Multi-Unit Franchisee Magazine Issue III, 2011 | Page 72

CustomersCount
BY JACK MACKEY

Take Action—and Measure It!
Benchmarking key performance areas drives profitability

H

ow am I doing?”
That’s a great question! In
fact, none of us can get better without knowing how we
are doing in key performance areas. For
multi-unit franchisees, who are “managers of managers,” it is crucial to focus your
teams on the vital few things that matter
most and are under the control of your
managers. Reporting these key metrics gets
people to pay attention to what’s important.
Done correctly, measurements answer the
question for each store manager: “How
am I doing?”
Measurement is more than
information

An inspiring example comes from Broadbase, Inc., which operates 34 locations and
was named “Operator of the Year” at the
2010 Jiffy Lube International franchise
convention. Broadbase CEO Don Fowler
says his company’s remarkable sales growth,
from $12 million to $31 million over the
past three years, comes in part from highly
motivating performance reporting systems.
At the Multi-Unit Franchising Conference in April, John Platt, CFO of Broadbase, put it this way: “The old saying is that
you can’t manage what you can’t measure.
And you sure can’t improve what you don’t
measure. That’s why we track and report
sales, transaction counts, and profitability.”
Reporting on these numbers—and especially the trends on these key metrics—is
a powerful way to improve performance
where it is vital to your success as a multiunit franchisee.
One of the surest ways to accelerate
improvement is to report key metrics
more quickly—to shorten the feedback
loop from action/effort to results. Realtime reporting is ideal. Daily reporting is
a minimum. Each day your unit managers start working, they should know how
they performed yesterday. They should
know where they are week-to-date and
year-to-date.
Platt also believes in the power of benchmarking to foster competition among
unit operators. Every day he deliberately

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Multi-Unit Franchisee Is s ue III, 2011

reports every store manager’s results to
all store managers and the entire system.
“When you see that you are number 34
out of our 34 stores, that will drive you
crazy if you have any kind of competitive
spirit,” he says. In fact, for every manager
who is not in the top 50 percent—who is
not above average—that daily reporting is
painful. And it stays painful until the situation changes. This type of benchmarking
is a powerful management tool for multiunit franchisees to motivate managers to
perform better where it matters most.

When you can
generate healthy
competition to
deliver on service
standards,
you’ll get the
kind of concrete
operational
improvement
that drives sales,
transaction counts,
and profitability.
Of course, it’s not easy to improve sales,
transaction counts, and profitability. After
all, those numbers cannot be directly improved. They are outcomes of other actions.
To manage better, focus on
better metrics

What are those actions that drive sales,
transaction counts, and profitability? If
you can go that one level deeper, you can
focus your unit managers on better metrics.
Better metrics are more clearly actionable
by the store manager and employees. For
multi-unit franchisees who are managing
unit managers, these “one level deeper”
metrics are most heavily focused on operations and customer satisfaction.
For example, in the automotive after-

market business, there are service standards
that apply to customers. For example,
there may be system-wide standards such
as: