Highlights from FranConnect’s annual Franchise Sales Index report
Want to know how your franchise recruitment efforts stack up against the industry? FranConnect just released its annual Franchise Sales Index report, which provides a comprehensive look at the state of franchise lead generation and franchise sales.
FranConnect is the leading CRM in the franchise industry, and the report combines data from nearly 600 brands to spot trends. You can download the full 69-page report here.
Here are some of the highlights that stood out to FPG, and insights that you can use to boost your results:
Lead-to-deal ratios
- About 1% of all leads turned into deals.
- Website leads were the best digital source, with 1.25% of leads becoming deals.
- Portals had a lead-to-deal ratio of just 0.32%, but there were some outliers such as Franchising.com (2.3% of leads became deals) and Entrepreneur (0.9% became deals). See below for a closer look at portal performance.
- Referrals converted at an extremely high lead-to-deal ratio — 6.6% for in-network referrals and 4.25% for referrals from brokers. Yet most brands don’t have plans in place to leverage existing relationships and encourage referrals.
- 85% of leads that became deals were reached by a recruiter within 4 hours of their initial inquiry — but only 16.5% of leads are reached that quickly. Below, we highlight three marketing automation tools that can help you reach leads and initiate conversations much faster.
- 74% of leads were never called by the franchisor. This is abysmal. 100% of leads should receive a call.
Why some portals have better lead-to-deal ratios
Franchisors throw a lot of money at franchise portals because it can be the quickest way to generate lead flow. But do they generate deals?
Not very efficiently. Franchise portals were responsible for 29% of all franchise leads in 2019, but only 9% of deals, according to FranConnect’s report.
There appears to be an inverse relationship. Portals that generate the most leads tend to have the worst lead-to-close ratios — likely because candidates are submitting info when they are still at the beginning of their research journey. For instance, Franchise Help generated 26.9% of portal leads but had a lead-to-deal ratio of 0.1%. Is it worth the massive investment in advertising and salary if your recruiter is only closing 1 deal out of 1,000 leads?
Entrepreneur was an exception. In 2019, it was responsible for 13.5% of all portal leads, but had a respectable lead-to-deal ratio of 0.9%. The other big outlier was Franchising.com, which generated 8.8% of leads and had an outstanding lead-to-deal ratio of 2.3%.
What differentiates Entrepreneur and Franchising.com as lead sources? Content.
Franchising.com’s portal listings include the same lengthy one-page article you see on most portal sites, but also include a navigation bar where users can find a business overview, articles, awards, image galleries, and videos. They essentially create a summary version of the content you’d expect to find on a franchise information site. Users have an opportunity to learn much more about your brand, so by the time they submit their contact info, they are much more likely to be engaged with your franchise opportunity.
Entrepreneur is an even more revealing case, because they partner with Franchise Help in order to generate leads — using Franchise Help’s quiz technology to power lead generation efforts. Since they are using the same technology, why are Entrepreneur’s leads so much more likely to turn into deals compared to Franchise Help’s?
Entrepreneur has a lot of authority thanks to decades as an information resource for small business owners. There is a wealth of information available on the site, and people who are on entrepreneur.com can use the search tool in the top right corner to find not only your franchise listing, but also articles that have been written about your brand over the years. They can become educated buyers.
Why you should invest in your own content first
Enabling people to research your brand improves the quality of your leads.
This is why FPG advises franchisors to invest in content first. As franchise buyers search for information about your industry and your brand, they should quickly find a robust franchise information website. Your franchise information site gives you the opportunity to educate candidates about your business model, your culture, what franchisees need to do to win, and how the franchisor helps.
A well-designed, storytelling website will help you attract more highly-qualified candidates. In fact, when we speak with portals, many of them say that a big part of their value is simply creating awareness of your brand so that candidates will search for more info on your franchise opportunity site.
How to get more referrals
As FranConnect notes, the leads that are most likely to turn into deals — by a wide margin — are referrals.
That’s no surprise. Even though two-thirds of the franchise buyer’s research journey has moved online, relationships still matter. There is no better validation than word-of-mouth.
You shouldn’t be afraid to ask for referrals. If your franchisees are happy with the direction of the brand, they’re usually eager to recommend the investment to friends and colleagues. People in your professional network are also likely to be intrigued by the business opportunity.
