The title of this article is a reference to caged canaries that miners would carry down into the mine tunnels with them. If dangerous gases such as carbon monoxide collected in the mine, the gases would kill the canary before killing the miners, thus providing a warning to exit the tunnels immediately. The information in this article stands as the proverbial canary in the coal mine, serving as an early warning system on what might potentially be killing your closing-effectiveness rates.
In the recently published FranConnect/IFA Franchise Sales Index, a study of 487 franchise brands’ efforts and results in the generation and conversion of leads that become franchisees, some incredibly telling insights were identified that can have a significant impact in improving franchise sales conversion rates. This is the first in a series of articles that will highlight those insights and best practices uncovered in this analysis of big data coming out of this 2017 study.
The FranConnect/IFA Franchise Sales Index is based on the actual assessment of performance data found in the largest sampling of brands to date. It has been anonymized, aggregated and segmented by industry type and system size.
Beyond the Index, we surveyed 600-plus franchise brand leaders and franchise sales professionals, and 46 percent of respondents indicated that they were failing to hit their franchise sales performance quotas. In that same poll, we asked respondents to identify what their top franchise sales challenges were, and the responses indicated:
Lack of budget, and
It is my contention that with over 600,000 leads processed through FranConnect’s system in 2016 across 487 brands utilizing the company’s Franchise Sales Management CRM, the problem is less about the shortage of leads. While I’m certain that the quality of leads is always an area of opportunity, there’s no such thing as the ideal lead, and all leads will need to be coached through the process to some degree.
The focus of this article is on the oft-ignored area of lead nurturing and lead management.
As a point of beginning, the data reveals that franchisors are only closing 1.2 percent of deals that enter the funnel. Is the problem that there aren’t enough qualified leads? Or perhaps the challenge is the lack of discipline in pipeline management? We believe that the answer is likely in both areas, but this article will focus on the metrics associated with response times, call and activity reporting and CRM maintenance and lead hygiene.
With an average closing rate of 1.2 percent (100 leads = 1.2 deals), it is my contention that a franchisor that’s buttoned up in these following areas can realize an improvement to at/above 2 percent closing effectiveness.
Here are seven best practices to focus on today.
1. Speed to the lead.
Waiting just one day can reduce the likelihood of the lead to convert by up to a factor of 3.5 times. That means for every hour you wait, you’re losing franchise sales. Not only are you providing a window for the competition to set in, you’re also disappointing the prospect’s expectations.
Most of your leads will come from the internet, which moves at the speed of light. Because information moves so rapidly in today’s digital world, your leads have short attention spans and high expectations. We’ve all been conditioned that when you make a purchase on Amazon, you receive an email confirmation immediately. It’s a simple, automated process, but it solidifies the relationship. And, let’s face it — it’s the speed that consumers expect.
We find that the highest producing brands have a standard of response within 30 minutes of receipt.
2. Initial contact is the single most important moment of truth.
In Jan Carlson’s book, Moments of Truth, he told the story of how customers of Scandinavian Airlines equated the coffee stain on the back of the customer’s seat-tray as being an indicator of faulty-engine maintenance. They would reason that if maintenance couldn’t clean something as simple and obvious as a coffee stain in front of their paying customers, they are likely missing the more complex and critical things “under the hood.” In the case of franchising, the initial contact can be a challenge to manage, but it must be done so thoughtfully. As an example, if initial contact comes in the form of a white paper which drove the lead to your landing page, following up with a phone call asking “What did you think of that white paper?” within 60 seconds would be a mistake. Obviously, someone can’t read an entire white paper in under a minute.
But automating an email delivery — one with a contact name and phone number — is a great way to confirm to the lead that he has entered your lead process.
3. All that lead generation effort, and no follow-through?
This strikes me as the most disturbing portion of this whole article. With a cost of lead generation that is approximately $100, is it possible that so many leads fail to receive any initial phone call, email or tasks set resulting a squandering of precious franchise sales department marketing budgets? The answer is “absolutely” and it’s absolutely unforgiveable and preventable.
You might conclude that in many cases, franchise sales professionals are simply failing to log their calls, but if they aren’t logging calls, they’re also failing to log any records of having communicated by email, and failure to log tasks and next steps. This data is critical for giving attribution to the effectiveness of the initial lead source, assuming that anyone ever contacted the lead and where individuals are stalling in the sales process or falling out.
On the other hand, can you be 100 percent sure that leads aren’t simply falling through the cracks? To change the behavior, once again, department leaders and executives must adopt the attitude that if it’s not in your sales CRM, it never happened and act accordingly.
