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Franchisee Advice

Good Customer Service Is About Relating At The Same Level

From making a connection to upselling, the ability to relate to your customer’s needs and preferred way of doing business are vital components of exceptional customer service — and developing loyal clients.

Basil O’Hagan

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I’m a massive believer in the power of personal service. When a staff member interacts with a customer, that’s where the action is. When we’re relating as people, it’s a chance for me to really understand your needs as a customer and to help you on a person-to-person basis. In order to deliver the best personal service, I also need to understand how you like to be served. This is where EQ comes in — emotional intelligence.

The best customer service professionals have great people skills; they can quickly understand what kind of a person someone is, and how to relate to them.

Here are some of the character types you might encounter:

  1. The No-Nonsense Customer. This person knows exactly what they want and they simply want you to help them get it. Ascertain their needs and deliver, quickly and efficiently.
  2. The Browser. This person has a vague idea what they want, but they’re interested in finding out what you offer. They want advice and are keen to discuss their options. Understand what they’re looking for and then advise.
  3. The People Person. This customer simply has to socialise with everyone they meet. They will smile, greet, enquire after someone’s health and generally have a pleasant chat before getting around to discussing what kind of help they require. Here there’s no rush. Just chill and chat, until your customer remembers, “Oh, ja! Here’s what you can help me with!”
  4. The Shrinking Violet. Someone with almost no social skills, and incredibly shy to boot. This customer would rather not have to deal with people, but out of necessity they are forced to. You might have to draw them out a little, but just put them at ease and make the process as painless as possible for them.

Related: Does Your Customer Service Care?

Real talk

Recognising your customer’s personality type and needs is just the beginning though. You now need to speak to them in their language.

Phatic language is the linguistic term for words used to facilitate the flow of conversation. In themselves they are quite meaningless. They’re just social lubrication to help an interaction along.

Phatic language is useful, but it is not real conversation. That happens around it. If you’re going to make a real, person-to-person connection with your customer, you need to get past the phatic conversation as quickly as possible. You need to really connect.

When we connect, we form a human bond that is deeper than a brief encounter, or even a business transaction. So use language that encourages this. Don’t just say, “Need any help?” That’s phatic language. The answer will be a reflexive, “No, thanks, just browsing.” And you haven’t made any connection at all.

Try to ask questions that reveal the customer’s real needs and explain more about why they find themselves dealing with you. “How can I help you?” is a start. But why not think of an opening question more closely related to your business. Let’s say you run the Party City party supplies store. How about opening the conversation with, “What kind of party are we having?” That will propel you right into your customer’s world. They’ll explain how they’re throwing a farewell party for their boss, who’s retiring and they were thinking perhaps something with a New Orleans theme, as he’s a big fan of jazz music.

Pretty soon, you’ll be discussing what kind of guy he is, how many guests there’ll be and throwing around ideas about what kind of an event they’re going to be having. You’ll be connecting.

Get the big picture and sell more

This speaks directly to another golden rule linking customer service to sales: If you get the big picture, you’ll be able to sell more.

Let’s say you run a PostNet branch. It’s a media business. A client comes in asking about the cost of couriering a document to Cape Town from Centurion. You could look up the rate in your book and say ‘98 bucks for counter-to-counter.’ Then go back to your smartphone.

But you won’t do that, because you’re delivering exceptional service. You’re going to ask, “Do you mind if I ask what you need our courier services for?”

The young lady might say that she’s applying for a design job, so she wants to courier her portfolio to Cape Town for a job application. Now that you know her requirements, you can better serve her needs.

Related: What Does Great Customer Service Actually Mean?

You might be able to help her print out her design portfolio on a high-quality printer, bind the pages professionally into an attractive book, and then courier the package safely to her prospective employer in
Cape Town.

This is a type of cross-selling — you are selling the customer extra services. But you’re doing it to help realise her goals. You’re delivering exceptional service, by supplying exactly what she needs.

