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  • Writer's pictureJeffrey Lentz

The Hyperlocal Marketing Problem Every Franchise & Multi-Unit Brand Faces and What Can Be Done

Across the franchise brands I’ve worked at in the Retail, QSR, Fintech, and Automotive industries throughout my marketing career, there is one hot button topic that seems to rise above the rest. Equal opportunity marketing.

Inevitably, when individual unit marketing fund contributions are being aggregated to fund national or regional marketing programs in an attempt to benefit the many or all, some locations will be left behind in terms of their individual ROI. A rising tide may lift all boats, but not equally in the eyes of all franchisees. Ay, there’s the rub.

Marketing executives and franchisors of companies both large and small are all too familiar with this problem and the complaints received from franchisees. As franchisors, I believe we need to do better by those entrepreneurs who have chosen to invest their money and trust in our brands. In this article we’ll dissect the hyperlocal marketing problem and how to solve it.

The Problem: Advertising Funds Are Not Created Equal, Nor Do They Benefit Franchisees Equally

Franchisees typically contribute 2-7% of their gross sales each month to one or more funds: national ad or brand funds, regional co-op funds, and a required local store marketing budget.

The marketing equality problem typically arises when national advertising dollars are being used to fund local geo-targeted digital marketing campaigns around all the locations in a system It’s not a question of whether each location receives brand awareness, sales and an ROI commensurate to their contribution. It’s a fact - they don’t. Instead, broad programmatic optimizations guide the national budget, eventually steering most, if not all, marketing dollars towards geographies that generate the most clicks, conversions, or other key performance indicators. Far too commonly, dollars end up directed to DMA’s with the largest populations even if that’s not where your best customers, prospects or a majority of store locations in a given market exist.

The goal of national ad or brand funds, and regional co-ops to a lesser extent, is to pool advertising dollars together so that franchisees can create a greater impact spending collectively to advertise the brand, versus if each franchisee was to spend their advertising dollars independently.

Many franchisees, in addition to contributing to national or regional funds, are required to spend 3-5% of their sales on local advertising. Despite the benefits this provides franchisees in terms of marketing freedom and being able to leverage their community expertise to gain customers, it’s fraught with brand compliance issues and the inability for corporate marketing teams to make local optimization suggestions to franchisee’s online and social media campaigns. Without the national buying power of the brand, locally budgeted campaigns suffer. More often than not, they don’t break even in terms of ROI.

When these scenarios unfold, resentment arises. Trust between franchisees and franchisors begins to erode. Franchisees with higher gross sales who are required to contribute more toward various funds want to measurably know their contributions are working for their locations, not unfairly benefiting other locations. Corporate often isn’t fully transparent. They’re hesitant to give franchisees a peek behind the marketing curtain in terms of how decisions are being made and how national dollars are impacting every location. The good news is, 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, who know their markets better than corporate, should have the ability to locally optimize their ad campaigns to create a more relevant and compelling message for their custom local audiences. Multi-channel execution across Display, Mobile, Video, Email and Social is a must as Facebook, Instagram, Google, Amazon, YouTube and other channels all need to be leveraged by each and every location without concern for minimum budget threshold requirements. Individual locations also need to have the ability to access location-specific reports and KPIs, giving them full transparency into how their local marketing dollars and contributions are working to drive revenue to their business.

Not only will this benefit franchisees, but it will have a positive impact on the local consumers they serve. The ability to receive locally relevant creative and a targeted message at the right time, on the right channel, with the right product or service that addresses a problem or need, is powerful. This is what builds brand equity and turns local customers into lifelong brand advocates.

The Solution: Technology-Based Software as a Service (SaaS) Marketing Platforms

So a better experience for all parties with more access, flexibility and control sounds great, right? But can it really be done and at what price? For a hyperlocal digital marketing program to be feasible cost-wise and operationally, by an in-house team or outside ad agency, it needs to be powered and automated through technology. One solution is having the ad agency you work with custom build a multi-channel marketing platform in a cost-effective way. The most successful franchise and multi-location brands are now utilizing enterprise multi-location SaaS marketing automation platforms provided by companies like Hyperlocology, and others, to win back the trust of their franchisees by bringing big-brand capabilities to their smaller-budget locations in a unified way.

However, a word of caution. Not all conventional automated marketing platforms provide the same level of value to meet the demanding requirements of diverse stakeholders across every organization. Ensure you’re partnering with a company that will give you a full SaaS model so that you benefit from ongoing product development and a technology stack that is flexible, data compliant, and vendor agnostic. The future of hyperlocal marketing solutions includes a combination of curated local data, strategic inventory partner integrations, and a cutting edge, single-point hyperlocal marketing campaign management platform. As a multi-unit retail brand or franchise, you need the ability to analyze and optimize hundreds and thousands of individually specific local digital marketing campaigns with ease.

Build Trust While Also Building the Brand

As a Franchisor or Marketing Team, we can now empower our local owners or franchisees to be fully invested in making executive decisions on 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 now 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 revealed. Results can be improved. Every location can be more successful and help build the brand from the community up. Wins can be achieved and trust restored among franchisors and franchisees. What was once a distant dream for many brands and franchise marketers, has now become a reality.

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