The performance gap continues to widen between companies that adapted to the new franchise buying behavior and companies that cling to old failing tactics
By Thomas Scott and Joe Mathews
How are you going to generate franchise leads this year and beyond?
Do you know where people are looking for franchises? Do you know what questions they have? Do you know how to get your story in front of them? Most importantly, do you know how to engage and work leads who don’t want to talk to you yet?
Based on Google’s search data, interest in franchise ownership is at an all-time high. Most franchise sales teams, though, are struggling to hit goals.
Dr. Phil one said, “There are only two types of people, those that get it and those that don’t.”
The franchise industry is divided into two distinct camps when it comes to franchise lead generation: those that cling to yesterday’s winning formula from the past which is no longer producing acceptable results today, and those who reinvented their franchise sales lead generation tactics to reflect changes in buying behavior.
What do we mean when we say, “Clinging to the past?” Let me cite an example. A “low tech” yet highly experienced 20-year franchise sales veteran was recently asked to be part of an expert panel on lead generation techniques. He offered the audience the following piece of advice. “Put your 800 number on your cups, napkins, and receipts.” No doubt somewhere in the audience, a sarcastic tech savvy 30-year old leaned over and jokingly asked, “Hey Grandpa, what is an 800-number?” He may have well suggested to the audience members to change their names to AAAAAAAAA (restaurant or service provider) in order to get best position in the yellow page directories.
Isn’t it far more consistent with how people investigate opportunities to place the domain url or QR code for your franchise opportunity website? Unless you have a flip phone and pay-per-minute cellular plan, isn’t every phone number a toll free number?
Clinging to those old ways of doing things just about guarantees underperformance, and mimicking what those (underperforming) brands do will produce a poor result the majority of the time. Time and time again, when franchisors clients adapt their lead generation tactics and recruitment strategies to match the changes in buying behavior, they see dramatic increases in results. For instance:
- Menchie’s Frozen Yogurt Added more than 120 franchisees in 2013 and over 140 franchisees in 2014, outpacing their crowded peer group by a long shot. In 2014, they were one of the few frozen yogurt chains still growing.
- Marco’s Pizza opened over 140 stores in 2014, outpacing the gigantic yet stagnant category killers in their segment. Leads generated through their recruitment website, marcosfranchising.com increased by 320%.
- Team Logic IT, a managed IT services provider for small and medium businesses, overhauled its franchise recruitment website and launched a brand storytelling and content marketing effort and hired a top franchisee recruiter to expertly work leads. Leads generated from its recruitment website increased a whopping 800% and the number of recruited franchisees jumped from 6 in 2013 to 19 in 2014, almost all in the last half of the year under the new recruiter’s watch.
- Christian Brothers Automotive celebrated a record year for franchise recruitment. After overhauling its franchise recruitment website, lead generated doubled and ongoing content marketing has kept the pipeline full with potential new franchisees who are a culture fit for this faith-based concept. Content marketing on the website helped overcome two regular objections prospects raised while touting corporate culture and values, ensuring culture fit.
- Fantastic Sam’s, an iconic brand going through a high-profile brand evolution, overhauled its franchise recruitment website and began buyer-centric lead generation. Leads generated jumped by 250% and their deal flow increased from a few new franchisees per year to one to two deals a month and accelerating.
- Chem-Dry Carpet Cleaning overhauled its website in 2012 and saw a significant increase in qualified leads generated. Consistent content marketing since then has helped the brand recruit more than 100 franchisees per year since 2012.
Notice how these breakthroughs are consistent across industries, sectors, and investment levels. Each of these franchisors is following a similar strategy to generate more franchise buyers.
What happened to create the breakthroughs? These recruitment teams are thinking and acting differently, aligning their advertising, marketing and sales process so they are consistent with how modern franchise buyers research and purchase franchises.
Do you know what every breakthrough in the history of mankind has in common? Someone saw something differently and then acted differently. No one ever acts differently until they see it differently.
Smart franchisors have seen these “game-changing” new trends in how franchise buyers research opportunity, how search engines affect website traffic and results, leading a reinvention of how they recruit franchisees. Here are our Top 10 trends for franchise lead generation:
Trend No. 1 – Out with VPs of Marketing controlling the franchise development advertising budget.
Try these marketing slogans on for size:
“Clean up with a carpet cleaning franchise!”
“Own a shirt business that fits you like a T”
“Own a slice of of the pizza industry!”
Chances are there is a marketing VP patting themselves on the back, wishing they had written these. On the other side of the office the VP of Development is cringing as the read these, seeing yet another example of how marketing to franchise candidates is totally different than marketing to just about anyone else. For decades, franchise salespeople have been held captive by the marketing department, forced to use pretty but otherwise ineffective marketing materials.
