When I took over Monkey Bizness Franchising, an indoor kids’ play concept, in 2015, I asked our franchisees a question, “How many times do you think our average customer comes each year?”.
We had four franchisees at the time and I got for different answers ranging from 6 to “I have no idea”. We had a POS system that could theoretically track our customer’s behavior, but it was only as dependable as our front desk people (which is to say, it wasn’t). I had come up with an idea to use our merchant services provided to try to answer the question, but I knew the accuracy of that was questionable at best.
When I took over Monkey Bizness, I embarked on a mission of building a “better customer”. I wanted to increase the amount of spend that the average customer had at our stores on a yearly basis. In order to even begin this process, I had to figure out how many times our average customer was coming in.
I will spare you the drama…..I couldn’t figure this out. At least not with our current systems in place. And if our current systems didn’t allow me to figure that out, there was no way that I could rely on them to help me on my mission of building a better customer. Tracking our customers was supposed to be the easiest part of the process. The hard part was then implementing a strategy to identify who was our best customers, identify the characteristics of our best customers, figure out how to incentivize others to spend more, figure out where I could find more of these people, and best be able to reach them.
And these were just the store level goals…
I also had an ambition to use this data to help future franchisees by being able to identify how far away our customers were coming from and approximate market share so I could better predict what would be good markets for us to expand to.
In order to answer these questions and more, I needed to change somewhat how Monkey Bizness worked. This wouldn’t be a dramatic change, but I needed to build a process that enabled me to start capturing the customer data I needed.
It took the better part of 16 months to develop and implement this system across our stores. It was a learning process throughout the entire time, but today, we have over 160,000 parents and 300,000 kids in our database. I can tell you how often each of them come, what time of year they come, how old the kids are, when their birthdays are, what coupons they respond best to, and many more data points. On the surface, what we implemented was a customized waiver and loyalty system. However, the magic is what happens behind the scenes.
As I work with clients, I urge them to implement a system to capture their customer’s data. This data can be some impactful in determining the success of a business. While a loyalty system is often the face of capturing this data, it is what is going on behind the scenes that really matters. Below are three considerations franchisors should have when determining if a loyalty system is right for their business.
Does the System Fit Your Business?
One reason the system we implemented at Monkey Bizness was so successful was that it was a natural fit for our business. As customers came in, they are required to sign a waiver. As such, we combined our loyalty program and waiver system. Customers didn’t have a choice to be a part of our loyalty program. If they wanted to play in our stores, they needed to sign a waiver. In order to do that, you needed to have an account with us.
We custom built our system and as such, it fits our business like a glove. We had to change a few processes internally, but it was a better process for the customer.
It had the effect of improving the customer’s relationship with our business as well. Now when a customer comes in, they show some pride that they already have an account with us when they sign in. The system worked so seamlessly with us because it fits our customer’s expectations and our current process. Yes, we had to make some tweaks, but it was a natural step in our customer process.
When looking for a system for your franchise, make sure you take into account both internal and customer viewpoints. The system should somewhat match what the customer expects when interacting with your business. If it doesn’t, you’re not going to be able to capture the information you need.
Can You Customize the Data You Capture?
At Monkey Bizness, we really only care about a few key pieces of data. Sure, we want the customer’s name, but what we really want is their zip code, kids’ birthday, and email address. The system naturally tracks how often they come in. With just these key pieces of data, we get most of what we need.
It’s important not to overwhelm your customers when capturing this data. If you play 20 questions with them, they will have a negative experience and either not utilize the system or it will scare them away from your brand altogether. Because of that, you really need to think about what data is important to your business.
On the flip side, you need to make sure the system is able to capture the data that is important to you. For instance, it may be very important for your business to capture the age of your customers. You could do this by asking for a date of birth. However, if the system doesn’t allow you to do this, then this may be a key piece of missing information.
You need to think about what information you want to capture and how that information will be used to make better business decisions and build a better customer. Once you have that list, figure out if the system you are considering will allow you to capture that information.
How Can You Access the Data?
Before figuring out how you need to access the data, you should figure out how are you going to use it. Do you want to do some heavy analysis? Do you want to load your customer list into Facebook to better reach potential new customers? Do you want to just use it to do email marketing?
A super data nerd like me wants a spreadsheet of all the raw data. That way I can play with it in my own sandbox and spit out all kinds of information that most systems won’t tell you. For me, if you can’t get a raw data dump out of the system, then I wouldn’t use it.
At Monkey Bizness, we developed a custom system that was the right fit for us. Yes, it was more expensive up front, but it has already paid for itself in helping us grow our business and created a custom software platform that helps us market our franchise system.
The decision needs to be made carefully. The only thing harder than implementing your first customer tracking system would be implementing a second one. For this reason, take your time and make sure that you can answer the three questions posed above at a very minimum.
The rewards are plentiful once you get access to this information. You can truly start to make better business decisions and build better customers. While this article only talks about finding the right system for you, the next big step is figuring out how to interpret the information. If big data sets and number crunching aren’t your things, it is time to bring in a resource who knows how to.
About Krieger
Krieger Analytics works with franchisors to help them with their profits and grow through accounting, finance, and bookkeeping. I am a great partner to work with for franchisors because, like them, I am a franchisor. I am not the perfect match for all franchisors so I have honest conversations upfront to see if I am are a good match for you. Contact us now for a call to learn more about us and have a conversation about your business.
Pingback: You Could Be Losing Big If You Aren't Tracking Marketing ROI - K-Analytics