Do You Measure Your Advertising and Sales Performance?
Great victories in franchise development are achieved by careful measurement and refinement of lead generation and selling activities. Sadly, not enough franchisors embrace this best practice. This is astonishing! How can you grow if you don't know where to go?
Simply stated, "You can't manage what you can't measure." If you're new to the franchising world, invest in marketing and sales intelligence and you'll save valuable dollars and accelerate your growth. Need assistance? Hire a proven development consultant who has successfully stepped up development for other brands. You'll recoup their fees many times over.
When I was growing up in the direct response business, leads that produced sales were all advertisers cared about. Whether developing inquiries for life insurance agents or for home improvement sales people, how many deals you closed was the benchmark for performance. Advertising decisions were based on marketing sources that generated sales at acceptable costs. Lead counts were never the deciding factor. Quite simple, or so I thought.
To my surprise, my ignorance was exposed when I entered franchise selling in the 1980s. It was my first experience with what I call "upside-down marketing." During the previous year, I had taken over sales development for American Advertising Distributors. This is when I discovered how some franchisors evaluate recruiting success. Company President Dick Webber scowled as he lumbered into my sales office.
"Steve, Sales & Marketing Management magazine is our most expensive lead source, so dump it," he said.
I countered, "But the publication's cost-per-sale is 50 percent less than our next best source, and their franchise prospects are really qualified. If you'd like, I'll show you the deals we've sold and impressive applications we receive."
Dick then pushed our quarterly leads report in my face. "See how few prospects we get? I don't know if we can afford this publication any longer!"
Hmm... should I have made buying decisions based on driving bushels of cheap, unqualified leads? Did that work in the classic sales flick, "Glengarry Glen Ross?" I was too stubborn to give in and continued defending my advertising expenditures. I wasn't about to give up our most effective selling source because it wasn't generating lots of names.
To this day I still ask myself, "Do I want 5 inquiries a month that produce 2 sales, or 200 junk inquiries that produce wasted time, aggravation, and expense?" Seek the quality lead generators. Don't fall victim to the clutter of upside-down marketing... or you'll fail!
Tracking sales has become more difficult
So how can you accurately measure where sales are coming from? Did an inquiry originate from a search engine, a franchisee website, or your own site? Did the buyer read your print ad, pick up your brochure at a franchise show, or see your press release - and then contact you over the Internet? Here are some of the tracking challenges franchisors must address:
- Multiple website sources - The average franchisor contracts with 4 to 6 external websites, and some up to 10, creating heavy lead activity that can be difficult to monitor effectively.
- Multiple lead sources - In addition to the Internet, other lead generators complicate tracking challenges: broker leads, trade shows, newspapers, magazines, direct mail, referrals, customers, press stories, etc.
- Multi-source leads - Combinations of several lead sources often contribute to the franchise sale. All need to be credited for the sale (some companies provide percentage values for each source, e.g., 33 percent customer referral, 33 percent press article, 33 percent your website).
- Buyers confusing website names - With more than 100 franchise websites available to buyers, it's often difficult for a candidate to remember which site it was with "franchise" in the name that prompted them to respond to you. On occasion, franchisors have incorrectly credited the wrong site for a sale because of buyer confusion!
- Internet as facilitator, not source - The highly interested buyer decided to contact you by going online rather than phoning. This can easily be credited improperly as an online sale... unless the sales rep digs beyond the online contact by asking the buyer what prompted them to respond.
- Not asking buyers for the source - Sales people by nature are focused on the sale. Some don't even bother to interview candidates about what triggered their contact. That's "busy work," which is low on their priority scale. Every sales person should ask buyers several times for the source(s) throughout the sales process.
- Lost and tossed inquiries - Franchisors at times lose leads. It should be a regular practice to contact ad sites to recover or compare inquiry databases as a safeguard.
- Ad website transfers to franchise sites - Your own franchise website should always produce your most applications and sales. Prospects who discover elsewhere online that you franchise often abandon that site and go directly to yours for the full scoop. This is great, but credit may be incorrectly given to your site, not to the advertising portal that prompted the inquiry.
- Disconnect between marketing and sales - This is a growing problem between marketing and sales functions that don't closely align their tracking efforts: one side is carefully measuring lead production results, while the other is intensely measuring sales results. Unless this process is seamless, you're vulnerable to bad decisions that will weaken your lead generation and sales success. I've witnessed too many misguided companies that unknowingly dropped selling sources because they didn't integrate their performance metrics.
This is an excerpt from my Amazon.com best-selling book, "Grow to Greatness: How to build a world-class franchise system faster." To order copies, click here.
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