Lead Generation, Franchisee Profiles, and Sales Follow-up
Franchises have been relying on expensive broker leads more and more. In this article we explore other lead generation strategies that may lower over lead costs and help find quality franchisees. We also cover lead follow-up and how it may be holding you back from attracting quality new franchisees.
In recent years lead generation and even more so quality of leads generated has been a hotbed of controversy throughout the franchise community. Franchise systems struggling to add quality new units has lead to further scrutiny of franchise lead sources and some individuals have even attempted to drive fear through the franchise community proclaiming the end of franchise sales as we know it, suggesting franchisors should completely turn over all their lead sources and lead follow up procedures that have been successful in the past or they may end up in the franchise graveyard.
While franchise development certainly requires slight adjustments with changes in the business environment, it isn’t time for panic or wholesale changes! There are quality prospects still looking for good franchises and reaching those individuals has always been more closely linked to execution than jumping to the newest fad in lead generation or follow up procedures.
To examine lead generation you have to pay close attention to its sister processes, creating a franchisee profile and lead follow up procedures. So, the following article will touch on creating an accurate franchise profile thus allowing you to determine the best lead sources for your brand and additionally how to properly follow up with interested parties to get the most from your newly generated leads.
With many different lead sources including franchise portals, newspapers, trade magazines, referral programs, social media, PR, and trade shows, how do you determine where to advertise? By developing a franchisee profile and aligning your desired demographic with the advertising outlet’s readership you will more precisely reach the prospects that match your franchise system. So how do you create a franchisee profile? Creating a comprehensive franchisee profile can be daunting but here are 2 key steps you can begin with:
- Examine your system and create a list of transferable skills needed to be a successful operator and weigh those results based on importance
- Examine your top performers looking for commonalities in everything from age, hobbies/interests, business background, financial status, community involvement and their family support system.
After compiling a franchisee profile, you can approach advertisers and request media kits detailing not only the traffic and frequency of their subscribers but more importantly if those subscribers match the traits and demographics of your ideal franchise prospect. You may find advertising sources you never considered based on mining information about your franchise system and comparing the results with the advertisers. For example, if you found many of your top franchisees are older men, with an interest in golf, active in local charities and your needed transferable skills include management experience and an outgoing personality, you may decide to get a booth at a local charity golf outing put on by business men’s groups in a market where you need a key location.
Now that you have created your franchisee profile and are comparing results with possible advertising sources, it’s time to take a look at the two remaining sisters, lead generation and lead follow-up procedures. In Franchise Update’s 2021 Annual Franchise Development Report (AFDR) statistics reveal franchisors spend the most money on web leads followed by referrals although closing ratios don’t follow money spent quite as closely.
At first glance we may simply assume budgets are down, a large amount of money is being spent on the web and clearly referrals are much better leads than any of the other sources, but as anyone who has taken a statistics class can attest — the numbers are not always what they seem. To further the following discussion, it is important to examine a few other items from the report.
- 42% of franchisors spend less than $10,000 per year on the materials that support the franchise development process. (Brochures, FDD printed and mailed, electronic FDD’s, in-store recruitment materials, video production etc.) While 75% spend less than $25,000 per year
- The use of brokers has doubled in the past five years, 78% of those using brokers have closed sales in the last year, the majority of broker leads are created on the internet
- 1% of leads results in sales, 10% of applications and 65% of Discovery Days
- None of the franchisors who are reaching their development goals consider market conditions poor while of those not reaching their goals, 31% describe market conditions as poor
The data brings up many other questions — why is there so much money spent generating leads but very little spent on the necessary sales support materials? Why are the closing ratios for broker leads higher when they are often essentially the same exact leads that can be generated for $40 by a franchise portal? Is it safe to say the easier leads to generate are the harder ones to close? You can’t necessarily control the flow of referrals you receive, you can encourage them with incentives and a referral marketing program but you certainly can’t be certain any referral leads will be generated. While if you advertise on quality franchise lead portals you almost certainly will receive an instant flow of leads, but can you warm them up and close them? And with the resurgence of trade shows you can meet hundreds of quality prospects in a single weekend, but is your system set up to handle the follow-up and separate your franchise from the noise created by so many exhibiting brands?
So, what else can be gleaned from all this data, an assumption that could be made is franchisors are much better at nurturing relationships with prospects in a warmer state, meaning individuals that are a few rungs further up the buying ladder. The art of the introduction seems to be lacking. For instance, referrals, individuals who meet the franchisor in an optimistic state of mind and already have a positive view of your franchise business are only responsible for 10% of total overall leads but they are the second-best closing source, responsible for 28% of all sales. A more shocking example is brokers — many franchisors feel more comfortable with the warmed-up leads from brokers while the vast majority of leads brokers are warming up and passing to franchisors are generated through the web and in some cases from advertisements right next to the franchisor on the exact same franchise portals! If franchisors were able to take the same portal leads from initial inquiry to application through discover day and eventually closing, franchisors would save the double digit fees the broker networks are charging to simply perform the initial step of warming up a lead. So before determining what lead sources are best for your franchise system you have to create a lead follow up system capable of bringing a quality prospect through your process regardless of what stage of the buying ladder they are acquired.
