Creating a Cost-Effective Lead Generation Strategy

For many franchisors, the traditional vehicles - portals, print PR, and broker networks - do not appear to be working as effectively as they were five years ago. We predicted the slow decline of these once-proven vehicles in our white paper, "The Future of Lead Generation: 6 Big Changes Which Will Alter Franchising Forever," available as a free download. Since we've already written a detailed paper on this topic, we won't rehash what we still believe to be highly relevant information. Instead, we will focus only on additional insights we've had since the paper was published a few years ago.

For those who have read the paper, you may remember we took issue with franchise portals for not doing more to provide franchisors with better educated, more informed, and buyer ready leads. Since then we've spoken with owners or representatives of most of the major franchise opportunity portals about our assertions. Almost unanimously these spokespeople said, "We are in the business of generating contact information. Franchisors need to be in the business of creating franchise buyers." Based on these comments, over the next several years, we can expect more of the same commitment to gathering contact information from franchise opportunity portals without any thought about where these people are in their decision-making process.

Referring back to our FPG Franchise Buyer Decision Funnel, franchise opportunity portals intersect with most people when they are early in what we call the Entrepreneurial AHA! stage or transitioning into Data Gathering, a stage when most candidates aren't yet ready to talk to the franchisor's representatives.

Many franchisors have either abdicated their responsibility or are unaware of their need to create online content intended to move leads into Engagement, where they are prepared to have at least one open, robust conversation with a recruitment representative. Hats off to the franchise broker community, which has structured a business model that bridges this gap, collecting $25,000 commission checks in the process. As former COO of one of the largest broker networks, I remain a huge fan of the broker channel and believe they perform an invaluable service. But I also believe too many franchisors have created a dependency cycle on broker leads, driving the typical commission check up from $8,000 in the year 2000 to well over $20,000 in recent years.

While broker networks remain an important part of the total franchise candidate lead generation mix, I would never recommend they be the only ingredient.

We don't believe franchisors are doing enough to help their own lead generation causes. Before 1990, before the Internet had any impact on lead generation, half of all new franchisees would learn about a franchisor through some previous connection to the brand. The new franchisee could have been a friend or family member of an existing franchisee, a satisfied customer, or an intrigued supplier. As franchise opportunity websites and broker networks gained influence, franchisors became more reliant on this consistent and seemingly effortless influx of leads. In the process many franchisors have lost their ability to reach out and actively network for new franchisees. Why learn to fish if the fish are already jumping in the boat?

But the fish aren't jumping as often as they used to and smart franchisors are going to relearn how to fish. There is one large pool in which all potential franchise candidates swim: the Internet. And intelligent, meaningful, relevant, and entertaining information is the bait.

Internet guru Scott Klososky told Thomas Scott, CEO of Brand Journalists, that potential buyers are no longer passive recipients of data and information. They actively seek out "streams of information" about the people, companies, and topics they are interested in. Although experience would tell us the fish are always biting on information, it seems few franchisors have figured out how to bait their hooks.

Many franchisors are failing to give candidates what they really want, which is information they can trust. We already have seen the beginning of the end of hyperslick franchisor websites and sugar-coated PR fluff pieces as we knew them.

Someone recently sent me a link to what he called a "cutting-edge, next-generation website." As the website loaded, a video of an actress up and she began introducing both the website and the franchise opportunity. It was painfully obvious she was reading copy from a teleprompter instead of speaking from the heart. Not only was this website not "the next generation," it was designed from an old, tired, failed franchise sales paradigm that believes candidates still want to be sold a franchise and will believe the franchisor's hype about itself.

Here is a marketing tip. Candidates don't want to visit websites and find some plastic, untalented, never-was, "B movie" video talking head regurgitating mindless "Be your own boss" and "Take control of your life" catch-phrases with fake enthusiasm. They want information they can trust, written and spoken by people who are the real deal, not an affected performance by a washed-up tinsel town reject looking to make a few extra bucks between "straight to DVD" zombie movies.

Does anyone really believe any intelligent franchise candidates are going to be induced by some previously recorded video infomercial host to roll the dice with their family's financial future? How much more impact would the video introduction have had if the introduction was an unpaid endorsement from successful franchisees speaking from their hearts about how they transformed their lives by joining the franchise?

It's time for franchisors to acknowledge that candidates already know the difference between authenticity and slick (and worse... amateurish-pretending-to-be-slick) salesmanship. They desire straight feedback about who the franchisor's customers are and why they shop their business. They wish to learn how the business works and what it takes to win - before they talk to a franchise sales representative.

Joe Mathews is a founding partner of Franchise Performance Group, which specializes in franchisee recruitment, sales, and performance. This article is from his free, downloadable e-book, The Franchise Sales Tipping Point: 10 Keys to Creating a Franchise Sales Breakthrough. Contact him at 860-567-3099 or

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