VPs of Marketing, designers and most marketing agencies are experienced, smart and capable. They are often highly skilled at consumer marketing and have an essential job in making franchise systems successful. They often don’t, however, have experience working with franchise buyers, don’t typically understand how differently a franchise buyer thinks and may not be able to grasp the scope of information that a real buyer is seeking.
Because of this, much of the franchise development marketing used in the industry is sub-par, off message and generally ineffective. It looks great – may be designed well – but it simply doesn’t do its job. Franchise development advertising: franchise lead generation budgets, portal spends, construction and design of the recruitment website and any messaging that is simply better done by someone who is more specialized in franchise development. The tactics that work well in consumer marketing just don’t cut it when it comes to franchise lead generation.
Often, we see a franchise salesperson get better results with something they create on their own and we almost always see franchise development marketing outsourced to specialists with franchise sales experience these days. That’s a good trend, too. The more buyer-centric the marketing is, the better the sales result will be.
Trend No. 2 – Your recruiting website matters more than anything else in your arsenal: Every year, the role of your franchise recruitment website increases in importance. We live in a connected world, tethered to the internet through our laptops, smartphones and tablets. Regardless of where potential franchise buyers begin their discovery and research, in the end they will find their way to your website — and that’s where the real decision to speak to the franchisor’s recruiter is often made. Content earns the conversation. How much is enough? Have at least 30-50 pages of well written, easy-to-read, and engaging content.
Some “I don’t get it” franchisors think,”I will just whet their appetite for information and give them 6-8 skimpy pages. If they want more, they have to call me.” To those franchisors we recommend that your 800 number is big and visible, and make sure the calls are immediately patched through to your Blackberry. You don’t want to be missing all those calls.
A franchise recruitment website serves two specific purposes: to increase the engagement of interested visitors by satisfying their appetite for information, and to convert as many visitors as possible into leads — actual people your salespeople can start conversations with.
Although virtually all franchise leads carry smartphones (which are not Blackberrys) synced with email, franchisors have found it increasingly hard to reach leads by telephone. Twenty years ago, when franchise salespeople were gatekeepers of the franchisor’s story, franchise salespeople could reach 90% of their leads by telephone. No longer. The franchise lead has fired the salesperson in favor of the company’s franchise opportunity website and other forms of self-directed research. Franchisors struggle now to reach 40% of their leads. Therefore, franchisors need their website to convert unique visitors into engaged leads who are willing to accept the franchisor’s phone call. The more engaged leads are, the more likely they are to fill out a lead form and talk to franchise salespeople. More conversations will ultimately lead to more deal flow.
In 2015 expect 30-50 page content rich, video rich, infographics rich, journalistic story rich franchise opportunity websites will be the franchise industry norm.
Do you still have just a page or pages about franchise recruitment on your consumer site? Do you still have a 5-8 tab, 5-8 page franchise opportunity website? Does your AOL account still inform you that “You’ve Got Mail?” Press the pause button on your Sony Walkman and learn how to best use the World-Wide-Interweb to drive lead generation and franchise buyer engagement. You can access the interweb by using the telephone modem on your Commodore 64. Everybody’s doing it. If you still need help, you can call us. We are in the phone book. AAAAAAAAAAA Franchise Performance Group.
Trend No. 3 – Not all metrics are created equal: Which franchise recruitment metrics really matter in franchise lead generation? There has been a shift there, too. Traditionally, franchise development teams have focused on the following metrics to gauge how effective their franchise lead generation is:
Leads per month
Cost per lead
Number of website leads per month
Average time on site for your recruitment website
Bounce rate for your website
In most departments we’ve worked with, the leadership team starts with a monthly spend for advertising, tallies the number of leads and divides the cost by the number, coming up with a cost-per-lead metric. In addition, if they track website metrics at all, they will look at the number of leads from the website, the bounce rate (how many people only viewed one page) and the average time on site.
Here’s why focusing on these metrics can create a breakdown:
Leads per month is important; a franchise recruiter does need a big enough volume of conversations to make sales happen. What’s really important, though, is the number of applications you get each month. We track raw leads and applications for most clients and break it down by lead source. If you do this, you’ll see that you get regular closes when you get applications in, and that every 8-10 applications will usually produce a closed deal. Tracking applications tells you more about quality and engagement. The lead sources that produce the most applications and closes are not necessarily what produces the most leads.
Cost-per-lead can be a very misleading metric; often higher-quality leads cost more. While it is true that franchise portal leads often average $30-$40 per lead, leads from just about every other source are often much more expensive. And you get what you pay for. It isn’t that $40 leads are all bad – buyers can come from all types of leads – just that $40 shouldn’t be your average cost per lead.
Paid search ads will run from $100-200 per lead. Leads from email campaigns can cost upwards of $250 per lead. Focusing on getting your average lead cost down to portal levels can cause you to reduce the quality of leads you get. Franchise portal leads are great — we have them in every budget we work on — but expect higher cost per lead for other sources and be careful to track how many applications you get from each. You’ll likely find that you have a lower application cost from higher-cost lead sources.
Tracking bounce rates and average time on site is our biggest pet peeve. Average is just that — average. Five percent to 7% of the visitors to your website are potential franchise buyers. They are ready to purchase, have the right skills and are financially qualified. They are not average! If you track — as we do — what these buyers do on your website, you’ll see that they behave very differently. They spend significant amounts of time, visit more than once and read everything they can navigate to. Focusing on the metrics like average time on site or bounce rate can cause you to miss what buyers want.
The changes to your website you can make that improve the average metrics — such as reducing the bounce rate or increasing the overall average time on site — can actually chase buyers away by depriving them of what they need the most. For instance, your marketing department might want to decrease the bounce rate by dramatically shortening the pages so visitors click through to another page. If you are in business to reduce bounce rates, job well done. If you are in business to recruit franchise buyers, you might have starved buyers for the substance they are looking for and even if they click through to another page (thus reducing the bounce rate) they won’t have satisfied their appetite for detailed content about your offering and you will have failed.
We focus on the number of unique visitors each month, the number of web and phone leads we generate from the website and the monthly conversion rate (the number of leads divided by unique visitors). This gives you a much better performance metric, which is, after all, the role of your website — to convert visitors into leads and maximize the number of quality leads you get from it.
We see more companies changing the way they think about metrics for franchise lead generation and expect this to continue in 2015.
Trend No. 4 – Mobile visitors having an impact: Here’s a trend from 2014 that is growing significantly in 2015 and beyond — you will have more mobile visitors on your franchise website than ever before. When was the last time you researched a franchise brand solely from your smartphone? If it has been a while, its time to do it again. If you have never done it, it is time to start understanding the experience.
We saw several of our clients have as much as 60% of the visitors to their franchise recruitment website come from mobile devices. We expect this to continue in 2015.
In today’s market, the best way to capitalize on this is to have separate franchise recruitment and consumer websites and use responsive HTML for your site so visitors get a well-thought-out “mobile” version of your site. Good news: if you invest in responsive HTML (which means the website “responds” to whatever screen size the user has) you won’t need separate themes for desktops and mobile. If your web designer tries to sell you on buying an additional theme or charges more for mobile, tell them 2009 called and wants its website back!
Tablet use began dropping off in 2014, and we expect this trend to continue, fueled largely by the speed increases and larger screens of smartphones. One word of caution: mobile visitors sometimes prefer to opt in via a phone call rather than by filling out a web form. If you have large numbers of mobile visitors, make sure you’ve given them a way to opt in using a phone number that you can track; a phone lead is just as valuable as a web lead. It’s important to understand that franchise buyers will interact with the site long before they take action.
Trend No. 5 – Paid search becomes mandatory: How much of your budget for franchise recruitment is devoted to Google paid search? Google continues to make improvements to the way its search engine works, and paid search is playing a more important role in visibility than it has in past years. A trend we see is increased use and cost of paid search to generate franchise leads.
Do you know what terms your website ranks for, and do you understand how visible your site is for the searches franchise buyers use? Chances are your site is visible for brand-related terms and a small number of industry terms. Chem-Dry carpet cleaning is organically visible for “Chem-Dry Franchise” and for “Carpet Cleaning Franchise.” It won’t rank organically for “cleaning franchise,” “franchise opportunities” or “home-based franchise.” If Chem-Dry wants to create visibility for more terms than Google thinks it should rank for, that’s what Paid Search exists to do.
Paid search is not cheap — cost per lead can range from $100 to $300, depending on the industry — but it produces great results. We see regular closes from the paid search work we do for clients, and we expect the spends on paid search to continue.
Trend No. 6 – Retargeting is the new email marketing: Ever notice ads online or on Facebook for products you recently searched for? Marketing that relates to what a customer is interested in is always more effective. Retargeting is the practice of displaying ads on popular websites to people who have already visited your website but have not filled out a form. It is inexpensive and highly effective, because the only people you spend money to advertise to are people who already know who you are. It’s a very similar strategy to sending an email campaign to previous franchise prospects — it’s a way to communicate or touch a potential lead before you even know who they are. Most internet advertising forms work to help franchisors increase their reach. Retargeting is allows franchisors to now increase the message frequency to those they already reached and may not have responded yet to the message.
Think about it as a new form of targeted email drip campaign.
Trend No. 7 – Social media strategy evolves: Franchise recruiters have just about given up on using social media to generate leads for franchise buyers just when social media has evolved enough to really aid in the discovery process.
Here’s what has changed: social media platforms, particularly Facebook and LinkedIn, have begun offering much more targeted and effective paid advertising. These ads display where people who use social media are looking: in the newsfeed. Chances are, you’ve seen these “promoted posts” and ads in your own news feed. Savvy companies will begin using more of these advertising opportunities in 2015 to gain more visibility for brand content, particularly links to franchise development blogs on recruitment websites.
