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In any business, the first contact with a customer is crucial. Arguably, the initial moment of connection means more today than in years past because expectations have increased in this era of personalization.
Franchise Update’s annual Mystery Shopping study knocked on the proverbial front doors of 92 brands to find out how they responded to queries from first-time qualified prospects. The best performers were celebrated in October during the 2024 STAR Awards ceremony at the Franchise Leadership & Development Conference in Atlanta. See page X for the winners.
“Companies use mystery shoppers all the time. I’ve used them over the years,” says Carrie Evans, CDO of Dine Growth Group. She conducted the 2024 website shop.
Jayson Pearl, president of ServiceScore, and his team researched online form submissions and did the telephone shop. It was nothing new for his crew because they mystery shop for a living on the consumer side. For this mystery shop, they posed as qualified prospects. “We submit a lead for an open territory and tell them we’ve got enough money,” Pearl says. “Then we gauge how long it takes for them to make a phone call, send a text, or send an email.”
There were a few changes to this year’s STAR Awards and the mystery shop. An advisory committee suggested that a distinction be made to provide mystery shopping results that compare brands in similar investment categories:
The committee decided that since not all companies include telephone numbers on their websites, the telephone shop would only be used to break ties. Organizers also decided not to conduct a social media shop this year because a number of brands don’t use social media in their franchise development efforts.
How did first contact go? Read on to find out.
From Aug. 1 to Sept. 13, a fictional character named Shane Harrington was submitted as a qualified lead at 92 websites. Pearl and his team then waited to see how long it would take a recruiter to reach out by phone, text, or email.
“The headline is that the numbers improved this year,” Pearl says.
Half of the brands that were contacted followed up on the lead. Of those, 68% called within 24 hours of the submission, 56% called within eight hours, 12% called between eight and 24 hours, and 33% called after 24 hours.
The overall 50% response rate was an improvement over 2023’s mystery shop when 41% of brands followed up with the lead. In 2021 and 2022, 55% of brands called back.
While Pearl wasn’t sure what led to the increased responses, he had suggestions. “Many franchisors are saying it’s a tougher selling environment,” he says. “Maybe there’s more discipline, or maybe there’s just fewer leads.”
The numbers back up what franchisors told Pearl about the selling environment. According to Franchise Update’s 2024 Annual Franchise Development Report (AFDR), the cost per lead has increased from $97 in 2021 to $271 in 2024, and the cost per sale has increased from $9,370 to $13,757 over the same period. See page X for a breakdown of the AFDR.
Returning to the mystery shop numbers, 50% of the brands contacted sent a text to the lead. That breaks down to 35% who sent a text and made a call and 15% who only sent a text.
When a call was scheduled with the shopper, 93% of recruiters were available for the call. That resulted in a 7% no-show rate, an improvement over 2023’s rate of 11%.
The reduction in no-shows could come down to old-fashioned hard work, but Pearl also suggested that brands are becoming more familiar with using AI and other technology. “It could be the CRM system, the calendar they use, more diligence on the part of the individual salesperson, or all of the above,” Pearl says.
A 7% no-show rate leaves room for improvement, so it makes sense to conduct regular audits of the technology surrounding prospect recruitment:
Technology can help deliver personalized responses to prospects, but it’s also important to remember the human element. “You’re trying to differentiate your franchise brand on your fantastic support and the great leadership team that you have,” Pearl says. “That starts with that first inquiry call. That’s the first human-to-human interaction, where you start to feed the bulldog.”
Evans conducted the 2024 website shop over four weeks in August and September. She visited 92 websites to see if they provided the information that would propel prospects to contact a recruiter.
“People nowadays are so used to just scrolling on their phones and getting the information that they need quickly,” Evans says, “and I think that a lot of company sites are moving in that direction to make it more user friendly so that the prospect doesn’t get bored and lost.”
Each site was judged in five categories:
Each category was worth one point, but Evans expanded three of them. For example, if a company had a corporate video on its site, that counted as half a point. A testimonial video made up the other half.
“The prospect determines the health of the organization by how satisfied the existing franchisees are. Most prospects go out and do their own research on the internet,” she says. “They already have the answers that they need. They want to specifically get to the franchisees as fast as possible to understand how happy they are, whether or not they’re profitable, and if they had the chance to do it all over again, would they sign up with this brand?”
She discovered that 60 of 92 brands did not have a franchise testimonial video on their site. In her previous role at Chicken Salad Chick, she interviewed franchisees at the brand’s annual conference. “I feel like having franchisee testimonials on the site cuts to the chase,” Evans says.
During her shop, she split the investment details category in half. First, she looked to see if the brand included the total investment range a prospect could expect to spend. That was half a point, and the other half was based on providing an Item 7 breakdown from the FDD.
Candidate quality also had a split. To get a full point, the site needed to provide the prospect with financial requirements as well as the brand’s archetype of ideal candidates.
The inquiry form and a list of available territories each counted for one point. Evans says she was shocked by the number of sites that didn’t have a page dedicated to territories. “I couldn’t figure out why,” she says. “It was a missed opportunity.”
Franchisee satisfaction scores were not included in the mystery shop, and only two out of 92 brands included links. “The data that is collected on those surveys is extremely powerful. Alongside the franchisee testimonials, they kind of go hand in hand,” she says. “Brands don’t use that content as much as they could.”
During her investigation, Evans found 12 brands that earned every available point. That leaves 80 other websites with room for improvement.
Evans says she appreciated the experience of looking at so many websites. When she accepted the role of mystery shopper, she hadn’t yet moved into her role at Dine Growth Group, which owns East Coast Wings + Grill and Sammy’s Sliders.
“I knew that I was going to be working with brands that either didn’t have a franchise site yet, and I was going to help them build it,” she says, “or their franchise site was built ten years ago, and it needed to be revamped. I was taking in all the information from the top-scoring sites and making notes about what I wanted to do with my current brands.”
As mentioned, the importance of the annual telephone shop was reduced this year because not all brands have telephone numbers on their websites. Phone call responses were only used for the STAR Awards if there was a tie. Pearl and his team at ServiceScore made the calls. Here’s a breakdown of the results:
Pearl says multiple brands have reached out to see how their companies performed during the first-contact mystery shop. Leaders see it as a way to examine and streamline processes to be more responsive in the future.
“What you’re trying to do is break down the barriers between the companies and their potential franchisees. The idea is to make the process as smooth as it can be all the way through,” Pearl says. “You’re bringing somebody in to serve a customer, so you want to treat them the way that you want them to treat your customers.”