(1888PressRelease)
July 08, 2008 - As summer heats up in the U.S., timing seems perfect for media stories about ice cream – unless it’s a story about the Cold Stone Creamery franchise.
Unfortunately for the company and its existing franchisees, recent media reports have put a negative light on both franchising generally and Cold Stone’s image in particular.
Some of Cold Stone’s problems – high operating costs, disenchanted current and former franchisees – are a seeming result of company culture, and will require fairly substantial organizational change.
Others – namely lower per store revenues, a premium brand in a slow economy and the discounting of a premium product – are more tactical, and from a business coaching standpoint, are controllable from a “bottom-up” or a franchisee perspective.
“From our own perspective as both a franchise and the world’s number one business coaching firm, the most immediate positive impact for Cold Stone is focus on its premium niche without entering a price war,” ActionCOACH Director of Marketing Jodie Shaw said. “Ice cream is a luxury in today’s economy, and the differentiation should be on the ‘indulgence’ factor and overall customer experience.”
From the ActionCOACH perspective, this would also mean ending all discounts (discounting puts pressure on sales volume; a 10% discount means an equivalent 50% rise in volume to maintain profit), and a reduction in the number of non-ice cream related items Cold Stone offers.
Cold Stone can also capitalize on once-per-month visits by creating family-friendly store environments – making one-time family outings true events – visits that up each average dollar sale.
How can individual stores increase visits? Partner with the movie theaters near which many Cold Stone stores are located to offer an “After Movie Pass” – good not for discounts, but for free samples of a new Cold Stone flavor, or the flavor of the month.
Free samples help build traffic, credibility and rapport with a new and existing customer base – all important in rebuilding both store volume and the overall image of the brand.
“The Cold Stone story is a good case study in a premium brand confusing demand with mass market appeal,” Shaw said. “Ideally, the company can make both the organizational and tactical changes it needs to survive and thrive – both for its sake and the future of its franchisees.”
ActionCOACH is the world’s number one business coaching firm, with more than 1,000 offices in 26 countries. To learn more about business coaching and ActionCOACH, go to actioncoach.com.
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