At a time as a business we were focused on making sure that our customers were thrilled with our service, we were going to be forced to put even more pressure on their finances by increasing their cleaning fee, the result of the increase in the National Living Wage (NLW) planned for April. There was really no other option for us other than increasing our prices because if we didn’t, it would mean lower profitability for our Franchisees, something that we can never accept.
Over 40 years in business we have run many different sales campaigns that reward Franchisees who achieve sales targets with trips to places like Antigua and St. Lucia in the Caribbean, Venice, Athens, Rome and most recently Seville. We love these sales campaigns as much to reward our Franchisees for their hard work as providing a short-term focus to help them grow their business, and grow they do. Many Franchisees who qualify for these trips end up achieving double digit sales growth in the process. But campaigns don’t have to be sales growth oriented they can cover any number of areas of your business which is why we turned to this tried and true tool to help us achieve what would become one of the most significant price increases in our history. As the cost of living ‘crisis’ was really taking off, we were preparing for an across the board price increase to all of our customers.
Certainly, there were a few deep breaths with Franchisees when we discussed a price increase with them because with everything else happening to family finances, our price increase would be yet one more and possibly result in some of our customers canceling their service. But the increases had to be put through to ensure that Franchisee profit margins were maintained.
Fast forward to June 2023 and the results of our Price Increase campaign have been truly remarkable. 90% of our Franchisees increased their price in the campaign, with an average price increase of just over 8%. But with a detailed communication plan involving electronic and direct mail, as well as more frequent personal contacts by Franchisees, customer satisfaction levels actually increased (as measured by cancellations), and as a result, the campaign led to an increase in our monthly system wide turnover of 11% (from January to June), with our top 10 Franchisees increasing their monthly turnover by just under 36%! Quite amazing results.
Some of these exceptionally strong results are down to our industry dynamics, where we have seen record demand for our services coming out of the pandemic and Brexit because of a lack of cleaners, but our strategy of using short campaigns to drive business activity also played a key role.
There are a few elements that we always incorporate into our campaigns, whether they are sales, customer growth, customer satisfaction or in this case, pricing.
- Brand it and be creative with the name. Campaigns have of course a business focus (such as what is indicated above) but calling it by it’s business name won’t inspire Franchisees. Our sales growth campaigns for example are called ‘Molly Maid Escapes’, with the emphasis on escaping to another country. Move beyond corporate KPIs to inspire your Franchisees.
- Keep it short – a matter of weeks or at most a few months. This will allow you to keep the momentum going for the duration of the campaign.
- Make an investment yourself. In our price increase campaign we paid for an increase in the paid search budget for all of our Franchisees to help them bring on new customers at a time when we may have seen an increase in cancellations both because of our price increase as well as the cost of living. For Molly Maid, the upshot of this was that we didn’t actually experience an increase in cancellations so the new customers that we added helped to achieve very significant sales growth.
- Communicate, communicate, communicate. Franchisees are incredibly busy so take every opportunity to communicate all of the elements of the campaign and what they can do to take advantage of them. We use our company intranet, Workplace (like Facebook but just for your company), our New Year business launch meeting in early January and even old school communication channels like the post. You can never communicate too much, especially on major initiatives.
Campaigns are a hugely important part of the constantly evolving business strategy at Molly Maid and one of the reasons why we have been a fixture in the top 15 of the Elite Franchise 100 rankings. We have fun designing them and find that it leads to lots of different creative and different ways to help Franchisees. And, it’s even more fun to see the results that Franchisees achieve at the end of the campaign.
Jonathan Holden is the Chief Operating Officer for Molly Maid UK and leads the organisation’s Franchisee support initiatives, including designing effective campaigns to help their Franchisees achieve growth in their business.
This article comes courtesy of Molly Maid, the UK’s leading home cleaning franchise. Molly Maid UK is a full member of the British Franchise Association.
