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!
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:
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.
A targeted, quarterly magazine that takes CEO's, VPs and Sales Executives to the cutting edge of franchise development.