Developmentally Appropriate: Best Practices for Creating a High-Performance Sales Team

Truly great franchise sales and development teams are hard to find... and can be even harder to create. For franchise sales executives, attracting the right mix of people, passion, and experience, along with creating a positive culture and providing the right mix of recognition and reward, it's a delicate balance. Achieving that balance means the difference between a marginal brand and a great one.

"People create performance, performance creates profit," says Robert Stidham, president of Franchise Dynamics, a sales outsourcing firm. "The best results come from hiring the best people, giving them the right resources, and managing them for performance, effectively."

Building a high-performance franchise sales team takes time, effort, dollars, and an knack for training and managing talent. Below are the insights and experiences of five franchise executives who have spent years crafting successful franchise development teams. They've had their share of ups and downs--and lived to tell the tale of how to build a successful franchise development team.

Culture as cornerstone

Tutor Doctor started in 1999 and has been franchising since 2004, providing one-on-one home tutoring services. The Toronto-based brand has about 240 franchise territories under development in the U.S., Canada, and the U.K. In 2008, Tutor Doctor was re-launched with a new growth initiative, and about a year ago James Channer was brought in to lead global franchise development. Channer, with 12 years of franchise sales and management experience, set about creating a culture of success within the development team.

Channer knows what he's looking for in building a development team, and culture is one of his cornerstones. "We seek those who are similar in mind state and emotional state," he says. "By this we mean they operate from a centered approach. It's very important that our development team members believe they are part of the company's mission, which is to make a difference in the lives of families around the world."

For Channer, it's about more than just franchise sales. The mission of the brand comes before egos and individual team members. "We are the chosen ones who have the responsibility to reflect our culture to those seeking to be part of something bigger than themselves. That's why we are very selective in who we recruit to become part of our development team."

In addition to Channer, the development team consists of seven people; and except for Channer, none are based in the Toronto headquarters. Instead, they're spread across the U.S., U.K., and as far as Costa Rica in a decentralized approach he says works effectively for the brand. "We don't view geography as a limitation," he says. "If the person is the right fit and they have the level of accountability we look for, then it doesn't matter where they work."

Despite the team's geographic spread, he says a spirit of camaraderie is evident in the Tutor Doctor model, a spirit that has helped build a strong development team. "Everyone shares wins; everyone shares stories and books we are reading. We have brainstorming sessions and we talk with other companies. We listen to the feedback candidates provide when they interview to become a franchisee."

Technology plays a key role in the development team's success. Channer says the team is able to communicate regularly using tools such as Skype, along with other online multimedia resources.

Reward and recognition also play a critical role. Recently, one of Tutor Doctor's team members sold 50 franchises in less than 18 months, which qualified him for recognition by the organization's "Star System." Winners are recognized by the company's president, which is recorded and uploaded to YouTube for the rest of the team to see.

Channer is quick to point out that without strong leadership, no development team can ever be completely efficient. He says that comes through having a clear vision, an alignment of core values, and the awareness of how the franchise is doing in every aspect.

Having a great concept with sound leadership is an obvious ingredient for successful development, but there's more, says Channer. "You need a foundation. It's not about just being a hot concept, you need substance and people that are real," he says. "The comments we receive from candidates about our people are the most rewarding to me. They respect how they've been treated and how thorough we are in our selection process." And many become franchisees.

Hire the right people

"Eighty to 90 percent of the formula for creating a high-performance sales team is hiring the right person in the very beginning," says Shelly Sun, co-founder and CEO of BrightStar Care, a full-service health care staffing concept. "That means people who share your values, passion, and work ethic."

Likewise, she says, it's important to make members of the sales and development team feel valued and a significant part of the company. "We want to provide the opportunity for growth for those who excel," she says. "That's one of the reasons we just introduced a stock option plan--so our team members can be a part of owning this company they are contributing to every day."

At BrightStar, the development team consists of two sales people who handle broker-generated leads, plus a third who handles all other leads. None work in the corporate office. The company also employs a full-time sales qualifier who prescreens leads. This helps the sales team improve their effectiveness, says Sun, and is well worth the cost. "We see our sales qualifier as an investment and not an expense," she says.

Sun says the company provides its development team with the best resources possible. "We use all kinds of training and share best practices with them regularly by bringing together the whole team for two-day franchise development training sessions every quarter."

The company has also created SBA financing programs, which Sun says supports the sales team by taking the access-to-capital issue off the table for qualified candidates, another way to make the sales process quicker and more efficient.

Compensation is always a hot button in recruiting and retaining top sales people. Sun says BrightStar has no qualms about paying its team members well. "We review the FRANdata Compensation Report each year to make sure we are a top payer," she says. Beyond that, the company has devised a compensation plan that fosters a team environment.

"Our plan rewards our broker and non-broker sales people for driving leads that benefit everyone," she says. Sales people are also paid a commission based on a percentage of the net retained franchise fee. Also, says Sun, the company is open to flexible compensation packages and will structure unique compensation packages in ways that fit the different needs of its sales team. Finally, there's a quarterly reward program in addition to base pay and commissions based on individual and department goal achievement.