An online franchise portal recently provided data about a specific client illustrating how closely related lead generation and the perception of lead quality is to proper lead follow up. They sites an extreme example based on a client who was advertising on their portal for almost a year and although they had good “lead flow” they had not closed any sales, nor had they received any applications. The client had often complained of lead quality and “tire kickers”, The franchise portal staff felt they had a quality brand, but the issues were connected to lead follow up. They suggested the company work with a professional firm to shore up their development processes before giving up. The client took the advice and engaged a franchise consultancy to create a tighter and more accurate follow-up process. To begin, nothing but the actual initial calling procedures and emails were changed, the portal copy, client’s website and the printed franchise information materials being mailed to prospects all remained the same. After the first full month of follow-up with the new system, the client received 19 applications! In the first full year the client was 110% of their franchise sales goals and continues to be ahead of their goals for 2022! The franchise portal staff notes, “When you consider all of this, you realize how important first impressions are! Everything from email correspondence to initial voicemail messages and the franchisor’s website holds much more weight in the end results than the franchisor realizes in many cases”.
So, what needs to be done to generate good quality leads and close the best new franchisee prospects? Paying attention to the sisters is the key and equal emphasis needs to be put on each. Following are some steps and tips to start with:
Step 1 – Create a consistent franchise lead follow up system accounting for managing different types of prospects at all different stages of the buying process. If you don’t have the background, necessary skills or infrastructure in place to create the process, there are many quality resources including books, blogs, articles, training courses, franchise conferences and franchise consultancies available within the franchise community to assist you. The follow up system should include exact goals for each interaction with your prospects. Early in the process, if you find yourself on long calls followed by lengthy emails you are likely making mistakes. Your sales process should be controlled allowing for a reasonable amount of information to be exchanged at each stage of the sales cycle. So, if the length of your sales cycle varies from prospect to prospect and your phone calls change in length and content depending on the day; revisit your process and tighten it down.
Step 2 – Develop quality materials to support the franchise development process including a franchise information packet, portal copy, a separate franchise development website or section of your current website, follow up emails and specific voicemail messages that mimic your emails and printed message. Remember your portal copy, website and franchise information packet are your first impressions so make sure they not only integrate with your entire franchise development process but also convey the culture, tone, and expectations for your franchise system. Your materials shouldn’t be judged just by how they look, the impressions your materials create, evident by the questions and expectations they set with prospects should be heavily weighted when determining their effectiveness.
Step 3 – Create a strong accurate franchisee profile and align the results with the best lead sources, placing emphasis on total traffic, demographic of readership, cost, and geographic accuracy. It is not as simple as just looking at your top few franchisees and trying to clone them. Spend time between your departments; executive staff, administration, training, and field support gathering insights into what “makes” a quality franchise in order to create a comprehensive profile and continue to hone the profile as your system grows. Utilize your advertising sources; they may be able to adjust your message or placement within their publication to drive the best matching prospects more accurately. If you choose to opt for in-house items such as pay-per-click or an SEO campaign you will need to communicate your desired goals to the web marketing staff.
Step 4 – Dedicate staff for lead follow up. Lead follow-up is not something that can be sandwiched between litanies of other owner duties during a typical workday. If you are the owner of the franchise business and want to perform the follow up, it will be necessary to delegate your other responsibilities. You may consider the differences between a lead screener and the remainder of the sales process, these can be very different skill sets, the screener is a volume position making upwards of 100 calls per day lasting just minutes each while the following calls may be 30-45 minutes each but will be much less frequent. Although both will have a tremendous affect on the results, it may not be best to have them handled by the same individual. If you know you aren’t going to diligently call the continuing influx of leads consider hiring someone in-house to “warm up” your inquiries. If you choose to outsource consider using a third-party screening company or a broker network. Once dedicated staff is in place ensure the individuals have the proper training to perform their role in the development process.
Step 5 – Monitor your results; keep track of contact ratios, where quality prospects fall off in the process and what sources result in the best prospects becoming franchisees. Based on where you lose quality prospects adjust your system before determining the leads are of low quality. By tracking the data, you will know what lead sources provide the best results. Don’t be surprised if there are a variety of sources that in combination work well, with a quality message and materials and accurate follow up procedures you will likely find many sources successful and by diversifying your advertising you can avoid the ups and downs sometimes associated with spending your entire budget with one source.
Step 6 – Follow up — Follow up and Follow up. It is often said the first person to reach a prospect has the best chance of the prospect joining their system. However, there is little or no data to support this. Certainly, quick follow-up is important but just as important is being organized and ensuring the quality of each contact. If you simply call franchise leads absent of goals and you find each call is an organic conversation varying by where the prospect takes it, you are likely doing more harm than good and should go back and repeat step 1! So, it would be better to say those who are first to reach prospects with a clear, organized message using a quality process complete with specific steps and goals will have the best chance of the prospect joining their system.
By ensuring all the proper steps are taken and not neglecting any of the sisters of lead generation you will likely find better overall prospects, lower costs per sale, shortened sales cycles and stronger long-term franchisees. And if you put the time into the pre-work you might find it a lot less frustrating and maybe even some fun!
By: MJ Alto
