Franchise Lead Generation Trends for 2014: The Power of Story
Best-selling business author and trainer Zig Ziglar once said, "People don't buy drills, they buy holes." He meant that people often make decisions with their end result in mind. Think about any big decision you've made -- there's almost always a deeper purpose lurking in the background. You send your kid to college because you want them to have a happy and prosperous life. You buy a home so you can foster a healthy and fulfilling family life.
When it comes to buying a franchise, which is almost always an intense, emotionally charged decision, people go even further than buying the "holes." They're buying a personal story about how the franchise adds value or solves a problem that is worthy of the risk. The narrative candidates tell themselves about what's possible influences their entire decision-making process.
Qualified franchise candidates aren't really buying franchises. They're buying their own story about how their lives, careers, and situations will predictably improve by being a franchisee of a particular brand. This narrative may or may not play out in actuality, but by then the investment decision will already have been made.
In a franchise investment, the more a franchise candidate can relate a brand's story to the one they have in their head, the more open they are to having conversations with franchisee recruiters, learning more, and eventually making a decision to purchase.
The biggest trend for 2014 and beyond is that simply bombarding franchise candidates with ad copy bullet points is a poor way to tap into this hidden desire to relate.
Candidates make decisions in "story form," not in "bullet form." Companies that most effectively articulate a detailed, interesting, and helpful brand story will do better at increasing franchise candidate engagement and thus increase the number of franchisees they recruit.
Where do franchise candidates go to gather information to form their story about franchise chains and to seek out positive reinforcement for the story they're already telling themselves? According to Franchise Update Media's 2014 Annual Franchise Development Report, franchise candidates originally sourced information about the brand they ultimately invested in from predominantly three trusted sources: the Internet (42%), referrals from social and professional networks (32%), and franchise brokers (17%).
In other words, nine out of 10 (91%) of all deals done by franchisors in the Franchise Update survey can be traced back to self-directed Internet activity, referrals, and broker networks.
Based on our own work with franchise brand clients, we've identified 7 major franchise lead generation trends for 2014 and will present them in the coming weeks to help you in your lead generation and franchisee recruitment efforts in this new year.
Trend No. 1: Franchise candidates will conduct more self-directed research and demand more transparency of information before they talk to a franchisor representative.
Consider where the deal flow comes from. First, the Internet (42%). Franchise candidates scour the web looking for concepts they can connect to and information they can trust. Until a franchisor can quickly make the following case, they will have a tough time telling their story to qualified franchise candidates:
- The franchisor's products and services are unique, valuable, and difficult to copy.
- The franchise is profitable and will continue to be so into the foreseeable future.
- The franchise is sustainable and positioned to be around for the long haul.
- The business is engaging. The franchise candidate can see themselves involved in the business on some level.
- The business appears to fit what the candidate is looking for (financial return, quality of life, etc.).
To make this determination, franchise candidates want information they can trust. They turn to the Internet first. If they don't get what they need there, they often delve into their social and professional networks (32%) or hire a franchise broker (17%).
Keep in mind that franchise candidates don't necessarily want to hire franchise brokers. They want trusted sources of information. They want the real story, not hype. They want a business that delivers on their needs and objectives, one where they can leverage their particular brand of genius. They want to make an informed decision. They want to eliminate risk - and they want to win.
Perhaps, just perhaps, franchisors' refusal to post robust and transparent information about themselves online provides the lifeblood of a franchise broker's business. The skimpy advertorials found on franchise advertising portals don't meet the typical candidate's needs and eventually drive them to the broker networks. Neither do the sales-y "online brochures" franchisors create as franchise opportunity websites. Almost every active lead a franchise broker works exists as a "dead lead" in some franchisor's database.
Recently, frozen yogurt franchisor Menchie's (one of our clients) held a discovery day at their Los Angeles headquarters. CEO Amit Kleinberger asked a franchise candidate, "What is it about Menchie's that made you come here today?" The candidate replied, "The financial return is excellent. The cash flow and ROI meet my criteria. We subscribe to the mission of the company, agree with the future direction of the chain, and connect to the 'We make you smile' philosophy. I appreciated the transparency of the organization. Menchie's doesn't seem to have anything to hide."
Guess where this information and these conclusions came from? Not from the franchise development manager, not from the sales process, and not even from the FDD. The candidate said he came to these conclusions from the information available on menchiesfranchise.com. Among other things, Menchie's publishes its startup costs, Item 19 FPR, lengthy interviews with actual franchisees, and provides in-depth video interviews with the CEO regarding the mission, purpose, and future direction of the organization. The business comes to life in a real and authentic way.
This candidate entered the franchise sales process predisposed toward making a "go-forward" decision. This is not an isolated incident. Each month, Menchie's brings 30 to 60 franchise candidates to discovery day. The room is packed to the rafters with like-minded candidates.
Next time: Trend No. 2: Recruiting franchisees the same way candidates buy businesses.
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