"We are always looking for new ways to do things that keep the pipeline of leads open for our sales people," she says. "Whether that's increasing our marketing budget each year or relying on great technology tools, we're looking to create an open, collaborative effort that really benefits everyone."

In 2010, BrightStar's development department was responsible for 72 new franchise agreements and 40 new franchisees (as of late December). The target for 2011, says Sun, is 86 new franchise agreements and 66 new franchisees.

Challenging tradition

After 10 years as a regional manager for Oklahoma City-based Express Employment Professionals, David Lewis was brought in this past September as executive director of franchising. As such, he knows what kind of franchisee the company is looking for, what kind of sales person it takes to recruit those franchisees, and is wasting no time in adding his own touch to the sales process for the company, which he estimates will finish 2010 with $1.9 billion in system-wide sales.

"I just hired two lead generators to make cold calls for us," he says. "We don't want to rely exclusively on brokers, and this way we have two people making thousands of calls each month in what I call a strategy of proactive lead generation."

Lewis says a high-performance sales team begins with clearly defined goals and objectives--"and not being afraid to challenge conventional thinking to achieve them." In fact, he says, creativity should be more valued than following old protocols. "New ideas and experiments are welcome here and I back my team up when they want to try something. I'll even take the arrows in the back to support them, if necessary."

This former executive recruiter says he's working to create change in some of the 25-year-old brand's more traditional approaches and create a fresh, new energy for the sales and development team. "One of the strategies we're trying to implement is a shift away from screening out candidates to one of screening in candidates," he says. He explains that in many cases he'd rather meet candidates before they answer lots of screening questions, because he can often discover what he's looking for right up front in a face-to-face meeting.

His development team includes two sales directors, three sales support staff, the two new lead generators, and himself. Beyond the centralized team in at corporate, Lewis also works with 34 developers across the U.S. and Canada, 17 of them franchisees in their own right. "We're really looking for innovative and creative ways to increase our lead flow," he says.

Lewis says it's important for his team members to fit the company's work ethic, integrity, and culture. With these core values in place, he says, "We're looking to empower our sales force by giving them the freedom to innovate, create, and look for new ways to identify and close leads." He says the organization offers a flat structure where "everybody has the chance to excel."

Also, he says, a culture of success is not about sales superstars. "If you depend on one or two big hitters, you'll ultimately push down the other team members, and you want everyone to produce. That's the collaborative sales approach."

Change agent

2010 was a year of change at Fastsigns. The Carrolton, Tex.-based company rolled out a strategic change in its sales approach and hired Mark Jameson as senior vice president of franchise development to make it happen. The company refocused its recruitment effort to target independent sign shop owners and convert them to Fastsigns franchisees. The new approach is working, according to Jameson, who says a slow 2009 gave way to a busy sales year in 2010.

"We have undergone a change over the last year that's taking us from a reactive approach to sales--traditional web- and phone-driven, trade shows--to more of a proactive approach of getting out in the field and talking to candidates," he says. A centralized sales team in the corporate office has evolved into a field staff composed of one assistant vice president of franchise sales, one full-time sales person (with another scheduled to come on board), and three independent sales consultants.

"These three consultants just started working for us in 2010," says Jameson. "Two are full-time and one is part-time, and they work exclusively for us, unlike brokers. One is actually one of our franchisees and the other two are former independent print shop owners."

Jameson has also revised the way his team is compensated. Under the previous plan, the sales team received base pay and commission; to encourage more sales they now have other milestone bonuses and incentives. "It's really given a freshness to motivating the team and providing a little additional incentive throughout the year," he says.

Technology tools are also playing a role. "The online brochure system we use, Process Peak, does a great job of providing a selling blueprint for our team, and the result is we're closing deals faster," he says. "It's really important to make sure that everybody on the team has the right resources and tools."

While regular sales meetings and internal and external training play an important part in creating a top-performing sales team, Jameson says it's also important for every member of the corporate staff to be involved. "Things have come out of these meetings where we role play and interact. We've learned things about our system that we might not have discovered if we had not involved everyone in the training," he says. Additionally, the sales staff attends new franchisee training when they first come on board and then at least once a year to make sure they maintain a well-rounded understanding of the operations end of the business.

"When I'm looking for a sales person I look for someone who can build and develop relationships," says Jameson. "Do they know how to really listen, understand what a prospect is saying, and find the right candidate and right fit?" He also looks for sales people with a "fire in the belly" who are self-motivated and relate well, believe in, and are passionate about the brand.

And he keeps an open mind. "As a leader, it's important to listen and react to the feedback your sales team can provide," he says. "There will likely be some common objectives coming back from the prospects they talk to in the field. As leaders, we have to hear that, address it, and provide answers for them."

6 Elements of a High-Performance Sales Team

Robert Stidham is no stranger to franchise sales and development. As president of Chicago-based Franchise Dynamics, a full-service national and international franchise sales outsourcing firm, he has been involved in more than 2,000 franchise business start-ups, multi-unit, and area development agreements in more than three dozen countries since 1992.

