle. This means your store's point-of-sale (POS) system better handle coupon codes and your store's staff needs to know how to key things correctly. Using QR codes? Another operations challenge. And what about local v. national discount codes? What if my neighbor franchisee offers a coupon - do I have to honor it? The more I look at this, the more I admire Five Guys for never ever couponing.

8. Multi-Channel Blues: Most businesses use many channels to talk to their customers. Coordinating this is hard enough when you control all means by which messages are transmitted. But what about the franchisor that does (for example) direct mail as well -- can franchisees control their own direct mail messages but not their social media presence?

As franchisors start to consider guidelines, many have started with a perfectly logical answer, which "No local social media until further notice." Others have tried the "Let 1,000 flowers bloom" strategy as this is the agile development approach to solving a complex but important problem. That is, they've said "Hey franchisees, we trust you: you handle it, and we'll figure this out together." I'm a collaborative person, so that intuitively makes the most sense to me -- but then both social media and the franchising world are like the Wild West, so sometimes it pays to have a sheriff with a very big gun.