In the first two installments of this series, we shared how to engage your franchisees in planning for the upcoming year and how to evaluate your current franchise technology. In this final post of the series, we’ll explore how to boost and track franchise sales leads.
While 2020 saw an overall decline in franchise leads — which isn’t shocking, given the circumstances of the year — you may be surprised to find out that the number of deals is trending upward. For franchise brands looking ahead to 2021, that’s great news. With the right plan in place, you can pursue franchise growth in the upcoming year.
To achieve that growth, you’ll need to focus on generating quality leads, following up on those leads appropriately, and tracking your metrics to ensure that you’re getting your desired results. As you continue planning for the upcoming year, keep these considerations in mind for enhancing and tracking your franchise leads.
1. Track the right franchise sales KPIs
Warren Buffet once said, “You only find out who is swimming naked when the tide goes out” — and the coronavirus pandemic has taken the proverbial tide out about as far as the eye can see. With FranConnect’s access to over 800 franchise brands worldwide, we have found that going into 2020, there were many “naked” franchisors squandering their costly franchise leads. In fact, our data shows that 72 percent of franchise leads never received a call.
Another critical KPI to consider is initial response time. Our data shows that 85 percent of the leads that resulted in sales were those that were responded to in four or less hours from inquiry, proving that speed to the lead is critical.
Additional KPIs that are critical to know are those of cost per lead and cost per sale by source. With an effective franchise sales CRM, you’ll have the ability to input your marketing spend, and the technology will generate your costs as leads populate and deals close. It’s important to know your metrics so that you can do more of the things that are working and avoid the things that aren’t working.
2. Leverage your promoters
The top two sources of franchise deals in Q2 and Q3 2020 were from two forms of referral sources:
- Franchise referral consultants (i.e., brokers)
- Organic referrals (e.g., family, friends, associates, and customers)
In the FranConnect Franchise Sales Index report from the first half of 2020, we found that franchise referral consultants (brokers) were the only lead source that saw an increase above pre-COVID-19 results, coming in at 5.3 percent. This equates to an average of 20 leads per sale. The second-highest source of leads that became sales were organic referrals, with a lead-to-deal ratio of 4.9 percent, translating to slightly over 20 leads per sale. Those franchise referral consultants produced 21 percent of all deals, and referrals represented 17 percent of sales, consistent with Q1.
Research has shown that referral marketing, when done well, can typically result in a 10 to 30 percent increase in sales. Nielsen’s Global Survey of Trust in Advertising survey highlighted a notable growing trend: Consumer trust in traditional advertising channels has markedly decreased, while personal recommendations among customers is far and away the most trusted advertising format. Personal recommendations didn’t just edge out all other options; they dominated with an 81 percent vote of confidence, compared with consumer online opinions, which trailed at 58 percent.
Rest assured that mastering the generation of referral leads on many levels is simpler than it seems. Franchisees want their system to succeed. Start by letting your franchisees know why referrals are so important to all franchisees (as the saying goes, “A rising tide lifts all boats”). The fact is that many of your franchisees have been touched by the tireless efforts of their franchisor and would likely validate or refer if asked. And it’s never been easier to mobilize your franchisees to give testimonial videos with the pervasiveness of high-resolution mobile phones. All you have to do is ask.
Consider putting a referral program in place that capitalizes on giving recognition, whether it’s a shout-out from the CEO in your newsletter or a “rain maker” award handed out during your virtual events in front of the franchisee’s peers. When the ability and willingness to travel returns, consider a special CEO event where your franchisees and significant others can join other award winners at a resort for helping your brand to grow. I’ve found that this goes a lot further than simply handing out a check, which rarely drives the desired outcome.
To achieve growth in 2021, you must have a plan for boosting, pursuing, and tracking leads. To learn more about the most effective sources for leads and deals, as well as insight into how to improve your sales effectiveness, download “The FranConnect Franchise Sales Index Report 2020.”