He has a track record of knowing how to increase franchise units, revenue, profitability, and increase market share and brand awareness for a variety of franchise brands. He has helped franchise companies in business and home services, retail and food concepts for small and large franchisors including MRI Worldwide, Dunhill Staffing Systems, Oberweis Ice Cream, and Harris Research (parent of Chem-Dry and N-Hance Wood Renewal), a Home Depot company. His current company represents more than 20 franchisors of all sizes in the restaurant, retail, personal, and business services segments of franchising.

Boiled down to 6 essential components, here is the formula Stidham prescribes for building a high-performance sales team.

1. Hire the right people. "Look for a proven track record and a values, personality, and cultural fit with your brand."
2. Train your sales people well. "As part of their ongoing personal development plan, provide a variety of training through your company and at various industry and commercial seminars and events."
3. Give team members the tools to succeed. "Provide every possible resource you can identify. We use a great deal of best-of-class technology as productivity drivers. We provide all of the resources and technology at our expense--and are very willing to look at every new tool we think may help improve performance, reduce costs, or create more and better franchise sales."
4. Recognize and reward outstanding performance: a) offer high compensation for superior performance; b) provide personal/professional growth opportunity; and c) confer recognition. "Generally, we find recognition to be more powerful then reward in driving superior levels of performance."
5. Commit to individuals' growth. "Have a plan for the development and personal growth of each of your sales people."
6. Treat each individual as a valued part of the organization. "Give them an opportunity to contribute to the company in a broader way. Many franchise development staff are kept away form the actual franchise business! Create an environment where people can openly communicate and share information."

Environmental Issues

So you're a franchise development director... What can you do as leader to create an environment that sustains a top-performing team and keeps it running at optimal levels? We posed that question to Robert Stidham, president of Franchise Dynamics. Stidham has worked with hundreds of franchise companies over the past 18 years and gathered a few tips over that time. Here's what he had to say:

• Ask your high-performing team members to evaluate each new person who joins your team.
• Make communication easy and two-way; create an environment where information is shared.
• Each sales person should have their own development and growth plan.
• "Inspect" what you "expect" from your people.
• Measure success by more than units sold.
• Create an environment where sales and development team members can contribute in many ways, not just in sales.
• Pay a modest salary plus incentives. When pay is commission-only and sales people have little or no personal economic stability, "substantial problems" often arise down the road with the deals they close. "If people feel undue financial pressure and must 'close the sale' to pay next month's rent, you may find they are not making great long-term decisions for the company."
• Both centralized and decentralized team approaches can work well; and decentralization is now easier because of technology. "If you are going to manage a decentralized organization, it's important to communicate more--use iChat and Skype, not just the telephone--to help the team feel more a part of the company, and productivity technology like CRM software can help you understand how they are spending their time and your resources to develop franchise sales."

8 Characteristics of a High-Performing Sales Person

1. High integrity
2. Proven, verifiable track record of franchise sales success
3. Great communication skills
4. Strong work ethic
5. High energy
6. Teachable
7. Self-starting (especially if your team is decentralized)
8. Works well as a part of a team

2011 Growth Forecasts Gain

If recent positive economic forecasts pan out, 2011 could be a pivotal year for franchise sales development.

One of those forecasts, the IFA's 2011 Franchise Business Economic Outlook, was released in January. The report estimates the number of franchise establishments to grow in 2011, from an estimated 765,723 to 784,802, or 2.5 percent, compared with 0.3 percent growth in 2010. Personal services, driven largely by senior care, is

The number of establishments in each sector is estimated to increase in 2011, with the largest gains expected in lodging (4.4 percent), automotive (3.9 percent), and retail products and services (3.9 percent); the lone exception is business services (-0.2 percent).

The IFA's recent report complements its Franchise Business Leader Survey, issued late last year, which found 50 percent of franchisors saying the outlook for the U.S. economy would be "better" in 2011. However, these positive numbers are tempered by the continued lack of access to capital for franchise growth and expansion.

For example, in a survey of its members the National Small Business Association found that 41 percent of the nation's small business owners are unable to secure adequate financing. The report noted that many franchisees will continue to receive help from their franchisors through direct loan programs and reduced royalties and fees. Compounding the problem, even newly downsized executive types may lack access to the funding they need to enter franchising. But hope remains, as early 2011 reports show signs of banks beginning to open the loan spigots again.

A recent franchise development trend likely to continue in 2011--and help build sales and development numbers--is conversions of existing independent businesses to franchise units. This is where Mark Jameson, senior vice president of franchise development at Fastsigns, is focusing his company's development efforts. Benefits to this approach include 1) formerly independent operators gain instant brand recognition and buying power, and 2) franchisors such as Fastsigns gain an instant royalty stream. "We introduced the strategy of going after independent print shops in 2010 and we'll continue to mine that source during 2011," says Jameson.