Business Marketing: all you need to know as a franchisee
Many entrepreneurs new to franchising underestimate the importance of marketing for business. In this short blog post, we’re looking at how marketing your business is essential for beating your competition.
Marketing importance for a franchise
Even though a franchise is often already a strong brand, business marketing investments are still paramount.
Consider this: about 100 new franchises open per business day worldwide. We live in times when many businesses try to compete for customers’ attention.
Resultantly, even the most famous franchises—such as McDonald’s or Starbucks—are constantly trying to attract new loyal clients and increase consumer engagement. You’ve guessed it already: they do so by shaking the most attractive business marketing campaigns out of their sleeves.
For instance, KFC’s business marketing budget takes up to 6% of the company’s total revenues. It seems unimpressive—until you learn that KFC’s total yearly revenue is around 6 billion US$, making the marketing budget $360 million. That money mostly goes into social media advertising and other types of online customer acquisition. Next to that, every local KFC in, say, Latin America or Asia is investing in their own marketing campaigns.
Marketing your franchise is the only way to win loyal customers that’ll keep coming back. Combined with high-quality services, a well-planned marketing strategy allows you to attract customers for free too, by the magic power of word of mouth.
Franchises come with an effective strategy for marketing
Franchisees are better off than lone-wolf entrepreneurs in terms of marketing for new business, because franchises always come with high-quality marketing materials.
For instance, Lolo provides its business partners with a well-thought-through marketing strategy and many pre-designed assets. How do we guarantee this high quality? A team of professionals experienced in branding, market positioning, and promoting ride-hailing businesses has designed it and tried it out multiple times. As a Lolo business partner, you don’t pay anything extra to get these materials. Use them as marketing assets for your business and let them work the magic. 🙌
The thing is, the individual success of each Lolo across the world contributes to the success of Lolo in general because it contributes to the overall strong reputation of a business. This is why we take the marketing of our franchisees seriously. So seriously, in fact, that we reinvest half of your initial investment in the Lolo franchise into a digital customer acquisition campaign to bring you the first loyal clients. You can use that campaign to increase consumer engagement, too. In terms of marketing your business in a new city, this is a great start.
You know best how to market your business
Ready-to-use business marketing assets or not, there’s one person who knows best how to market your business. Yep, it’s you. Why’s that?
Factors such as local market differences, your Lolo’s own strategic goals, and target audience specifics all contribute to what exactly marketing strategy and efforts will be the most effective for your company.
For some countries, radio and TV advertising placements would do the trick. For others, digital business marketing and influencer marketing will be the silver bullet.
From recent research, we know that populations all across the globe spend more time online.
Much of the time spent online goes into entertainment, but lots of it is also used to acquire information about products and services worth buying. Here’s an example of how users in Latin America search for relevant company reviews online.
Getting back to our KFC example, in 2021, KFC in Mexico launched a video advertising campaign to both celebrate the 80th anniversary of a particular KFC dish and raise awareness for COVID-19-related social distancing. With this ad, the local KFC really managed to tap into the culturally relevant experiences of the target audience, ensuring the campaign’s success. No centralized marketing campaign can do such a thing.
How much to invest in marketing for business franchise?
How much do you need to invest in your business marketing? Lolo’s partners’ first marketing campaign is already paid for by Lolo (the sum is half your initial investment in the franchise). You also save money on developing a marketing plan and designing the assets (banners, merchandise, logos, etc.).
From there, it’s a good practice to start financing your marketing for new business with 12 to 20% of your gross revenue. Your first marketing campaigns need to attract loyal customers as much as trustworthy employees to ensure the company’s viability.
Once your company is established in the market (which happens in five years, mostly), you may consider cutting marketing expenses to 6 to 12% of the gross revenue—and still be a real business success story in your country.
It is, for sure, a lot of money. This is why marketing performance tracking of every cent invested is paramount. This, though, is something we’ll talk about next time. 🤓