(Lack of) Speed Kills: Maximizing the Value of Your Leads

Resource
Share

Many franchisors operate under the assumption that they can afford to wait to contact their leads, but even the most qualified prospect is less likely to become your next franchisee the longer you delay.

By Tim Gilboy and Anna Flowers

Every year, franchisors spend millions (actually, more like hundreds of millions) of dollars on finding new prospective franchisees. They use nearly every method imaginable, from hosting sales dinners to running complex online advertising campaigns to using third party lead generators. It seems like every few months you read about some new and creative method a franchise development team has come up with.

But what happens to all these prospects once the franchise sales process begins? What sets elite franchise development organizations apart from those that are still figuring it out? We decided to dig into some data as well as run our own real-world experiment to better understand how the sales process can fundamentally change how effectively a franchise can turn their marketing dollars into new franchise units.

Data Analysis: What Separates A Qualified Prospect From A Closed Sale?

FranchiseHelp has access to some tremendous data to help answer these questions. The company analyzed, aggregated and anonymized prospect conversion funnels for several of its partner brands, to see what factors could predict whether or not a prospect would ultimately become a franchisee.

Of course, one of the immediate reasons a prospect won’t move forward in the franchise buying process is that they aren’t financially qualified. But we wanted to look beyond the financial factors, so for this analysis we considered only those prospects who were financially qualified. And when we reviewed the numbers, there was one factor that seemed to make all the difference between a qualified lead who became a franchisee and a qualified lead who did not: speed.
Out of the thousands of prospects across the various development funnels we analyzed, the one constant among leads who moved deep into the sales process is that those winning prospects were contacted and qualified (confirmed financial means and interest) quickly. Nearly 75 percent of leads who submitted an application and over 90 percent of those who ultimately became franchisees had been qualified within three days of inquiring. And this isn’t simply a self-fulfilling phenomenon comparing “real” vs. “bogus” leads: this is among qualified leads only.
But, a franchise sale isn’t exactly a fast process, and a truly interested prospect won’t mind having a little extra time to think – right? It turns out that minutes still count, even in the months-long sales cycles in the franchising world (and other industries with similar long sales cycles). Case study after case study has shown that letting an inquiry linger for days without contact is a sure way to destroy its value. And anecdotally, it’s obvious that people today are busier and more easily distracted than ever before.
The reality is that even when a prospect is genuinely excited about your offering, the window is still remarkably brief for you to connect with them, educate them, and get them moving through your sales funnel. No wonder that one of the biggest differentiating factors between elite franchise development teams and their less experienced counterparts is their ability (whether because of knowledge or because of access to automation technology) to respond quickly to their leads.
Case Study: Real World Lead Follow-Up
To see how franchisors are doing in this area, we conducted another study wherein we examined the initial outreach process of 70 randomly selectedfranchisors buying leads on the FranchiseHelp platform. We set up an email address and phone number for a test prospect, and requested information about each of the franchises using that information (none of our clients were charged for these leads, but there was nothing about the prospect itself to suggest it was a plant). We then recorded when and how the franchisors called or emailed the prospect.
 
While we found that most franchisors would reach out via phone and email, the average call was too slow be maximally effective.
 
Out of the 70 franchises in the sample, only four were in the top quartile for both time to call and time to email. Nearly 25 percent of the franchises were in the top quartile for either email or call speed, and in the top half for the other. These franchises (shown in green in the chart below) are the ones we identified as the “elite” franchise development organizations. All the elite franchises identified in this study were using some form of email automation to deliver the first email within minutes of a prospect expressing interest in their franchise.
On the other end of the spectrum, 23 percent of the franchises in the sample were in the bottom quartile for either email or call speed, and in the bottom half for the other. Two franchises took over an hour (and in one case 10 hours) to email the prospect and never called at all. These franchises clearly lacked some of the development structure of the “elite” brands.
The bulk of the franchises we looked at, though, fell somewhere in the middle They were either very effective at calling or very effective at emailing, but not both. Nearly all the franchises in the sample had room for improvement in at least one of the categories we examined.
Many franchisors operate under the assumption that they can afford to wait to contact their leads, because the truly qualified prospects will still be interested when they do get in touch. But the data reveals that even the most qualified prospect is less likely to become your next franchisee the longer you delay. Waiting hours or days to get in touch simply results in wasted money, wasted prospects, and missed development targets.
If you haven’t yet set up both automated email and text messaging to engage all your incoming leads, that’s an easy and inexpensive place to start. Your sales team can use the time this saves them to call their leads – and close more deals – even faster. If you have questions about our studies or your own development process, feel free to reach out at www.franchisehelp.com.
 
Tim Gilboy is the General Manager at FranchiseHelp. He holds a B.S. in Chemical Engineering from Columbia University. Anna Flowers is a Digital Marketer at FranchiseHelp. She holds a BA in Classics from NYU.

Search