The RedRoute International Franchising Opportunity

©redrouteinternational2015

Decisions that count

The RedRoute Franchising Opportunity:

June 2016Andrew Smith

To be in business for yourself - but not by yourself


ContentsRRI Company Background

RedRoute’s Key ServicesYour Own Marketplace

Creating SolutionsGetting Involved

Your Rewards

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The RedRoute philosophy

• To become trusted partners - making a difference to our clients with transformational strategies based on rigorous analytics, customer insight, and in-depth business understanding

– Tailor-made– Progressive– Predictive– Simplifying

• Delivering winning strategies

• Supporting implementation3

©redrouteinternational2015 4

Marketing Effectiveness Agency

• Our holistic approach helps you to:– measure your client’s business drivers– refine your client’s marketing strategies for maximum impact– deliver step changes that enable your client to a chieve their business vision

• We help you shape your client’s marketing decisions, strengthen your client’s business and equip them to beat the competition– We are a catalyst helping you deliver winning strategies for your clients

• Put simply, by working together we:– Diagnose – what really matters– Predict – the most likely outcomes– Propose – the most insightful winning strategies visit www.redrouteinternational.com

Case Studies


The RedRoute network

• Currently comprises a group of c.30 people

• Hubs in London & Singapore– with Affiliates in Greece, Poland, Saudi Arabia, Dubai and South Africa

• Studies completed in:– More than 40 countries and – Over 200 categories

We Are Growing - Become Part of the Success Story


ContentsRRI Company Background RedRoute’s Key Services

Your Own MarketplaceCreating Solutions

Getting InvolvedYour Rewards

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Summary of key services

GLIDEPATH – predicts your future sales trajectory

AIME – magnifies your brand values to deliver competitive edge

OMEGA – Solves the complexity of media choices

OPIUM – understands your customer like a “best friend” would

PRISM – reveals the power of pricing

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Example clients


Typical success stories

OMEGA recently delivered for a major airport operator a £3m sales benefit through an improved allocation of the existing media

budget. This represented a 30 % increase in the sales generated by the marketing budget)Typically a 15-25% efficiency from media

bugets is achievable

OPIUM improved targeting of the 1-to-1 marketing programme for a multi billion £ DIY retailer . Sales increased by +£34m

within the first year

GLIDEPATH’s marketing mix recommendations enabled a European

consumer goods manufacturer to increase market share 4 share points

equating to €14m per annum in sales value

PROFESSIONAL ENDORSEMENTS

RedRoute is part of the globally recognised Diploma programmes run by the Institute of Promotional Marketing and the Institute of

Practitioners in Advertising

RedRoute media modelling expertise and approach is a key part of the University of

Westminster International Integrated Marketing Diploma Course

AIME modelling and recommendations resulted in a new media campaign and

messaging for a large UK retailer. The improved brand preference delivered

c.£18m per year extra sales per annum

PRISM identified a £13m per annum profit opportunity from optimising pricing across the

portfolio of a leading UK branded wine company

Typical gains of 10% of sales value are very achievable

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Don’t just take our word for it…"RedRoute undertook key studies for us to evaluate the potential benefits of new customer service initiatives…..

The overall benefits of their work resulted in the identification of opportunities for company profitability and business development worth many millions of pounds a

year.”Tony Dobbs, Head of BI & Market Research,

Viking (Office Depot)

“RedRoute’s help in quantifying the likely impact of our marketing strategies and tactics has repeatedly enabled us

to meet and overcome some very new and challenging market conditions. Their predictions have always proved to

be very reliable, enabling us to feel confident we are always making the right decisions for the right reasons.“

Andrew Smith, CEO, Turk Henkel

“….Heathrow has worked in close partnership with RedRoute on measuring our media effectiveness….. As a result, we have been able to accurately predict our long

term revenue performance by understanding the planning levers for, and identifying & quantifying the impact of the

drivers of, Heathrow Airport’s retail businesses.”David Ellis, Head of Research and Insight,

Heathrow Airport

“We believe that the RedRoute model is fit for purpose, providing a comprehensive rationale for the drivers of

historical sales performance trends and a plausible set of ‘baseline growth’ sales-per-passenger projections.”