You can also do a bit of up-selling (selling add-ons or more valuable services) by encouraging her to use overnight door-to-door courier service. That way, her documents will be at the front desk of her next employer by the time they get into work.

You’ll have sold more, but you’ve also added value to your customer, and delivered a superior service.

Own the project

We’re trying to deliver exceptional customer service, to satisfy the customer’s needs. The best way to do that is to personally take ownership of a project.

When we make contact with a customer, we should methodically work through their project, becoming their representative in the process of fulfilling their requirements.

That would work something like this:

  1. Make a connection. Smile, greet them, enquire after their health. Welcome them to your company.
  2. If the customer is uncertain how best to meet their own needs, give them the benefit of your knowledge. Recommend a dish, explain your product offering, describe how the system works.
  3. Agree on a plan of attack. Once the customer knows their options and has chosen one on your advice, agree on what you’re going to do.
  4. Establish their needs. What is the project they are engaged in?
  5. That means you ensure that the job is done. Even if you hand them over to another department, you still monitor the project and ensure it is carried out to the best of your company’s ability. This could mean delivering a hi-fi, taking out an insurance policy or financing a C-class Mercedes.
  6. Follow up, follow through. Check that the customer is happy. Liaise with colleagues on the project. Take up and personally resolve any problems. Check whether things could have been done better.

These are all ways of taking ownership of a customer’s project, whether it’s finding a dress for their three-year-old’s birthday party, a 32G SD card or working out how many Vitality points they have.

Dull Service in Dullstroom

hotel reception desk

Just recently I gave a talk to a group of franchisees at a venue in Dullstroom. I took my wife Ann along because we wanted to stay an extra night. This was the procedure we encountered at the hotel. It was anything but effortless.

I talk about anticipating your customers’ needs. This establishment showed none of that anticipation. It was like they wanted to make it as hard as possible for a guest to extend their stay.

I phoned the hotel but they couldn’t take the booking directly for the extra night as ‘it had to go through head office’.

Related: Zappo’s Customer Service Excellence Comes Down To Company Culture

So I phoned head office and they said that it’s fine, they can accommodate us but only if I could tell them my room number. I didn’t have my room number as I’d not yet checked in. I asked if there was not a way that they could get hold of reception at the hotel and find out the room number for us. No, the lady at head office told me I had to phone the hotel back (this would have been the third call) and then phone her back at head office (fourth call) mentioning the room number and then she could confirm the booking.

Can you believe it? Again, all but effortless service and quite frankly, Ann and I decided not to stay the extra night because if that was our first contact, imagine the rest.

Suffice to say, the rest was not up to standard. When we arrived at reception, there was no one there, not even a bell to ring for service. I had to walk around the hotel to try and find someone. Somebody eventually came along to help, but the damage had been done.

We went from a potentially loyal customer who would recommend this hotel to our friends and colleagues, to unsatisfied customers who would do the exact opposite.

Basil O’Hagan is the founder of both O’Hagan’s and The Brazen Head. Today, he runs Basil O’Hagan Marketing, which serves chains, independent operations and small family businesses, pinpointing and overcoming problems through proven neighbourhood marketing solutions.

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Franchisee Advice

5 Tips For Franchise Agreements

Below are 5 tips to ensure that your franchise agreement complies with the CPA.

Justine Krige

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South Africa has some great homegrown franchises – Mugg and Bean, Steers, Debonairs and Nandos, to name a few.  South Africa is also no stranger to international franchise groups, such as McDonalds, KFC, Wimpy and SPAR, although there has been an increase in the number of international franchises investing in South Africa in recent years.

The Consumer Protection Act, No 68 of 2008 (“CPA“) is the first piece of legislation in South Africa that specifically regulates franchise agreements. The CPA prescribes certain minimum requirements for franchise agreements, as well as certain information that must be disclosed prior to a franchise agreement being signed.  It is important that all franchise agreements comply with the CPA as provisions in franchise agreements may be declared to be void for non-compliance.

