DWC Home | Magazine | Back Issues | Noveber 2006 | Managing For Money

Business Model
Franchises and chains are grabbing a huge share of the market. Here's how you can compete...and win!

by Steven C. Bursten

Editor’s note: This is the second installment in Steve Bursten’s look at franchising in the window coverings industry and how it affects other businesses. The first part can be found at D&WC, October 2006.

Franchises and chains are grabbing a huge foothold in window coverings—just as they have in most industries from restaurants to maid services and from flooring to furniture. A lot of folks thought it couldn’t happen in our business. Too specialized, we thought. Takes too much skill to franchise. Well, that idea became obsolete back in the 1970s when I franchised Aero Drapery and soon morphed it into Decorating Den Systems, Inc. (I sold the business years ago and now it is Interiors by Decorating Den, a full-service design and decorating business—see D&WC, May 2006, page 34.)

In recent years we have seen a dozen window coverings franchises burst on the scene. And, now, there are at least two full-service decorating franchises. Franchising is a serious competitive fact today and will be stronger tomorrow.

Last month I wrote about this trend. I shared a chart comparing investment, fees and territories. That article was the “what” and “who.” This month, I will tell you the “why”—why your customer is buying from franchises, why franchises are winning more sales, and how you can compete as a professional.

WHY CUSTOMERS LIKE FRANCHISES
Customers like window coverings franchises for the same reasons they like franchises in hotels, restaurants, inspection services, carpet cleaning and hundreds of other businesses in America: consistency and dependability. At their best, franchises bring the confidence of a national name and the initiative of a local owner. Franchises assure the public of a well-trained representative with a reputation for high standards.

Millions of homeowners move to new communities every year. They are uncertain about whom to call. A familiar name makes the decision easier. Millions more want to replace their window coverings. Chances are, the person they bought from 10 years ago isn’t in business any more. At least, the homeowner assumes so because they never heard from the dealer again.

If Barbara Bailey, a homeowner in Kingsport, TN, has a friend, Julia Jackson, in San Diego, CA, and Julia buys window coverings from Budget Blinds and likes the service—maybe even sends an e-mail to Barbara with a photo image of her new shutters—who will Barbara call when she needs window coverings? In Kingsport there may be another company, Fashion Blinds and Windows, that has great pricing and service. But, is Barbara aware of this company and its reputation? Chances are, Barbara will trust her friend’s experience and the national magazine ad she glanced at last month. Her call to Budget Blinds may be the only dealer she shops, thanks to its national name and image.

DEALERS THINK BACKWARDS FROM CUSTOMERS
Independent dealers often want things that are the exact opposite of what their customers want. Dealers don’t like the idea of franchising. It means sharing territory. Most dealers want all the territory. The problem is, customers want to see lots of stores in the same territory and buy from the nearest to them.

This concept works great for Starbucks, McDonald’s and Subway. It works the same for window coverings franchises. It is better to share 10 percent of market sales with five other stores than to have one percent of the market on your own. In fact, it is twice as good.

AWARENESS IS THE MOST IMPORTANT KEY IN MARKETING
Awareness is increased with multiple stores or multiple vans with attention-demanding signage, or wrap. As we teach in every sales and marketing class at Window Coverings University, awareness means customers know your name . . . know the products you sell and the services you offer . . . and that potential customers consider you when they are ready to buy.

If a customer is not aware of your name and products, how can they consider calling you?

Awareness is the beginning for creating appointments. Most independent businesses feel they don’t have control over appointments—no control over where the customer comes from geographically or the quality of the customer who may call. But, this is not true. It is one of the first lessons a franchisee learns—you can control your customers to a large degree.

My partner, Steve Wishnow, is a leading authority on how to affordably create awareness with the right customers. Yes, I am biased for professional marketing. You should know I am an owner in Window Coverings University and in Exciting Windows!, a licensed brand of shop-at-home service.

DEALERS TREASURE FREEDOM, INDEPENDENCE, CONTROL
Independent dealers treasure control. You give up some control with a franchise. Probably, if you wanted a boss to tell you what to do, you would have gone to work as an employee. Example: Bill runs a shop-at-home window coverings business. Bill has the freedom to lavish extra care on customers. Bill has the authority to reduce the retail price to meet market conditions. Bill has freedom from paper work and controls. So, what are the good and bad in that?

Receiving great service from Bill is in the customer’s interest. Meeting low competitive pricing is in the customer’s interest. But, when Bill suffers low margins and reduced income because he doesn’t have the training to sell at higher prices, and Bill doesn’t do monthly paperwork to track advertising and sales productivity, then Bill may be earning a lot less than his potential.

In fact, a franchise owner who pays $30,000 a year in royalties may earn more net profit than Bill!

HOW TO WIN AS AN INDEPENDENT
Use franchising as a model.

The point is not to say that being a franchise is better than staying independent. The point is to help independent business owners know the truth. Instead of deriding franchises, copy them! Michael Gerber, author of “E-Myth” urges “technicians” who love what they do, to “work on their business, not in the business.” He urges every independent business owner to structure as if he or she were a franchise, to standardize systems and appeal to customers as a professional marketer.

You can do it. Here’s how: Start by segmenting the market. Watch where your competition is strong and where they aren’t. There is a huge, under-served market opportunity few window coverings professionals have discovered. I have written about it before. It’s called the Golden Opportunity market (see D&WC, April 2005, page 56).

GOLDEN OPPORTUNITY MARKET
The Golden Opportunity segment is just above the mass market where price shoppers get multiple estimates and just below the designer market for furniture, flooring and accessories. It is a great market that buys a disproportionate amount of shutters and draperies. No franchises directly serve this market. No franchise specializes in a balanced mix of blinds and draperies unless they also sell furniture and accessories.

If you want to succeed selling against franchises (and independents who did not read this story), then, today, go after the Golden Opportunity market and create some gold for yourself!