Are you looking for ways to differentiate your agency? Have you considered expanding your agency’s offering with proprietary technology? Today’s guest markets to franchise systems and offers a platform built for their specific marketing needs. It’s a great way to cater to clients’ specific pain points while increasing his agency’s value. He details the unique challenges and opportunities of marketing for franchise systems, the strategic decisions behind developing proprietary technology to better serve clients, and the challenge of getting most clients to adopt this solution.

Alex Porter is the CEO of Location3, a partner agency for multi-unit brands and franchise systems. His agency has been delivering enterprise strategy with local activation for clients and helped them drive digital transformation since 1999. Tune in to gain valuable perspective on growing and scaling your agency and learning how having their own platform has helped them differentiate from the competition.

In this episode, we’ll discuss:

Finding their perfect niche.
Marketing to franchises.
Offering a dedicated platform for franchisees.

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Why Franchises was the Perfect Niche for This Agency

25 years ago, Alex was ready to go back to college for a PhD in Sports Psychology when he ran to an old buddy who told him the internet was going to be the next big thing. He offered him a job at his startup where he could learn about internet marketing. The appeal of getting very early into something like that was exciting, so he changed his plans and followed his friend and began his career in marketing.

About five years ago, after working for Location3 for many years, Alex and the team decided the agency would focus on the franchise space after one of their biggest clients went out of business. This event led the company to reevaluate their purpose and strengths. They realized they had a strong track record of working with franchise brands and enjoyed the relationships they had built in that industry.

One of the key insights looking into this space was that there were very few agencies specifically catering to franchises. This presented an opportunity for them to differentiate themselves and provide targeted solutions to franchise systems and their individual franchisees.

What It’s Like to Work With Franchises

The success of franchise marketing lies in the mindset of innovation. Alex and the team not only understand the business of their franchise clients but also focus on driving revenue. They constantly test new tactics and ensure that each dollar is spent efficiently.

However, franchise marketing also presents unique challenges, particularly in navigating the corporate versus individual franchisee relationship. Location3 primarily starts at the franchisor level, as they are responsible for assisting their franchisees in their marketing efforts. This why they first take the time to understand how this particular relationship works from a funding perspective in each case and aim to become the franchisors preferred vendor that they will then recommend to franchisees.

In terms of engaging with franchisees, most franchise systems have annual conferences to discuss operations, finance, and marketing. Location3 typically attends these conferences and provide education on new marketing strategies and showcase data-driven results. Throughout the year, they continue to engage franchisees with webinars and information to keep them updated on the ever-changing digital marketing landscape.

Bridging the Tech Gap for Franchise Marketing with Their Own Technology Solution

Franchise marketing is unique in that each franchisee acts as their own Chief Marketing Officer (CMO). The success of their marketing efforts directly impacts their individual lives, making it a highly invested interest for them. Location3 recognized this and developed its own platform called Local Act, which allows franchisees to understand and optimize their local digital marketing efforts.

Through Local Act, franchisees can track metrics such as website traffic, reviews, phone calls, and conversions. They can also analyze the effectiveness of their local marketing campaigns and make data-driven decisions to drive customer acquisition and revenue. The response has been very rewarding.

According to Alex, the decision to build the platform was primarily driven by client demand. Location3 saw there was no existing solution in the marketplace that met their clients' needs. The franchisees wanted their information platformed, and instead of building an Excel dashboard, they saw the value of hosting that data. Additionally, they believed that incorporating technology into their business would increase their company's value and enable them to transition from a services-based business to a technology-enabled services business.

Implementing this technology-enabled service required hiring various roles within their software engineering department, including a database person, a UI (user interface) designer, a project manager, and data analysts and data scientists to help understand and incorporate AI and machine learning findings into their data analysis.

Despite the company's belief in their tool for franchisees to drive customer acquisition at a reasonable cost, the adoption rate has not reached its full potential. This may stem from the fact that some franchisees still rely on traditional marketing methods like direct mail and is something Alex will continue to address moving forward.

Growth Plans: Calculated M&A Pursuits

In terms of growth strategies, Alex is considering the possibility of acquisitions. By acquiring companies that are similar to them but lack the technology platform, Location3 can seamlessly integrate them, further enhancing their services. Additionally, they plan to invest more in sales and marketing to attract more brands and establish more touchpoints with senior leaders in franchise systems. In this sense, they hope to attract more franchise systems with more than 50 locations, with strong management teams, and willing to invest in technology.

As to how they continue to add value for customers, they’ve implemented digital recruitment. Recognizing the hiring challenges faced by their clients, they developed hyperlocal campaigns across search, social media, and retargeting to directly reach potential candidates. This approach allows clients to connect with qualified candidates on a one-to-one basis, rather than relying on expensive job platforms where resumes are sent to multiple competitors. By targeting candidates directly, Location3 has been able to reduce the cost per recruit and successfully fill open positions for their clients.

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