Below are 5 tips to ensure that your franchise agreement complies with the CPA:

1. Make sure you meet the minimum requirements

The CPA prescribes “minimum requirements” for franchise agreements.  These requirements, which are set out in the Regulations to the CPA, set out mandatory terms (i.e. terms which must be included) and prohibited terms (i.e. terms which must not be included).  They also prescribe that franchise agreements must be drafted in simple and plain language so as to be easily understood.  Legal jargon must be avoided unless absolutely necessary.

Related: The Perils Of The Franchise Agreement

2. Include prescribed minimum information

The CPA prescribes minimum information that must be included in a franchise agreement.  Most of this minimum prescribed information is fairly general in nature and would be contained in the franchise agreement in the ordinary course (for example, name and description of the types of goods or services that the franchise relates to, the obligations of the franchisor and franchisee, and any territorial rights).

There are, however, certain more unusual requirements in relation to prescribed information, which information would not necessarily be contained in a franchise agreement in the ordinary course (for example, the qualifications of the franchisor’s directors, and details of the members/shareholders of the franchisor).  These more unusual requirements must be kept in mind when preparing a franchise agreement.

3. Prepare a disclosure document

The CPA requires the franchisor to provide certain minimum prescribed information to the franchisee in a disclosure document delivered to the franchisee prior to the signature of the franchise agreement (including a list of current franchisees, if any, and of outlets owned by the franchisor; the direct contact details of the existing franchisees; an organogram depicting the support system in place for franchisees; and an auditors certificate confirming that that the franchisor’s audited annual financial statements are in order).

This information is intended to provide the franchisee with enough information about the franchise, its financial viability and potential business success so as to enable the franchisee to make an informed decision as to whether or not he/she wishes to “acquire” the particular franchise.

4. Prepare a non-disclosure agreement

It is important to ensure the protection of confidential information which may be disclosed to the prospective franchisee during the preliminary stages of negotiating and concluding a franchise agreement.

This may include, for example, the growth of the franchisor’s turnover, and written projections in respect of levels of potential sales, income and profit. Although not a requirement under the CPA, it is advisable for a franchisor to ensure that a prospective franchisee executes an appropriate confidentiality agreement prior to being sent the disclosure document.

Related: What Constitutes a Fair and Balanced Franchise Agreement?

5. Beware the “cooling-off” period

It is important to bear in mind that a franchisee has an entitlement under the CPA to cancel a franchise agreement without cost or penalty within 10 business days after signing such agreement, by giving written notice to the franchisor.

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Franchisee Advice

6 Top Tips For Reading Management Accounts

There is a golden key that reveals the secret of whether your business will survive and thrive. It is keeping tabs on the figures that summarise the strength of your business – your monthly management accounts.

Richard Mukheibir

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There is a golden key that reveals the secret of whether your business will survive and thrive. It is not the brilliance of your business concept. It is not your talent for talking clients to sign on the dotted line. It is keeping tabs on the figures that summarise the strength of your business – your monthly management accounts.

Related: 6 Things You Need To Know About Profit And Cashflow

Many entrepreneurs are usually more interested in operations and find product development or sales much more enjoyable than catching up on accounts. I sympathise – I’m one of them! So if you feel the same way, my top tip is always to make sure that you partner with or employ someone who can oversee the finances for you.

But that does not mean you can let the figure boffins and the finances take care of themselves. To function properly in your business, you need to know the outcome of your sales and development strategies – and the story of that is told in your management accounts.

 If you never look at your management accounts, it is like blinding yourself in one eye. It means you risk being literally blindsided by a big surprise, whether it is heading for a significant loss or being confronted by an unexpected provisional tax payment.