Civil Aviation Authority Review (2012)

“We always knew attitudes to DIY were important but only by combining with knowledge of customer circumstances

could we quantify their impact on the drivers of store sales. Now we are leveraging attitudes as well as past behaviours

in our marketing strategy, sub-segmenting customers; targeting by life-stage & attitude, no longer just RFM.

Andrew Glover, Customer Strategy Director, Homebase

RedRoute conducted modelling to develop pricing scenarios for our UK retail business. This resulted in us gaining valuable insights into the impacts of alternative

pricing strategies and we have used those learnings to shape our future price strategy recommendations. We can now

respond more quickly and more effectively to our competitor’s price and promotion moves.“

Matthew McKee, Commercial Sales Director, Proximo UK





Your Rewards

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Market has hardly been tapped…

• Only 7% of organisations always set clear accountabilities for their objectives

• Only 7% of companies always set KPI’s clearly for each initiative

• Only 10% of businesses have core strategic metrics that remain consistent to enable longer term reporting

CIM – Deloitte Joint Study on Improving marketing effectiveness, 2016


Measures that count…..

• While 96% of companies measure customer satisfaction only 10% of businesses are very effective at measuring cost to serve, and only 10% are very effective at measuring consistency of the customer experience

• 80% of companies measure brand health – but only 15% say this is very effective and only 32% of companies measure brand valuation fairly or very effectively

Source: CIM &Deloitte – Improving marketing effectiveness study 2016

Companies measure what’s easy, not what counts…


Measures that count…..

• Only 23% of companies measure social media fairly or very effectively

• Organisations perceive their ability to measure digital channels as being no stronger than their ability to measure traditional media activities

• And over 2/3 of businesses feel their KPI’s are not optimal for measuring the impact of marketing

Source: CIM &Deloitte – Improving marketing effectiveness study 2016

Companies measure what’s easy, not what counts…


Existing measurement processes aren’t delivering sufficient return

• Only 51% of companies believe that executives drive change as a result of marketing or customer performance measures

• Only 1/2 of organisations believe they have timely reporting

• 1/2 of organisations feel their reporting isn’t sufficiently accurate

• Only 36% of companies say they have data that is presented in an effective way to enable insight to be identifird

• Only 39% of companies believe they are fairly or very effective at measuring ROI (and fewer still act upon it)Source: CIM &Deloitte – Improving marketing effectiveness study 2016


Who will be your clients?

• In short – people you already know

• The RedRoute Story– RedRoute, like all consultancies, began looking for business by talking to people the founders already

knew and had worked alongside in the past, either as colleagues, clients, or agency personnel– Sending out a brief PowerPoint presentation (of which RedRoute’s e-booklet is now the present day

equivalent) to people who already knew our capabilities and trustworthiness led to projects with former employers, former clients, and former colleagues.

– For the cost of stamp, business streams opened up which have lasted ever since, including Office Depot, Heathrow Airport, and a range of beverage companies and retailers

– What has changed in the market is that opportunities have grown exponentially as the digital revolution has taken grip

– Data now exists everywhere, and new forms of data tracking activities as diverse as the habits of bees to the times you clean your teeth are appearing everyday

– Companies need people with the skills and expertise to not just look at the data but to also uncover meaning and insight to be able to predict future trends and invest their marketing budgets on the most effective activities for their brands

– Working together, you can supply that support to a range of people either you or we know already – that is how the business has grown in the past and the opportunity is to become part of that story

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How many clients do you need?

• It depends solely on your ambitions

• For an independent consultant, a single client may provide £50k - £100k of revenue for you per year

• So a span of 3 – 5 clients could be expected to deliver on average c.£300k per year in annual revenue.

• Out of that, you could reasonably expect to retain £150k

• The key difference between this and being an employee is that you would also be creating your own asset you can later sell

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What skills would you provide?

