Marketing Resource Management for Franchise-based Brands
Most franchise brand marketers agree they operate within unique company cultures with distinct opportunity and challenge. CMOs continuously champion the cause for investment in marketing and advertising to accelerate brand growth and expand the network.
The top performers understand in-housing vs outsourcing strategies to make the most of their marketing resources, including how to employ Tier I and Tier II agencies.
Here’s our view of how it all works together:
Check the Checklist
Top performing franchise organizations serve their franchisee base by structuring marketing resources and activity to both lead and support the needs of their organization.
The Top 10 practices can apply to various types of franchise marketing organizational structures, e.g., centralized or corporate marketing departments, local marketing shared services departments, in-house agencies or third-party providers.
- Start with Strong and Trustworthy Leadership
- Create a Healthy Win-Win Culture, one that values collaboration
- Define an easy to understand Organizational Structure
- Design an Agile Ecosystem of external integrated marketing suppliers
- Plan to disseminate the Brand Strategy to align and educate
- Plan for Scale – i.e., ops delivery of Marketing & Support Services
- Make widely available Local Marketing Training Programs
- Set up ear to the ground continuous feedback measures
- Define and align to KPIs & Performance Measurement expectations
- Set Innovation & Growth-oriented Initiatives, micro-test with willing franchisees, then expand
- Practice outstanding Stewardship of Marketing funds
Today the evolving use of technology enables these best practices to be widely deployed across the enterprise; technology also enables the ability to monitor feedback to what’s working and what’s not.
The accelerated path to growth requires keeping a lot of irons in the fire, however, some things like strong leadership and healthy cultures are table stakes, otherwise success in other areas will be limited.
Money Matters
Most C-suite leaders understand the obligation to perform. Because franchise company models require franchisee owners of all types and sizes to contribute a percent of sales revenue to the national ad fund and spend additional funds at the local level, there are resulting complexities. The local funds are often aggregated and managed in cooperatives with size-able purchasing power in their own right.
Some system needs are cost effectively met with internal to company talent, others by external partners who increase capacity or deliver added value.
The national ad fund (NAF) monies are to benefit the franchise system as a whole and all of the system’s franchisees from a macro level; Brand building, partnership and sponsorship programs as well as web platforms for lead generation are the most popular and efficient uses of national ad funds.
While national level initiatives are popular and highly visible, efficient execution of the local marketing efforts make more direct impact for the franchisee owner.
The local ad fund (LAF) contribution for all of the franchisees should be viewed as “the same money that every successful business owner should be spending to promote their business,” according to Rick Bisio, author of The Educated Franchisee.
LAF money spent towards creating turnkey programs the individual franchisee owner can execute with ease will create needed confidence in digital marketing, and inspire her/his incremental ad investment.
Success Formula
“Franchise marketing can be as easy as 1-2-3,” explains Michael Goldberg, ROJEK Consulting principal and industry expert. “The most powerful marketing systems respect the differences of marketing partners to inspire at brand level (tier 1), motivate at market level (tier 2) and conquest at the local level (tier 3) all while having a culture of collaboration that embraces the cumulative value of all.”
Minefields Ahead ?
Most leaders ride their carousal with lots of owner-operators on board. Tensions run high when needs aren’t met. Many franchisees rely on the company’s leaders and marketing support teams to help keep pace with the changes in the digital marketing landscape. Others value strategies to equip them to respond in real time to their own local market competition.
Advertising agency partners often step in to help CMOs and their internal teams make the marketing magic happen.
Yet one agency rarely solves all (even those with best intentions). In fact, it’s a disservice to the enterprise to assume so because the wirings of agency types are as different as multi-tiered organizational needs.
Fast-growing franchise companies equip themselves with different types of marketing, media and creative agencies to work in tandem. They structure an agile ecosystem of external marketing suppliers and agencies that come together in intentional ways to serve the whole.
Great at Tier I
Hiring a best-in-class agency partner to steward NAF funds is foundational to success, even with in-house company personnel in place. The full service advertising agency increases marketing growth capacity, especially when they come to the table equipped with experience skill sets relevant to the franchise business model; without this experience the agency learning curve is steep and expensive for the advertiser.
Their scope of work usually includes brand strategy and data analytics, with a sharp eye to the investment planning required across media platforms to maximize NAF power; Top Tier I agencies also bring stellar creative competency to evolve & strengthen the brand, sharpening its competitive positioning at a national level.
The larger the advertising investment, the more important evaluating the Tier I agency infrastructure and systems to support growth become.
ROJEK is excellent at strategic sourcing. I highly recommend their insights driven process to define and focus on what you really need in an advertising agency partner to help grow your brand. The CultureFit™ process is a game changer and was our touchstone of insights leading us to our perfect fit.”
– SVP, Brand Marketing, Neighborly, 2022
Great at Tier II
Growing franchise brands seeking to scale faster are better served by recruiting dedicated agencies with different capability and local marketing expertise to support their franchise local marketing needs; Expecting the Tier I agency to extend to cover Tier II work can be an expensive proposition for the advertiser; one that slows progress, dilutes resources and shortchanges enterprise-wide relationship management required of the agency.
Tier II: The company roster should include a diversity of skilled agencies specifically recruited to support discreet Market Segment, Brand, Media Channel, or Regional Geography needs, depending on the business model.
Qualifying the best set of LAF agencies to add to the stable assumes a few required capabilities:
- Credentials for Franchise / Multi-Unit Business Experience
- Regional / Market-Specific Expertise – Understanding of local competition, regional and cultural nuances in market.
- Deep resources to execute multi-channel local or regional marketing campaigns that complement national advertising campaign programs.
- Integrated (Traditional and Digital) Media Strategy, Planning + Buying Power
- Strong Value Prop – Agency fees for services at fair market value
How Will They Collaborate Together?
Within the fast-moving world of franchise brand marketing there are a few core values (among the hundreds we measure) that should be pretty front and center to aligning teams inside, and then sourcing the right external agency partners set to work together and get the job done (well).
Sourcing agencies to align with unique company culture and values systems is the difference between everything working, or nothing really working well; it improves team building and agency selection success rates.
Sometimes there are already a lot of people in the mix. Current agencies are doing a good job but feel like they get pulled into a vortex of activity.
Solution: re-laning current suppliers into position with focused scope and tight compensation, then defining better ways of coming together is possible. It requires understanding three key things:
- who is really wired to do what better than others
- how the agency supplier eco-system should come together to deliver highest value
- what behaviors of collaboration and teamwork are important to success
Flying Forward
Did you know the oldest carousel in America in continuous operation is located in Watch Hill, Rhode Island? It’s called the Flying Horse. The 20 colorful, hand-painted horses are not actually attached to the floor but suspended from a center frame, which gives the rider the sensation that the horses are flying.
How cool is that?
Orchestrating across teams of people assumes the right people are in the right places, doing the right things in the best way possible.
When you are ready to find the best NAF or LAF agency partners to inspire your path to growth, ROJEK can help. Re-laning your agency suppliers also sets up the marketing organization for success, capacity and results in accelerated movement towards goals.
We offer clients across all industries expertise with in-sourcing and outsourcing, then structuring the right supplier solutions, and yep, we understand the franchise business model particularly well.
Start your review of the status quo this fall, to ensure you’ve got the right resources in the right lanes for the year ahead.