4. Keep your prospects engaged with lead nurturing.
Email lead nurturing is simple. Using emails, you can confirm, follow up and engage with leads. Automated processes make email lead nurturing simple. And with an even greater open/read rate, SMS/MMS text campaigning is becoming the gold standard when it makes sense to utilize.
Remember that communication is key to nurturing leads through what can often be a long process. Beginning that communication immediately sets the tone for all future interactions. However, our findings indicate that too few franchisors are running email or text campaigning beyond one to two initial drips in the “new lead” status.
5. Targeted and relevant content creates forward momentum.
Developing content and utilizing it based on the stage of sale is an opportunity to influence the prospect’s decision by showcasing your company’s leadership and expertise. Your specific stage in the sales process allows you to segment your messaging and deliver targeted content with clear calls to action. Envision the impact of utilizing a campaign around “how to read an FDD” or “how to prepare for your Discovery Day” when a prospect has been advanced to each of those stages of the sales process. Imagine having a series of video-campaigns featuring highly-satisfied franchisees bestowing praise on your team, fellow franchisees and the brand during the “validation stage” of the sales process? The beauty of an effective CRM is that you can automate your workflows so that relevant messaging can even be dispatched, not only based on advancing someone depending on stage of sale, but even to send relevant content based on lead origin (such as messaging that goes to someone that attended a specific IFE expo) along with the frequency and type of messaging you’d like them to receive (i.e., email campaigning every Wednesday for the first three weeks, followed by a text message to be delivered at 8:00 p.m. on the fourth Monday of the month).
6. Align your marketing and sales teams.
For some reason, there appears to be a clear separation between the sales and marketing teams. Perhaps this is a “hands-off” mandate as franchisors are concerned that the franchisee-funded advertising fund not have the appearance of impropriety as marketing team members are often paid from the fund. However, without connectivity between marketing and sales, you have a “receiver” without a “quarterback.” Both department’s team members should know the plays before the game even begins. Establish a mutually agreed upon marketing-sales lead-response time to work leads efficiently. Allow both teams access to a centralized database of customer contacts and marketing and sales activities. The more visibility and insight each teammate can provide about the prospect, the better your chances are of garnering interest and closing. It’s worth noting that keeping great lead data can enable various team members to efficiently interact with leads and marketing cost tracking, KPIs and dashboards which are key to knowing what lead sources and content to starve and which to feed.
7. Keep your data clean
Inaccurate data is costly, and can lead to prospect attrition, reputation damage, and lower conversion rates. With quality data, you’ll be able to determine the effectiveness and weaknesses of your sales and marketing activities.
Here's a common scenario: A franchise sales director meets a prospect at an IFE conference and enters that person's information as a lead in the franchise’s CRM. The same person then clicks on a portal listing, which takes him to a landing page which form he submits. You've now got a duplicate lead.
What to do? Ask your sales team to use the “Find Duplicates” button frequently to find and resolve duplicate leads. Also, explore the following ways to keep your data clean:
Clean your leads regularly: Despite your best efforts, data will get “dirty” because of prospects' job changes, human error, and duplicate or incomplete submissions. Check out the data-cleansing tools in your CRM to help with your de-duplication efforts.
B. Use validation rules: You can create a rule that prevents leads from being converted if no email address was entered or if its customer's need has not been defined.
In conclusion, leads are the fuel that keep your business running. In some very literal ways, leads are the future of your business. But not all leads will be equal. Some will be sales-ready and others will be marketing-qualified. And, of course, there are many leads that fall somewhere in the middle. Lead nurturing and management is simply the art of finding out which leads fit into which categories. There are many ways to accomplish that, such as using analytics and an effective franchise CRM system.
The beauty of effective lead nurturing is that it gives you the opportunity to calibrate your response to each individual lead, therefore increasing the chances of a successful conversion. Lead nurturing can also make your entire franchise sales operation more efficient. Following lead nurturing best practices will allow you to allocate resources based on likelihood to convert and what the lead needs to convert.
The more information you have at your disposal, the better position you’re in for the long term. If you want to know more about how to increase your franchise sales closing effectiveness, sign up for the 2017 FranConnect/IFA Franchise Sales Index. All proceeds go to the IFA’s Franchise Education and Research Foundation, www.franchise.org/foundation
Keith Gerson, CFE is President & Chief Customer Advocate of FranConnect, a leader in franchise management technologies and franchise best-practices. He is a 40-year franchise veteran, a frequent lecturer, author and thought-leader who enjoys helping franchisors achieve their next-level of success.