Customer loyalty and effective payment processing are two of the most important considerations for franchise owners. According to expert Tom Epstein, how a franchise engages with the customer and accepts sales can greatly impact the bottom line. As CEO of Franchise Payments Network (FPN) and Poln8, Epstein and his team assist franchise-based companies with strategic advice and project management relative to electronic payments and loyalty programs. Here, Epstein shares customer retention strategies that can help franchisors improve their overall systems.
What should franchisors know about customer loyalty?
Always stay top of mind! We set up automated messaging from our platform to make sure franchisors don’t lose—and might even gain—a share of the customer’s wallet. Let’s say you’re a men’s hair salon and you know your typical customer comes in every three to four weeks. If at the three-week mark you do not see him, it triggers either a reminder to come in or it waits a week or two and sends some sort of offer to get him to come back (as he likely went to a competitor the last time). You must also communicate with your customers proactively at least once a month and remind them how many points they have toward their next reward or how many dollars they have left on their prepaid account to make sure they keep using your product or service instead of the competitor’s.
What are some best customer retention strategies for franchises?
The most important thing I always tell our clients is to set up programs to reward customers for doing something they are not doing today. By just rewarding current behavior, then you are eroding your existing product profit margins. You want to encourage the customer to come in more often, spend more money, try a new item and tell a friend or family member about your brand. We work with franchisors to figure out what is going to drive business and create the most incremental revenue.
How do you help franchisors?
Many ways. When we streamline and save franchisees money on payment processing, then that helps with retention of franchisees as well as future sales—it’s a perk a franchisee couldn’t have gotten on his own as an independent business owner. Under POLN8, we help the franchisor build sales in the franchisee locations which helps profitability and drives more royalty and marketing dollars back to the franchisor. Additionally, it locks in the customers of all locations into the brand, so franchisors have access should a franchisee leave the system. However, the most important aspects are the data that is collected by the loyalty program. We can report extremely useful data around who the customers are (zip code, age, sex, spending habits, etc….) as well as ROI on any marketing dollars that would be tied to events where loyalty customers are marketed to via email, push notifications, social media and print.
“Payment processing is one of the top four controllable expenses on a franchisee’s P&L.”
What do Franchise Payments Network and Poln8 do?
We offer payment processing services to improve a franchisor’s system. We basically work with franchisors to streamline how franchisees accept payments at the point of sale (POS) and work with each location in the system to help with the franchisor’s endorsement. Payment processing is one of the top four controllable expenses on a franchisee’s P&L. So if we can ensure they get their money on time, and do it cheaper, then we are helping to maximize the bottom line profit on their P&L. We also assist in increasing the franchisee’s top line by increasing sales with our POLN8 loyalty platform. Not only do we turn current customers into real promoters by rewarding them for enlisting their friends and family into the brand, but we also boost sales by 17% on average ticket spend and 50% frequency of visits.
How do Franchise Payments Network and POLN8 work together?
We can deliver a branded app to the customer that allows them to do all the normal things like finding a location, track loyalty points, place online or in-app orders for pick up. Plus, it also allows the customer to pay from the app with a bar code at the point of pick up, or ahead of time inside the app, with a preloaded payment account.