One Huge Marketing Problem Every Retail Franchise Faces, and How to Fix It

Across the franchise brands I’ve worked worked with in the retail, QSR, fintech, and automotive industries throughout my nearly 20-year marketing career, one hot-button issue seems to rise above the rest. Equal opportunity marketing — or better expressed by franchisees, “How are my marketing dollars specifically helping my store?!"

Inevitably, when individual marketing contributions are being aggregated to fund national or regional marketing programs in an attempt to benefit the many or all, some locations get left behind. A rising tide lifts all boats, but not equally in the eyes of franchisees. There’s the rub.

As franchisors, we need to do better by those entrepreneurs who have chosen to invest their money and trust in our brands. In this article, I’ll dissect the hyperlocal marketing problem and how to solve it.

The Problem: Ad Funds Don't Benefit All Franchisees and Retail Locations Equally

Franchisees typically contribute 2 percent to 7 percent of their gross sales each month to one or more advertising funds: national marketing or brand, regional co-ops, and a required local store marketing spend.

The marketing equality problem typically surfaces when national or regional co-op advertising dollars are being used to fund geo-targeted digital marketing campaigns around all locations in a franchise system or specific designated market area (DMA). It’s not a question of whether each location receives brand awareness, sales and a return on investment commensurate to their contribution. It’s a fact — they don’t. Broad programmatic optimizations guide the national budget, eventually steering most, if not all, marketing dollars towards DMA’s with the largest population or areas that generate the most clicks, conversions, or other key performance indicators.

In addition to national or regional fund contributions, franchisees are required to spend on their own local marketing. This is fraught with brand compliance, cost efficiency, data, and optimization issues. Plus, without the national buying power of the brand or corporate guidance, individual franchisee campaigns suffer and, more often than not, don’t break even on ROI.

When these scenarios unfold, resentment occurs. Trust between franchisees and franchisors begins to erode. Some franchisees go rogue. Others rightfully remain frustrated that their ad dollars aren't working for their store with the same sophistication as national advertising, while also not allowing them to locally customize their campaigns. Franchisees with higher gross sales want to measurably know their larger marketing fund contributions are benefiting their locations, not unfairly helping others. The good news? This doesn’t have to be the case.

Creating an Ideal Experience for Franchisees and Consumers Alike

National or regional digital advertising campaigns can, and should, be executed with isolated budgets equal to individual location contributions. Franchisees want the ability to locally optimize their ads to create a more relevant and compelling message for their custom local audiences. Multichannel execution is a must. Facebook, Instagram, Google, Amazon.com, YouTube and other platforms should be leveraged by every location without concern for minimum budget thresholds. Individual locations deserve access to location-specific reports, giving them a peek behind the curtain into marketing results for their business.

From a consumer perspective, this parent-and-child marketing setup enables the most locally relevant and targeted message to be sent at the right time, in the right channel, with the right offering. This is what builds brand equity and turns local retail customers into lifelong brand advocates.

The Solution: A New Breed of Multilocation Marketing SaaS Platforms

For a hyperlocal digital marketing program to be feasible cost-wise and operationally, by an in-house team or outside agency, it needs to be powered by technology. Successful brands are now utilizing enterprise multilocation Software as a Service (SaaS) marketing automation platforms to win back the trust of their franchisees by bringing big-brand digital marketing capabilities to their smaller-budget locations in a unified way. To be able to execute this while allowing franchisees to maintain their marketing freedom and contribute expertise in their community creates a whole new reality for retail franchises.

Build Trust While Also Building the Brand

As a franchisor or marketing team, you can now empower local owners or franchisees to be fully invested in their local marketing campaigns by giving them access to individual budgets, reporting, locally relevant creative, and content customization options, and the ability to drive ROI to their locations commensurate to their individual marketing fund contributions. Individuals can leverage the spending power of the national brand and benefit from cutting-edge marketing technology, simply and cost effectively. The curtain can be lifted and transparency restored. Results can be improved. Every location can be more successful and help build the brand from the community up. Trust can be rebuilt among franchisors and franchisees. What was once a distant dream for many retail brands and franchise marketers has now become a reality.

Jeffrey Lentz is president and CEO of Elevated Franchise Marketing, which provides consulting and marketing services to franchisees, franchisors, and franchise suppliers.