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Is it time for your franchise to invest in tech?

Written by Jon Card on Wednesday, 03 February 2016. Posted in Technology

Whether it’s maintaining customer expectations, coping with growth or gaining data to understand your business, technology is fast becoming an essential investment for franchises

Is it time for your franchise to invest in tech?

Franchising is one of the most effective models for growing a business. But for all companies, growth presents challenges around administration and maintaining standards. Increasingly, the answer to these challenges is to use technology but this is often easier said than done. Digital technology is indeed powerful and effective but it can also be expensive and its rollout can be time-consuming. Furthermore, the question of what technology to invest in is one that not all franchisors feel well equipped to answer. Nevertheless, as demonstrated by the following franchises, an investment in technology can deliver significant returns to any business.

Finding an expert 

Mark Llewellyn is the managing director of Revive UK, which provides car repair services for minor issues such as cracked windscreens and damaged tyres. The business has grown rapidly in the past five years, more than doubling its number of franchisees to 70 and taking on a number of major contracts with car dealerships and fleet management companies. In order to cope with this growth, the business has invested close to £200,000 in IT and digital technology over the past four years. Llewellyn says it has been a challenge, especially as IT is not his strongest suit. “I’m not an IT person,” he says. “One of the problems with investing in this area is that you have to start off by believing someone who says they know what needs to be done.”

Revive provides bookkeeping services for its franchisees and Llewellyn says about 50% of sales calls come through head office. Because of this, there was a growing amount of paperwork and phone calls. Just over four years ago, Llewellyn and his team realised it needed to upgrade its administration, which was still paper-based, involved substantial duplication and was increasingly expensive. “The amount of paperwork and duplication was becoming significant and, as we grew, it was becoming unwieldy,” he says. “So we invested in a long-term IT plan.”

The business initially dealt with some IT consultants but Llewellyn felt they were more interested in selling them products than creating a system that really worked for his business. Eventually, he opted for a more novel approach: a knowledge transfer protocol (KTP). This involved an agreement with Coventry University, where graduates in computer science, supported by their lecturers, would work for Revive. “The university is getting graduates placed in industry and, in return, we’ve got a computer science graduate,” Llewellyn explains. 

Through the KTP, Revive was able to research the IT market, install a new system and create an IT department with three staff, two of whom are Coventry University graduates. This has led to the creation of an integrated CRM, booking and accounts system. Tablets have also been issued to staff on the road who use an app designed by the company’s in-house team. 

“Working with the university has been fantastic; I think KTPs are a brilliant idea,” says Llewellyn. “I’ve tried working with third-party IT companies but they are just interested in selling you products from their suppliers. However, a university is there to help you and there was a real difference in approach.”

While Llewellyn says that the rollout has been largely successful, he warns franchisors that IT system overhauls are long-term projects. “When you’re dealing with IT, double the amount of time you think it will take,” he says.

Data-powered business

One of the benefits of investing in digital technology is that it can unlock data and information that was previously unknown. Christopher Aston, director at Expense Reduction Analysts (ERA), the procurement franchise, says the £1m investment his business made in its “state of the art” customer relationship management (CRM) system has meant better information and a large uplift in sales. “We made a significant investment in our IT system, replacing our old Lotus Notes system with a Microsoft Dynamic CRM.” he says. “Having a good CRM means you can better plan and manage your sales campaigns. Since we started using this system, we’ve had an 80% uplift in direct marketing appointments.”

Unlike most franchises, ERA doesn’t sell geographic territories but instead enables its franchisees to select up to 150 clients that become its targets. But in order to make this system work effectively, good information, data and a suite of online tools are required. Thanks to its new CRM, this is something that ERA has access to on a daily basis. “It’s a dynamic system, so it’s online and you can log into it as long as you have an internet connection,” he says. “We also use a Microsoft bulletin board, which enables all of our franchisees to keep in touch and post questions.”

Data can be a powerful and persuasive tool and, combined with the right software, can generate powerful visualisations that can be used internally and externally. As Aston says, “We can create some lovely infographics and this helps us to understand our business. It also helps us to make sales.”

Aston believes that oversight of the business as a whole has improved as a result of its investment in technology. “The new system enables us to do business reviews with our network and have data showing exactly how much revenue each account is bringing in,” he concludes. “It makes a massive impact on management reporting but also on our marketing.”

Consumer friendly

Technology has become central to the lives of consumers and many expect fast, flexible and digitally powered services as the norm. For many, this means fast and effective online services that can be accessed by mobile devices. It’s something that Jo Stone, co-founder of swimming-lesson franchise Puddle Ducks realised, leading her to embark upon a major investment in her websites and online-booking systems. “We could see that the growth was coming but the system we were using wasn’t sustainable,” says Stone.  

Parents with young children understandably have to make cancellations from time to time and one of Puddle Duck’s offers was greater flexibility of booking. “One of our unique selling points is that customers are allowed to rearrange cancelled classes,” she says. “However, this meant franchises would spend a lot of time on the phone and doing admin. With the new system, customers will be able to book, pay and rearrange lessons online. That’s a much better customer experience.”

Before implementing the new system, Puddle Ducks researched the market, spoke to 50 or 60 IT specialists and examined many off-the-shelf systems. However, it decided that it needed a bespoke system and hired a company to redesign its websites, make them mobile-friendly and create the booking system. Puddle Ducks is now rolling out the system and hopes this will be complete by the summer. It has also appointed a full-time IT manager from within the company to oversee its rollout and the training of staff and franchisees. “We are fortunate that we had someone in the business who really understood it,” says Stone. “They were the perfect person for the job.”

Stone says the company has invested about £60,000 so far and that the overall investment, including salaries, will be over £100,000. However, she is confident that the new system will deliver strong growth. “Customer service was the main driver; we really wanted to make it better,” she says. “But the franchisees were also wasting a lot of their time on administration. By reducing that, it means they can now spend more time growing and marketing their businesses.” 

About the Author

Jon Card

Jon Card

A writer and journalist specialising in small business and enterprise, Card works as a freelancer for The Guardian and was previously editor of Birmingham Living magazine. He is a proud father of a gorgeous little boy and a big fan of the USA.

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