What’s at the heart of territory mapping?
Graham Barlow, Managing Director of Tech4T, explains why customer targeting must be at the heart of your territory network.
When setting up a franchise you need something tangible to sell to each franchise owner. The successful business model you have developed is obviously a key element, but equally important are the areas – territories or store catchments – in which the new franchise owners will be operating. If their operating areas do not contain sufficient good sales prospects, business development will be a struggle. Additionally, recruitment of franchise owners becomes more problematical if the sales potential in their area is not clearly set out.
Firstly, you need to think about what your typical customers look like – not their appearance, unless you are selling a range of extreme size clothing – but their ‘profiles’. Customer profiling, in essence, refers to identifying the characteristics that differentiate your customers from people who are unlikely to ever buy your product or have need of your service. Profiling can go deeper, differentiating your best and most loyal customers from the rest – identifying the characteristics of people, who buy more frequently, place higher value orders and are open to other offers. Not all customers are ideal – some might even cost you money – therefore it is crucial to really understand your best customer profiles.
For instance, you may be targeting females aged between 18 and 55 for a new health product, but as this is quite expensive you need to find those women who also have a higher disposable income. If you are selling business services, your ideal target could be companies with up to 250 employees and a specific turnover. Or perhaps you need to target well-off families with school- age children or lower income homeowners likely to do their own house maintenance.
Whatever the profile types, you also need to know where to find dense concentrations of those people or companies. To help here, there are many consumer demographic profiling databases such as Sonar, Acorn, Mosaic and Cameo, plus of course the Census data. For businesses, compiled databases and specialist lists will identify the best areas to target. Most of these databases use a postal system, such as the UK postcodes, to link profile statistics and counts to specific areas; in turn, these areas form the geographic building blocks to create territories or define catchment areas.
Sometimes franchisors have done sterling work to define customer profiles but find it difficult to determine just how many prospects with the right profiles need to be contained within a territory. This is at the heart of every territory development and mapping project, and needs to be decided prior to planning a territory structure.
Considerations that often get overlooked include the level of planned marketing by you and the franchise owner, likely conversion rates, the dynamism of the franchise owner, the level of competition and realistic income projections. The other vital factor to take into account is the road infrastructure to ensure minimum drive times between franchise owner and customers.