Tell your digital side of the story before it’s too late: Network effects

NetworklogosA network effect is:

the effect that one user of a good or service has on the value of that product to other people.

The classic example is the telephone. The more people own telephones, the more valuable the telephone is to each owner. This creates a positive externality because a user may purchase their phone without intending to create value for other users, but does so in any case…

Over time, positive network effects can create a bandwagon effect as the network becomes more valuable and more people join, in a positive feedback loop.


Some groups of franchisees have been exceptionally successful for many decades. Paradoxically, this success may lead to their almost total defeat because  they fail to understand the exceptional, new power of accessing existing information networks via digital Self-Publishing.

  • Fighting a public relations war with litigation alone may prove to be very limited.
  • Legal representation is essential but not 100% of the solution.

If I were a Canadian GM or Chrysler auto dealer group, I’d want to be become very, very aggressive with a digital communication strategy. The investment leverage in a Web 2.0 task team would be extremely attractive.

We’re all franchisees under the skin, aren’t we?

When your opponent wants to cut deals behind closed doors, cherry-picks their “favourites” and wants everything hush-hush, it makes strategic sense to speak up.

  1. The old alliances and associations are dead to you now. The relationship has regressed by +50 years.
  2. Your future belongs to the technologically nimble.
  3. Wrap yourself in the business format franchisee flag and  tell your communities who are the brand bullies.

Start with 1,000 of your customer’s email and hire the most credible franchisee advocate you can find.


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