One of the reasons that local entrepreneurs buy franchises is to benefit from the national marketing presence created by the franchisor. When it comes to leveraging those brand values to do the important business of recruiting and retaining customers, however, franchisees don’t often cash in on the full value of their investment. They are simply too busy with all the aspects of their operations to serve as competent marketing managers.
“They’re the accountant one day, the purchasing director the next, and the marketer the day after that,” says Brant Schmitz, online marketing director for Snap Fitness, a worldwide chain of 1,400 health clubs. “They don’t have a lot of time to decide what to do with their marketing, so you have to make it simple for them and easy to use.”
The bulk of Snap’s clubs are franchised and operated by local businesspeople who are not marketers by training, but who use their own marketing dollars to promote their clubs. Until last year Snap provided them with several vendors to choose from that provide turnkey services for such channels as email and direct mail, but usage levels chain-wide failed to reach hoped-for levels set by corporate. With the goal of increasing franchisee adoption of company-designed marketing services, as well as expanding their reach in online channels, Snap last year brought in Balihoo, a local marketing platform provider, to unify its program.
“Our franchisees don’t buy a business because they love marketing. We decided we had to streamline the system for them,” Schmitz says. “Where we once had three or four vendors they’d have to deal with, we now have a vendor-agnostic system plugged into the back end of Ballhoo.”
While all businesses depend on fresh leads, fitness clubs need to keep fresh blood flowing at a frenetic pace. The majority of Snap members sign up on a monthly renewal basis, and a high percentage falls off the workout bandwagon within six months. “There’s a lot of attrition,” Schmitz says. “You need to sign up more than you’re losing.”
Besides giving franchisees a single platform from which to run all of their marketing activities, the new system opened them up to new channels and techniques that helped them address their aggressive conversion goals. Only the most progressive of Snap affiliates had been using pay-per-click search ads before 2012, but the Balihoo platform presented a simple and inexpensive PPC option that caused many more to join in.
“For our national marketing campaign, PPC is easy to set up. It’s not so easy in hyper-local markets, like a three-mile radius around a club,” Schmitz says. “The average franchisee doesn’t have the expertise to do this and so is not even going to attempt it, but Balihoo set up an easy-to-use local system for them and they’re using it.”
To get involved in Snap’s local PPC program, franchisees do is the same thing they do for any other marketing effort activated from the new platform: make a selection and enter parameters and a budget. For paid search, some monthly franchisee budgets were as low as $200. The platform shows franchisees results of what their marketing dollars bought them in terms of clicks and conversions, and the numbers for 2012 have been impressive enough to increase that $200 allocation at many clubs. Those who used PPC averaged 13 conversions a month through the channel, and their cost per conversion was 30% lower than the national average for the chain, according to Schmitz.
While email marketing had been a mainstay for Snap affiliates, the new system allows them to pick up the game with automated triggered messaging. This allows franchisees to address the other side of the membership coin: retention.
“We were acquisition-focused in designing this platform, but then it dawned on us we didn’t have a retention strategy. Triggered emails were an easy answer,” says Andrew Piron, VP of client services for Balihoo. “Luckily, Snap has a fob-based entry program, so they have a lot of data on member attendance. We did pilot programs at every single location and found that you could predict the length of a membership based on how often a new member came in during the first six weeks.”
Needless to say, it became a priority among Snap franchisees to keep up a steady email dialog with new members during that crucial month and a half. They were presented with a menu of email themes—get a free training session, a free tanning session, bring a guest—that they could program into their email campaigns automatically, along with standard fare such as “Happy Birthday” messages. Franchisees who started to catch the marketing bug could also create their own emails and add them to the plan.
“When we went into this, we decided that we wanted to introduce some marketing automation into the affiliate marketing program,” Schmitz says. “Now a franchisee can go in and customize his email campaign once and they automatically get sent when it’s relevant.”
While Snap could share not metrics on retention rates resulting from the program, Balihoo acknowledged that nearly 100% of affiliates were making use of the email features. Entrepreneurs were morphing into digital marketers.
