ADVICE Who’s there?


Identify and measure your franchisees’ target market: Stuart Lee gives his guide on how to hone in on territories, identify the audience and quantify the market size each franchisee covers


A


s franchisors, you will often judge franchisees in terms of what they achieve turnover-wise. But what if they are limited by the amount


of available target market without you even realising? The terms ‘target market’ or ‘a typical customer’ are used to explain who your service or product attracts. Some target markets are very specific whilst others are quite broad. The important step, often neglected by businesses, is the formal identification of these people or businesses and measuring how many there actually are. Let’s first imagine you have awarded a territory of 100,000 households.


The basics – identify customer traits and accessible data sources


Firstly start with the basics, what easily identifiable characteristics describe your typical customer? Are they within a certain age bracket, do they live in a particular type of house, how wealthy are they, etc? Next, what data sources are best suited to identify and quantify these people? The census is a great source of this information with an extensive list of demographics. Lastly, what level of geography does the data need to be broken down to in order to understand a


franchisee’s local market? The postcode sector (eg PE2 8, PE2 7) or postcode district (eg PE2, PE3) are very useful levels of geography and used in many territory allocations.


“


Get into the nitty- gritty of who really uses your services or buys your products


”


Using this information, you should now be able to see some variation in the size of the commercial opportunity within each of your territories or across your existing trade areas. So now, instead of seeing simply a territory of 100,000 households, we see a territory containing 80,000 people aged 18 to 44 and 47,000 detached or semi- detached households.


Operational logic – third-party business or location requirements Perhaps there are other factors that influence your franchisees’ ability to provide their service or product. Is the location of competition important or are there


particular premises that must be present such as a swimming pool, school, shopping centre or business park? Sources such as Ordnance Survey GB or


reliable B2B list providers are a great source of information on businesses or building type locations. Identifying where these are located can provide great operational insight into an area. It could be that a franchisee has an okay level of potential customers but is lacking in these vital businesses and premises.


Our example territory is now understood to also contain 27 primary schools, a business park with 73 businesses, three swimming pools and a retail-heavy high street.


Think even deeper – socio-economics: accurate measurements of your target market


Socio-economic data classifies the households in the UK by the average life- stage of the occupants, their wealth and any further traits that are common across similar households such as the number of cars owned or typical occupation. Armed with this more intricate data, you can break down the age or wealth categories you identified in ‘the basics’ and get into the nitty-gritty of who really uses your services or buys your products. This sort of information is retrieved by analysing your existing customer data so you can be assured that the figures being represented are accurate portrayals of your typical customer.


The final piece of the puzzle is that there


are 12,400 households within your core target socio-economic segments. When reviewing the potential of an area or the performance of a franchisee, you are now able to think more realistically about the actual opportunity. Perhaps some ‘under-performing’ franchisees are actually working incredibly hard and capturing a great amount of market share in their area? With the right research and data sources


there is a wealth of intelligence to help with franchise development, business planning, marketing and territory design to help your franchisees go from strength to strength. n


Stuart Lee is Sales and Marketing Director at Atlas Mapping and oversees all of the projects at the company.


Franchisor News | 25


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