• There will almost certainly be at least one of the key services we outlined earlier which you will be able to deliver better than anyone else, especially if they are just setting out– Which ones best play to your own particular skills & strengths?

• You have been there, faced the problems and found the solutions. – So have we.

• So you would be joining a mutually beneficial network of trusted advisers that will serve to magnify the value of your own skills – Working together to build winning solutions

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Your Rewards

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Creating solutions for clients: Three key aspects

1. Understanding the client’s business problem and getting the right people and solutions together to address the need

2. Working in partnership with the client by bringing

the specialist skills, resources and solutions

needed – not simply client and agency

3. Providing your client with tools and frameworks that enable them to benefit from your work on-going and implement the solutions

What you get from RedRouteMarketing, Training, Support,

Solutions, Tools, Skills, Resources


Setup Step 1:MEASURE

Step 2:PLAN

Step 3:EQUIP

Step 4:MONITOR

• Define key client business questions and challenges

• Identify critical internal and external data

• Measure the impact of key demand factors

• Measure marketing effects

• Develop price, marketing mix budget optimisation or customer analytics segmentation modules

• Equip client with tools so they take ownership

• Training to embed key learnings, recommendations, implementation approach and rollout

• Implement bespoke monitoring

• Put in place data management solutions

The solutions roadmap

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1. DIAGNOSTICS

Knowing the dynamics of their sales performance and how to leverage them to help the client achieve their business plans

2. PREDICTIONS

Predictions of the sales and profit consequences of alternative marketing strategies and tactics

3. PROPOSALS

Proposals on the best strategies that will enable your clients to achieve their business objectives

How it all fits together

The deliverables you’ll provide

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Your Rewards

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How it works

• The RRI Franchise System– The ‘RRI Franchise System’ is defined as the total sum of the business system rights

that are licensed for use by the franchisee, including branding, know-how, systems, territory, initial training and support, for which a franchise purchase fee and ongoing royalty fees are charged by the franchisor

• Joining the network– A full franchise purchase fee is £50k but there are also ‘Soft Start’ options (see below)– On-going royalty fees are a licence fee of 5% of turnover and an advertising fee of 2%– Joining the network also requires a written commitment to follow common protocols

• Soft Start option– The Soft Start option requires a deposit of £2.5k with the remainder of the fee

financed by RRI and repaid slowly over the first 3 years through a higher royalty rate• Note: the start date for repayments is also deferred for 6 months so as to allow the business to build

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What the franchise provides

The key components of the RRI Franchise System include:

– Product Management & Solution Development– Training– Operations Manual– Corporate & Brand Identity– Territory / Business Area Selection and exclusive ownership– Software Systems and Solutions– Marketing Resources & Tools– International Advertising Spend– Clients & Referral Network– Website– Central Phone Number– Financial Management

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The RRI Franchise System

To help you envisage what this support contains, the following elements are expanded on in the following few slides:

– Product Management & Solution Development– Training– Marketing Resources & Tools– International Advertising Spend– Clients & Referral Network

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Service management, solutions tailoring & solutions development

RedRoute International Limited:

• Global UK head quarters in London providing centralised resource of subject matter experts (SME’s) in each of the key services

• These SME’s provide the technical delivery of business solutions

• The SME’s are the IP owners and developers of the key services and can also tailor them to meet the needs of your particular clients – it is not a “one-size-fits all” service – every client is unique

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Management teams

RedRoute InternationalPRODUCT MANAGEMENT & SOLUTION DEVELOPMENT

• Technical Delivery of Business Solutions

• IP Owner / Developer

• Subject Matter Experts

• Back Office Systems

BUSINESS DEVELOPMENT

• Coaching in market sector targeting

• Lead generation and customer conversion strategies

• International/National Accounts referrals

• Best Practice transfer

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FRANCHISE NETWORK DEVELOPMENT

• International Development of the RedRoute Brand

• World Class Induction Training of the proven headline solutions

RedRoute International (Franchising)


Training

• RRI has developed a comprehensive initial training program that is provided to franchisees in their first 15 days with us

