Even as the health-related stories about the pandemic continue to evolve, the business world faces a common challenge: moving forward. Most organizations have already realized that they can’t sit back and wait. They have to put plans into action and adapt quickly as necessary. The world of franchise sales faces its own set of challenges, but also some great opportunities. As we have reached the midway point of 2020, now is a good time to zoom out and consider what you must do as franchise leaders to ensure your development efforts continue to drive growth. Here are my Top Five Must Do’s for Franchise Sales Leaders now that we are halfway through this unforgettable year.
1. Hold Your Team Accountable
According to a June 2020 poll conducted by the U.S. Bureau of Labor Statistics, and as reported by Statista, 20% of U.S. adults were working from home during the COVID-19 outbreak. In addition, 13.3% of Americans were unemployed. Two key takeaways were that for many industries, there were record levels of people interested in owning their own business, and there had never been a better time for reaching people at home. The problem is that according to FranConnect’s 2020 Franchise Sales Index Report, 74% of new leads were never called by franchisors. Conversely, we found that 85% of franchise deals were those that were contacted within 4 hours or less. At the cost of nearly $200 per lead, according to Franchise Update Media Group’s annual franchise sales study, this represented substantial wasted franchise sales budget per brand.
What’s one to do? The head of franchise sales departments need to do a better job in tracking their employees’ contact rates and response times. An effective franchise sales system can ensure that this information shows up in real time on a command center based on role, such as VP of Sales or Franchise Sales Manager. Nothing creates greater focus on what’s important than publishing performance rates by team member.
2. Starve the Things That Aren’t Working and Feed the Things That Are
An example can be found in the category of franchise portals. We found that the average closing effectiveness rate of portals was only 0.32%, meaning that it would take approximately 300 leads to culminate in one sale. However, further analysis of each portal serving a brand could reveal much stronger individual performance. Portals can be effective both as a virtual billboard helping prospects in their online research and in creating incremental deals.
3. Know That Recognition Beats Compensation When It Comes to Referrals
In analyzing lead-to-deal conversion rates by marketing source, we found that referrals resulted in the highest conversion rates at 6.60%. Yet very few franchisors are able to change the behaviors of their franchisees when it comes to making those referrals. FranConnect recommends one or more of these practices:
- Send videos that recognize franchisees who help your system grow.
- Craft ongoing campaigns that reinforce the “why” behind the referral program.
- Offer a “rainmaker” plaque or award on stage at annual conventions.
- Include franchisees who refer candidates that join your system in recognition programs such as a Chairman’s Club.
4. Adopt the Rule of Seven
All of your hard work and efforts to attract great leads to the top of your sales funnel are for naught if you don’t have an effective program in place for nurturing those candidates through the sales process. The “Rule of Seven” states that it takes an average of seven interactions with your brand before a purchase will take place. Interactions can include a call from franchise sales managers, reading a review, receiving emails, and content that enables the buyer’s research. Our research showed that only 25% of franchisors had campaigns established for new leads, and only 15% were sending campaigns to leads moved to dead-lead files.
Doing this requires a robust CRM that is actively used and maintained. Franchise marketing and sales teams need to use a mix of personal and automated outreach before abandoning a lead. High-performing sales development teams typically aim for a minimum of 7–12 touchpoints.
5. Tighten the Screws on Your CRM
Final recommendation: if it isn’t in your CRM, it never happened. Most salespeople are driven by human interaction over data entry. Incomplete data entry can cause your brand to lose valuable information when a salesperson is unavailable or leaves the company. Lead intelligence is vital, and sometimes the salesperson even forgets what was discussed with the prospect once a couple of months have passed.
To achieve each of these recommendations, the head of sales needs to set the proper tone and expectations. Ensuring that your sales teams have all the knowledge they need in one place and the ability to be more productive with both the lead and their calls is the way forward.
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FranConnect is the recognized leader in franchise sales management software. The takeaways in this article were influenced by the FranConnect Franchise Sales Index 2020 Report. Explore additional research in our resource library.
Regardless of how your franchise business has been impacted, it’s important to ensure that development, operations, and marketing are working together. If you’d like to talk to one of our experts, request a demo.
