Sustaining Business: Franchisees rely on special customer loyalty programs to drive repeat business

Ask any small business owner in the country how important customer retention and loyalty are and they'll tell you they rank right up top of the list of business priorities. It's no different in franchising.

Take Joe Malisweski. He's the area developer for Friendly Computers in the New Jersey and Las Vegas markets. There are currently seven units in his system and he personally oversees one in Las Vegas and another in New Jersey.

"Our business is customer service-oriented from the start," he says. "It's our job to get problems fixed for our customers and we hire the best technicians we can find to do the job right." That seems reasonable, but Malisweski is not content to merely provide good service. That's why Friendly Computers, and many other franchises, have developed customer loyalty programs.

At Friendly Computers, the process begins with a simple customer referral program. "After our techs make a service call, they ask the customers about their level of satisfaction with the service," says Malisweski . "When they're done collecting that data they provide these customers with business cards that offer 10 percent discounts on a first service call. These customers then hand these out to their friends." And for each card redeemed, the existing customer gets a $5 credit towards his next service call. Everybody, including Friendly Computers, wins.

Free software has been another great customer loyalty tool for Malisweski's stores. They distribute a software program called Purple Dude. Once loaded onto the computer, the software allows parents to gather information about their kids' online activities through screenshots taken at specified time intervals and provides the ability to track keystrokes to identify programs accessed, Web sites visited, and passwords used. It's all stored in a hidden, encrypted log file that can be automatically forwarded to the parents' email address. Parents love the program, says Malisweski.

But that's not all. For families with smaller children, the franchise now provides the Shrek Internet Browser for Kids. The browser allows children to only access websites that are pre-approved or that have been manually added by their parents.

Malisweski says Friendly Computers has become renowned for promoting child Internet safety for its customers and, as a result, has built strong customer loyalty.

As Malisweski's stores go about their daily business, they all collect customer email addresses for a chance to win a laptop computer during monthly drawings. Of course, the resulting email database is then used to regularly send emails with helpful computer advice and tips. And, of course, keep the Friendly Computers name in front of the customers.

Elsewhere in the Hudson Valley area of New York, Gold's Gym franchise owner Dave Kenyon is pumping up customer retention rates through an exclusive annual contest.

"Each January, as people begin their New Year's resolutions, we launch the Gold's Gym Challenge," he says.

The program is aimed at attracting new members and building customer loyalty with existing ones. The Gold's Gym challenge is a 13-week body transformation competition. Winners from various communities go on to face those from other Gold's Gym communities around the country. National winners are announced and cash prizes awarded.

"It's really an exciting way for us to build new business and encourage existing members to stay active," he says. But more importantly, he says, the program is a great way for existing members to see that they can achieve their health and fitness goals. This often leads to increased use of the facilities and demand for personal trainers which, in turn, builds even more revenue for the franchise.

"During the contest, we'll offer special personal training classes and various other specials for those who want to seek the challenge." Kenyon says that this year alone, during the first quarter, his three Gold's Gym locations generated more than $113,000 in personal training-related revenue. And, obviously, the more active and engaged the fitness-seekers become in their quests for better health, the longer they are likely to remain a paying member.

Kenyon says that before and after photographs of the contestants are later used as powerful testimonial tools in marketing and advertising campaigns for the gyms.

Both Kenyon and Malisweski agree that their franchise businesses have grown significantly as a result of customer loyalty programs. No question about it, consistent customer service coupled with special perks builds loyal customers.