• Our training courses are a mix of practical and classroom learning:– The Key Services – theoretical background, underpinnings, case examples– How to Present the Key Services to prospective clients– Prospecting, designing and proposing solutions– Closing the sale– Project management, delivery and on-going support

• Ongoing e-training

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Marketing Resources & Tools

• RRI has developed a comprehensive range of tools and resources that are consistent with the image of the brand and assist franchisees in maximizing the effectiveness of their marketing

• These tools include quality PowerPoint presentations, sales management scripts together with state-of-the-art selling tools, template customer letters, flyers, brochures, print advertisings, digital key words/adwords and display banners, e-Blasting and landing pages

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International Advertising Spend

• The International Advertising Budget is managed by the franchisor to pay the costs of developing, producing and publishing advertising, marketing and promotional materials

• By contributing advertising fees into a group fund, individual franchisees are able to benefit from much greater advertising exposure than they could afford if each franchisee had to market their business on an individual basis

• As the network grows, the level of funds in the advertising account grows accordingly

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Clients & Referral Network

• RRI have a global database of over 1000 potential clients together with a comprehensive database of past and current clients with case studies traversing almost every industry sector

• Critical to the success of each franchise are the personal marketing activities you perform in order to generate enquiries & sales

• Complementing this is the range of customer enquiries and business that is generated from the marketing initiatives of the RRI network, through group advertising, thought-leading presentations, seminars and webinars; central website; new tools; education; and so on

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Why your clients will want to work with RedRoute

• Successfully completed projects across all sectors and internationally

• We deliver robust, valued-based insight and recommendations

• Deliver actionable strategic options that are relevant – it isn’t analysis for the sake of analysis

• Our approach is fully validated by expert trade bodies (e.g. IPM, IPA. ESA, CIM, IDM, CAA etc )

• Resource pool of senior analysts, market research experts and consultants with client and agency experience

• Fully independent, ensuring maximum credibility for recommendations

• Extensive affiliated network





Your Rewards

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Typical financials

GBP’000 Year1 Year2 Year3Year4 Year5

Gross Sales 150.0 350.0 500.0750.0 850.0

COGS 97.5 227.5325.0 487.5 552.0

Gross Margin 52.5 122.5 175.0262.5 297.5

Operating Costs* 25.5 38.5 52.0 72.5 86.5

Operating Profit 27.0 84.0 123.0190.0 211.0

Notes: 1) Model is based on actual UK Year 1 to 5 results delivered by a single consultant without HQ

resources 2) Op. Costs include Franchisee Royalty & Adv Fees plus marketing & variable costs


Return on investment

• Cumulative profits at the end of the first two years can be expected to be at least £100k

• The break-even point on a full £50k investment would therefore be between 12 – 18 months after start-up

• At the end of five years, the return on the initial £50k investment would be £635k (+£585k)

• What if the sales do not come?– We would expect that is unlikely to happen (!) but if you wish to leave

the network at anytime within the first 18 months of joining then the only financial cost to you would be your initial £2.5k deposit

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Building an asset

*At the end of Year 5 the plan shows the franchisee will have grown a business with a marketable value of £1.5m (£211k profit at a Multiple of 7)

As a Franchisee you would also be Building a Business with an expected Business Enterprise Value of £1.5M after 5 years*

This is not wishful thinking.The market for leveraging data to generate unique customer insight is

growing at a phenomenal rate as more and more data becomes available. You can ride this wave too if you have the right board to rely on.


Financial endorsement

• The financials shown on the previous pages have been independently endorsed by our accountants as a true reflection of RedRoute’s historical in-market performance so you can have confidence in the expected returns

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Moving ahead

• Joining the network is not to be done on a whim

• Discussion is required to define the areas to work in, where the initial business will come from, which services you can most easily support, and develop a route plan

• Only at that stage will you be ready to start

• The first step is a wider discussion

• Let’s review how it might work39


Decisions that count

In Business For Yourself But Not By Yourself

October 2015Andrew Smith

The RedRoute International Franchising Opportunity

Small Business & Entrepreneurship

Transcript of The RedRoute International Franchising Opportunity