Did you know people’s habits have changed, as they prepare to “tighten their belts” this winter? Maybe you’re aware of this within your network – or you yourself have started to change the small things at home, like how you shop or when your heating is switched on.
The Guardian reported on Wednesday 12th October, following the release of the latest data from the ONS, “The decline in national income (GDP) was 0.3% over the three months to August, as the cost of living crisis appears to have hit hotels, restaurants and the leisure industry the hardest; output fell by 5% in the arts, entertainment and recreation sector, and by 1.8% in the food and accommodation services sector.”
Martin Beck, chief economic adviser to the EY Item Club, stated an inflation rate of 9.9% will continue to eat into household spending power. While the recent rises in mortgage and business loan costs “could well add to the real income squeeze and potentially cause a house price correction”.
And here we have the crux of the issue, for the potential growth of your franchise, and the impact facing us as business owners. Some industries will be hit harder than others – as we saw during the pandemic: We’re all in the same storm, but we’re not all in the same ship. Whilst some businesses will flourish under the conditions we’re experiencing, unfortunately, there will be more pressure and more potential closures – maybe even within your own franchise, as the cost of running a business isn’t balanced out by customer spend.
So, does this mean we should stop trying to grow the network?
No. Although the pool of potential franchisees is somewhat smaller than under “normal” economic conditions, those who are looking will have the means to invest. And they’ll be looking for a brand which is strong, and won’t crash during the upcoming downturn. This is the foundation on which your marketing needs to be built, over the coming months.
I’ve never been through anything like this!
First of all… don’t panic! Many brands within our franchising world, have lived through a downturn – and they survived; even thrived. I know many of our clients learned important lessons as a result, and have already started to implement these to their network – as I have no doubt some of you will have, too. So, if you haven’t been through anything like this, reach out to other franchisors who have. Talk to them about what they did, so you can learn from them. As you say to your network: You’re in business for yourself, but not by yourself.
So, I shouldn’t stop marketing?
No. One of the first things people usually pull back on, during times of economic crises, is marketing. But this is the worst thing you can do. Especially if your competitors don’t turn off their marketing! It is better to revise your message, and redirect your spend. There are people watching to see how well you are doing, to discover if you really are right for them.
So, how do I refine my marketing?
Be open, be consistent, and use what you have. Your target audience may be feeling a little vulnerable about their future. They want to make the career change, but may be feeling a little wobbly about doing so. If you have stories within you network of past downturn, or economic challenges, now is the time to tell them. If someone opened their franchise in the middle of a downturn, this will make a great story, and will bring a sense of reassurance. And before you say you don’t have any… Two years ago you led your franchisees through the pandemic! These are stories you can start to use – if you’re not already!
Talk about what is happening in the UK. But also talk about what is happening in your network. Show the network growth stats. Show an individual franchisee’s increased performance. Show how you are supporting your network, and ask your network to talk about the support they have from you.
The worst thing you can do, and the least authentic, would be to gloss over what is happening, or churn out, “we’re fine, you’ll be fine, the world is fine” type pf messages. This will only look as if you’re living in a bubble, away from the rest of the UK. Discuss what’s happening within the industry you’re operating in, the impact on customers, and how you, as the franchisor, are supporting your franchisees through each challenge.
We’re here to help
Hopefully, this has given you enough of a starting point as you focus your marketing strategy over the next few months. We’re here to guide you, so if you want some help around refining your marketing for the current situation, then please do reach out to one of the Coconut team. We’ll be more than happy to work with you.