The key to getting more referrals is to keep the opportunity top-of-mind. The content that you should already be creating for your franchise information site is invaluable. When you publish a video testimonial, a case study about a successful franchisee, or a profile about one of your support team members, share it with your franchisees and your network. Publish the information in internal newsletters or forums, on your social media feeds, and in social media groups. Share the excitement about your brand with the people who know you.
If you are working with broker networks, you should share this content with them, too. If you have a contract with a broker network, most will allow you to share a monthly email with all of their business consultants. Make sure brokers know about the success stories within your brand, and also be sure to highlight any sales that a particular broker may have contributed to. Highlight not just your success, but the broker’s, too! Once they know that you have a sellable concept, they’ll be more likely to present your opportunity to their clients.
Ways you can improve your speed-to-lead
The average cost per lead in 2019 was $213. Franchisors spend millions each year generating leads, yet much of that money is wasted. FranConnect says 74% of candidates are never called by a recruiter. As FranConnect notes in the Franchise Sales Index, “A brand that only reaches out to 50% of new leads, assuming an average of 100 per month, will have squandered $127,800 of their annual budgeted spend.”
But it gets worse. It’s not enough to contact a lead — you need to contact them quickly. According to FranConnect data, 85% of leads that became deals were reached by a recruiter within 4 hours of their initial inquiry — but only 16.5% of leads are reached that quickly.
As veteran recruiters, we get it. Sometimes you are busy with a Discovery Day, or a lead submits their contact info in the middle of the night and you cannot personally respond within 4 hours. Fortunately, there are tools that can help you automatically initiate contact.
Introductory emails:
As soon as a lead reaches your CRM, you should send a thank-you message with a few additional details about your brand and about yourself, as well as an invitation to talk. Some recruiters now record short videos to introduce themselves to candidates. FPG likes to include links to eBooks and other privileged assets in this message so the candidate can continue their research and stay engaged. Plus, since some candidates will want to think more about the opportunity before having a conversation, it doesn’t hurt to have a PDF report sitting on their desktop as a reminder.
Ideally, this initial message will be connected to an email campaign that will continue to send emails for several days — or until you update the candidate’s record in your CRM to indicate that they have responded.
Automated text messaging:
There are several great software platforms that allow you to immediately send a text message to a candidate once they become a lead. While FranConnect has some texting functionality, we currently prefer both FranFunnel and TextUs because of their simplicity and capabilities.
Text messages are great because people are much more likely to respond. Emails are bulk deleted. Calls from unknown numbers are ignored. Text messages, on the other hand, are almost always seen.
Simplicity is key. Messages should be short, and should have one purpose: Set up a time for a conversation. If the lead comes during working hours, you can have your automated text messaging platform send a yes-or-no message asking if the candidate is available to talk. If you get a yes, you have a hot lead ready to talk and you should reach out either with a call or to set a time. If the answer is no, you ask when would be a good time for them to talk. After hours, you thank them, ask if there is a good time to talk tomorrow, and follow a similar script.
Texting and email both benefit immensely from the next tool.
Scheduling tools:
If you are not already using a scheduling tool to allow candidates to book a call with you on your calendar, do it now. Scheduling tools increase your contact rate by allowing candidates to immediately commit to a conversation at a time that works well for both them and you.
The most popular scheduling tool is Calendly. It offers a free plan that is sufficient for booking initial calls. Here’s a quick setup video. Another popular option is Acuity, but there are many others.
The tools integrate with your calendar and show available time slots. You provide a link that candidates can use to pick and book a time.
Once you have set up a scheduling page, you should include the link in your emails and text messages.
How FPG can help you
Franchise Performance Group’s mission is to help great brands grow by recruiting franchisees who are likely to thrive.
FPG’s team members are experts with more than 100 combined years of experience in franchise development. We use modern marketing and sales tools and strategies to drive quality lead generation and turn leads into franchisees.
Our team can help you with:
- Franchise website and design
- Digital marketing/Lead generation
- Franchise recruitment processes and sales training
- Outsourced franchise sales
- Organization planning and executive strategy
- Capital solutions
If you could use help in any of those areas, please use the form below to contact us. We’re happy to listen and propose solutions.