Likes, views and shares are still important, but what really matters in 2015 is how many visitors social media can send to your franchise recruitment website.
Trend No. 8 – Dealing with phone leads worth the headache: When was the last time you sold a franchise to a lead that originated from a phone call? If you don’t get many calls, you might not remember the last time you sold one. We saw a significant change, though, in leads from the franchise websites we manage in 2014: an increase in phone leads. I know this sounds a bit hypocritical, given how we mocked how franchisors rely on the telephone earlier in the article. However, its important to remember three things.
The article needed some laugh lines and we assumed you had a sense of humor. So how about cutting us some slack?
You didn’t pay for this article, so how about some more slack?
Candidates may call in from their mobile numbers if calling is easier than filling out the form online. On smartphones, a prospect can opt in by simply clicking the phone number. This is a good thing and if you are set up to track and capture data correctly, you’ll increase the deals you do because the person who calls will often not fill out a form. You either work them or you don’t and it’s your deal to lose.
FPG uses tracking phone numbers on all of our sites and keep track of those phone calls. What we find is that mixed in with the junk calls from people looking for jobs, vendors and customers is a sizable number of qualified franchise buyers.
Here’s what caught our attention: If a qualified franchise buyer wanted to talk to a recruiter, they wanted to talk now, not bother with a form.
Leads that originated as phone leads also closed at almost twice the rate — over 2% — as the leads from web forms. Sounds great, right? Think again — inbound phone calls are disruptive to salespeople, who are often caught off guard, and they are difficult for your reception desk to handle. In short, they are a headache, especially if your entire department is structured to work web leads.
We’ve begun using an answering service that collects names, phone numbers, email addresses and states, then either direct-connects that lead to a salesperson or forwards an email with the details for followup. This way, we talk to 100% of the phone leads and glean as much information as possible before routing the call to the salesperson. In the first month of using this system, our client Chem-Dry closed a 3-pack deal to a lead that they otherwise would have missed otherwise. Are phone leads a pain? Yes. Are they important enough to structure a response system for? Absolutely!
Trend No. 9 – Email marketing and “mid funnel” content for lead nurturing: We’ve always been a fan of detailed and lengthy drip-email campaigns. We see these taking on a bigger role in 2015 as many companies stop using online brochures and switch to delivering content via email so leads are “nurtured” throughout the process.
For our clients, we predict much more detailed and strategic email campaigns ranging from a monthly content email to entire drip sequences for each step in the sales process. We use special articles such as “How to Read an FDD,” “Franchisee Validation Best Practices” and “Why Most Partnerships Stink and What to Do About it?” We even have clients designing libraries of content tied to specific objections or issues that salespeople can launch, such as “Patient and Ready to Go! How to Best Manage the Real Estate Process” . The delivery mechanism of these comes with most CRM systems, but the content takes expertise to author and implement. Expect to see this work generate incremental deals and shorten the time to close in 2015.
We find the right content strategy can help close the gap between the average performers and top performers. The top performers are already know how to surface issues most candidates hold back.. Content helps the average recruiter manage hard objections and help the recruiter bring up buried issues.
Trend No. 10 – Portals play a changing role in the discovery process: While we don’t think anyone should soley rely on franchise portals for the bulk of lead generation, we do think portals are more important now than ever before.
Anyone, and I mean anyone — from a first-time buyer to a sophisticated multi-unit owner — uses the internet to do research. Any significant online search will include visits to one or more more portals. It could be because portals spend large amounts on paid search; it could be because portals rank organically for most franchise-related searches. It could be franchise portals offer choice.
Every one of our clients advertises on portals — I can’t imagine a scenario where a growing franchise system would not advertise on portals — but they don’t advertise just to get leads. The better portals will now link to your franchise recruitment website (notice how important having a separate website is) delivering visitors in addition to delivering leads. In this way, portals operate similar to the way Google Adwords does, delivering traffic that your website converts. If you are not using portals to link to your website, it’s time to rethink your portal strategy in 2015.
In addition, portals are an important resource for competitive research — almost all prospects are curious and do research on who the competitors are when they are interested in a franchise concept. If you are not visible, you miss out. Spends on portals may not increase in 2015, but the sales activity you get from your spend should as portals evolve into much more focused lead-generation partners. It’s about time!
What to do with this information?
If you aren’t already implementing these recommendations and taking these trends into consideration when budgeting, you are lagging behind the market leaders. If you have a sold brand with strong unit level economics and trusting franchisee relationships, there are buyers already looking for a business like yours. You need to catch them when they are looking. If you need help, reach out to us 615.905.4768 or firstname.lastname@example.org or fill out a contact us form.