May 17, 2017
This marks the last official call for Ziweto’s Social Sector Franchise Living Case Study! In this call, Victor brings Lori and Bill up to speed on Ziweto’s most recent progress as we revisit critical issues once again.
Critical Issue #1: Unit Sales and Profitability
After the last conversation with Lori, Victor has committed to focusing on the top line, and has developed five distinct strategies to increase sales. He outlined them in the call as follows:
1. Product diversification: This has been a key component of Critical Issue #1 from the beginning. While his immunization products are fast moving, by including feed, feed supplements, and supply equipment will help to reach more customers more of the time. By offering a greater variety of products, Victor can “cast a wider net” for his customers, and become the go-to shop for anything and everything related to livestock and farming.
2. Customer engagement: Victor has identified key influencers in the area that can work in conjunction with Ziweto’s lead farmers to reach a wider array of customers. These influencers are veterinary officers in the community, and he is working on new ways actively engage them to help drive sales. If Ziweto has a good relationship with these veterinary officers, they can make recommendations to the farmers to use Ziweto’s products and come buy from their stores.
3. Farmer groups: Engage with coalitions of farmers to reach more customers at once — by working within these networks present the model to larger groups, he can disseminate information quickly and offer services and incentives to get them to become committed customers.
4. Advertising: As we discussed before, radio station advertising is an effective way to reach the farmers. Currently, they are searching for radio stations with wider coverage areas. Additionally, he is considering potential partnerships with mobile service providers. This is an ambitious strategy, but it is possible to use the mobile platforms to push messages to his target market.
5. Digitalization: Victor is still looking for a computer tracking system. Currently, the manual system is tedious and doesn’t lend itself to analysis. With a digitalized tracking system, he can capture sales and customer data to better track the outcomes of these strategies and initiatives.
While she applauds Victor’s organization, Lori wants to know if these strategies are ranked by priority. She emphasizes the importance of knowing the “main thing” — what is the top priority — and making sure it is communicated clearly, up and down the value chain. Victor agrees — and says that this month, the focus is customer engagement.
While these strategies are all important, another key factor to focus on is the sales and marketing aptitude of the franchisees. Victor recognizes the need to continue building their capacity, and provide training opportunities for the owners. They originally received one-off sales training, but Victor now sees the need to match each franchisee to a seasoned sales and marketing person, to work consistently on increasing their skills. Lori agrees, and says that this is a universal challenge for franchisors. People are generally skittish during the sales process, and it takes a lot of practice to get over the initial intimidation of sales and marketing. Training once will never solve that problem, it takes practice with constant reinforcement and engagement. Lori suggests going out on sales calls with the franchisees to make sure they are comfortable while they are learning.
Victor agrees, and also mentioned that he didn’t realize some of the struggles that the franchisees face with regards to constrained resources. He expected that there would be more engagement between the franchisee and the lead farmers, but when conducting site visits last week, he realized that the owner, as the only real employee, doesn’t have the time to do anything besides stay in the shop and attend to customers. Since the franchise owners don’t see what the lead farmers are doing on the ground, they may be missing some opportunities to build relationships and better serve the customers. By building these relationships with the lead farmers and the veterinary officer “influencers”, this will help to drive sales as well.
Critical Issue #2: Capital and Expansion
Victor wanted to update us on supplier contracts — so far, he has officially completed exclusive contracts with 2 out of 3 suppliers, and is simply waiting on a signature for the third. They received initial shipments of some vaccine products, which seem to be fast-moving offerings so far. This brings Victor to his next question — the company-owned shops are growing so quickly, but the franchise-owned shops are somewhat stalled. How does Ziweto continue to balance their focus and expectations between the franchises and the company-owned shops?
Lori points out that the company shops have leadership on hand — the employees are motivated by the proximity of the leadership, which is lacking for the franchisees. The franchisees are considered “infants” in the industry, and need a great deal more attention. Additionally, the franchisees and company stores have different customer bases to a certain extent, meaning that the approaches are different as well. To help the franchisees build on their success, they may need a bit more handholding than originally expected. The balance will come with time. Lori urges Victor to consider the pace, timing, and frequency of training delivery — as well as engage the franchisees to find out what is holding them back. In this process, it might be a good idea to bring the franchisees together for some team building and training sessions — get everyone excited about Ziweto again.
On a similar topic, Victor has offers from established business people who are interested in setting up a Ziweto franchise. Ziweto’s mission is to “raise the value of livestock for better lives”, but Victor’s intent is to mobilize young people to reach underserved communities by running these social enterprises. The “young people” aspect is important to Victor, as he wants to create opportunities for educated youth to flourish in Malawi. However, the model is tricky — for each of these franchisees, Victor must raise the capital to run the shops until they become profitable — which they haven’t yet. The offers are coming from people who have experience running these types of stores, and are better capitalized. At what point does Ziweto stray from their original intent and just sell a franchise to anyone who is interested?
Lori mentions that, while it is important to stay true to the business model, there may be room to have a mixture of both. The fact that older people who are already in business see Ziweto as a valuable investment is a fabulous position to be in. So, is there an opportunity to stay true to the mission while taking advantage of these offers? Lori urges Victor to think about what the worst-case scenarios and best-case scenarios might be, and weigh the possibilities. (Also, read through the Jibu case study blog to learn now they handled a similar circumstance of managing a “dual mission” in terms of franchisee selection criteria!).
Lori emphasizes how important it is to stay focused on the revenue, and keep learning and asking questions. It’s been amazing to follow Victor on this journey, and to see Ziweto transform. Victor’s constant innovation and improvement is truly inspiring. We can’t wait to catch up later and see what happens next! (We hope to have a video update from Victor later this year).
To read the previous blog entry, click here.