By Scott Sharon, CEO, START Digital.
One of the fundamentals of providing great service to your customers is to get to know them well. You have to understand their needs as well as how they operate. I'm sure most of you have heard this many times and many of you business owners practice it well. However, I want to share with you some examples where this basic rule was not followed and the problems it caused. Although I've seen these problems many times in several markets, I will limit my comments in this post to the market I know best -- the quick serve restaurant market — and the product I know best — digital menu boards.
Most of the digital menu board suppliers are new to menu boards. When the industry started switching from the old-style menu boards to digital, most of the digital suppliers came from the audio-video industry. Many are also new to the QSR market, where most of the chains are franchise systems and don't fully understand how franchise systems work.
I'm always surprised at how many of the suppliers think if they sell their system to a 10,000-site chain they will receive an order for all 10,000 sites. That's almost always not the case. Most franchised chains are about 20 percent corporate-owned and 80 percent franchisee-owned. In most cases, the corporation cannot force the franchisees to purchase what they purchase, when they do.
Some suppliers still think they can get into the system by selling to a franchisee. In most chains, this can be the kiss of death. Corporate understandably wants to control something like a digital menu board system to make sure they end up with the same system at all sites. Therefore, suppliers trying to sell to franchisees without corporate approval immediately become an enemy of corporate.
In a typical example, when an order is placed it's usually just for the 20 percent of the sites that are corporate-owned and maybe 10 percent of the top franchisees. Many times it can take several years to sell to the remainder of the franchisees, and the supplier has to sell to them one at a time. Many suppliers are not set up to do this, and they may have trouble handling new sites as they are opened.
Another problem I have seen in a recent rollout of a digital menu board system is the supplier assumed their system would be installed at all sites. They sold a standard system consisting of four 46-inch displays, but the standard system could not be installed at all sites because some did not have the physical space for them. Some could use only two or three of the displays. Also, many of the franchisees wanted something different than what the corporate people ordered. The supplier was certainly not prepared for this, so they had some severe problems.
Another problem is the assumption by the supplier that all franchise chains are the same. This is certainly not the case. The control franchisors have over their franchisees ranges from very tight to very little. The chains also can be set up to operate very differently from each other. You can imagine the problems a supplier would have if they sold a standard system for the entire chain and many of the franchisees ordered something different.
We all must learn as much as we can about our customers when we design something for them. It's also very important for the customer to share this information if they want the best from their supplier. This may be difficult at times because the customer may assume the supplier knows all they need to know, or the people with whom the supplier deals may not know or understand all the important considerations.