Here is how Engela van Loggerenberg, our Group Financial Manager, puts management accounts in perspective for our new franchisees. She urges them to focus on six key areas:

  1. Priorities: Management accounts can help you pinpoint areas that you need to prioritise, whether to capitalise on growth or because they are not performing as well as you hoped.
  2. Strength: All businesses aim to grow their assets over time and the balance sheet in your management accounts will reflect whether and how you are achieving that.
  3. Control: A strong balance sheet is one that shows you have your business liabilities well controlled. The key marker here is your current liquidity ratio, which results from dividing your current assets by your current liabilities. To keep your business healthy, always aim to keep this ratio at least 2:1.
  4. Revenue: Ideally, you want to see your revenue grow month by month. Check your income statement both for the trend in actual revenue and also for actual against budgeted revenue to check how well your strategies are delivering results.
  5. Profitability: Of course, revenue is not the same as profitability. You need to know your gross profit – the basic figure of your sales less the cost of those goods – and net profit, which also deducts a range of other expenses including taxes. Track the percentage of these two profit figures as well as the actual cash amount they represent to keep a check on whether your costs are creeping up too high.
  6. Finance: Most businesses at some point want to finance their growth by borrowing from a bank. A set of well-regulated management accounts is a prerequisite to obtaining finance.

Your management accounts do not have to be particularly complicated to give you these vital pointers – and if you are figure-shy, the more straightforward the better.

The important thing, though, is that you do not allow yourself to be too scared to ask if there is something which is not clear to you. That is the way to keep control of this key to your business fortunes and to keep building your business from strength to strength.

Related: 7 Things Every Entrepreneur Should Know About Managing Cash In The Business

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Company Posts

A Three-Pronged Approach To Franchise Success

Danie Nel, head of business development for Cash Crusaders franchising, says the brand’s success over the past 22 years 
is attributed to the sentiment that “a profitable franchisee 
is a happy franchisee.”

Nedbank Franchising

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What is your current footprint?

220 Stores. We’re looking to increase that number by another 20 stores for the 2018 financial year, which will then bring us to a total of 240 stores. Depending on the economy, we’re looking to grow our footprint even more to around 300 to 350 stores nationwide in the near future.

What are some of your brand’s biggest achievements that other franchises can learn from?

Our ability to read the retail market and innovate to stay ahead of times. We have recently launched an online platform where customers can sell their goods or borrow money — all online. This was a first for online retailing. One other achievement that I would wish to highlight is the launch of our mobile phone range, Doogee, exclusive to Cash Crusaders. Personally, having the honour of opening our 200th store was a tremendous achievement.

Franchisor involvement has also played a big role in the success of the organisation. Our CEO Sean Stegmann and other senior managers are as much involved in the business as any other operations manager or operator.

There is simply no ‘ivory tower’ management in our business and it makes a huge difference.

Related: How Sorbet Franchisee Kate Holahan Is Nailing Success By Following Her Dream

What are some of the challenges you’ve encountered and how have you overcome these?

Some of our daily challenges include securing a premises at a favourable rental and securing a franchisee with sufficient unencumbered capital, who is credit- worthy. Once the store is open, cash flow management and stock procurement is key.

In addition to this, it’s a challenge to achieve profitability immediately and to meet franchisee expectations. It’s also vital to ensure superb customer service and to retain those customers in the current retail and economic climate. I would say that our single biggest challenge is to retain and to build our customer base.

What attracts franchisees to Cash Crusaders?

Our unique retail model that allows for multiple streams of income through one business. These three profit centres include: New goods (variety of imported quality goods), second-hand goods (which we buy directly from the public, either through customers coming directly to our stores, or via our house-buy system offered by some of our stores) and secured lending (a financial service where customers can borrow money against valuables, determined at store level, and the loan is repaid within 30 days — or the contract is renewed for another 30 days with interest and service fees charged).

Why is it important for successful franchises such as yours to have a strong banking partner and how does it benefit both the franchisor and the franchisee?

Gone are the days where you just got a deposit book or cheque book and a little business loan from your bank. Banking has become more sophisticated and the technology that the bank offers is as important as its service, making life for both the franchisee and the franchisor easier on a day-to-day basis.

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