The New Franchise Buying Paradigm
I am a big fan of sales processes. However, I am a bigger fan of buying processes. And when a company's sales process is inconsistent with their customer's buying process, breakdowns occur. Many of the tactics and techniques franchisors counted on in the past appear to be producing diminishing returns in the present. I believe we are in the middle of a franchise buying behavior transformation driven by two game-changing events:
- the proliferation of information through the Internet and social media; and
- the stock market collapse in 2008.
In this article, I will briefly discuss the impact of these changes on buying behavior and discuss tactics and strategies for the new buying paradigm.
If we were to examine the typical franchise candidate's decision-making process for candidates who invest in a franchise, you will find four major linear steps: Entrepreneurial Aha!, Data gathering, Engagement, and "Yes" Decision.
The entrepreneurial "Aha!"
First, candidates wake up one day with the horrifying revelation, "My life stinks," "My ladder of success is leaning against the wrong wall," or "I need to be doing something different." Or it could be a seasoned entrepreneur who comes to the final conclusion, "I'm milking a dying cash cow. I need to look for a new growth vehicle." However they get there, the process starts when the decision-makers awaken to the idea they can and should start a business.
Second, candidates start gathering information about one or more of their perceived options. At this time candidates want to be left alone to gather data at their own pace. During this stage, they typically won't return calls or respond to emails. They gestate like a caterpillar in cocoon, living off a steady diet of data and information. They will stay in Data Gathering mode until a timely piece of information or a catalytic event leads them to say, "Now I'm ready. Talk to me."
Most candidates decide to engage or disengage with a particular franchise opportunity before they speak to the franchisee recruiter. In the new buying paradigm, the candidate makes this determination almost exclusively based on content available to candidates about the franchisor on the franchisor's website or written by others and circulating in cyberspace. The franchisor has lost the all-important first impression to the customer experience or to the web.
For those who step up and engage the franchisor in conversation, they made a profound connection to some information in a way that they felt compelled to stand up and say, "I am now ready to talk to someone and decide if this is for me." It's only in this stage that franchise candidates allow franchisors to enter their space. This doesn't mean they come pre-sold and ready to move forward. It does mean they are ready to stand up, be counted, move the process forward, and make a final "Yes" or "No" decision over the next 90 days.
Franchise candidates complete the process, recognize the fit, stroke a check, and "John Hancock" your franchise agreements.
Since the proliferation of franchise portals and franchisor websites, franchisors are becoming more aware of franchise candidates earlier in the candidate's Data Gathering process. However, few franchisors have materially altered their methods of recruiting franchisees to reflect these changes in technology and buying behavior.
Instead, the typical franchisor sifts through their lead pool, sorting out and killing off candidates who are in the early Data Gathering stage while looking for candidates who are already in Engagement. This creates the Gap we highlight in the FPG Franchise Buyer Decision Funnel (see diagram). Most franchisors, perhaps unwittingly, expect franchise candidates to bridge their own Gap. Smart franchisors create website, email drip, and social media content designed to bridge the Gap.
Ten years ago, a typical franchisor could easily reach 85 percent of the people who requested information about the franchise by telephone. Today, franchisors are hard-pressed to reach 40 percent of their leads. Since almost 100 percent of franchise candidates have access to cell phones, text messaging, emails, smart phones, and other technologies, candidates should be easier to reach, not harder. It would appear candidates want facts and information from the franchisor, not conversation and hype.
Without a forward-thinking sales process designed for today's tech-savvy, conversation-resistant, information-starved candidate, some franchisors will lose quality franchise candidates to more astute, aware, and strategic franchisors with a better understanding of how candidates buy franchises, not necessarily to better opportunities.
Here are three material franchise-buying changes that have already occurred. Smart franchisors will reinvent their processes to reflect these changes and start inventing content and tools to address the needs of candidates in the gap.
Old franchise sales paradigm
New franchise buying paradigm
The franchisor is the gatekeeper of information.
The Internet is the gatekeeper of information.
The franchisor representative tells the candidate the franchisor's story by telephone or in person.
The franchise candidate creates a composite story from franchisor's website plus whatever content the candidate locates about the franchisor online.
The process starts when the franchisor and candidate schedule a call or plan a face-to-face meeting.
The process starts when the franchise candidate experiences an "entrepreneurial Aha!" and jumps on the Internet and starts reading.
In addition to the typical franchise sales process, franchisors operating in the new buying paradigm will include:
- A multimedia franchise opportunity website to manage candidates' expectations as to what the business is and isn't, and the call to action of scheduling an introductory call.
- Email campaigns designed to break down candidates' resistance to holding a telephone conference, share the value proposition of the franchise, communicate success, and tell the franchisor's story (often from the successful franchisees' perspective).
- Use of blogs, social PR, and social media content to leave "bread crumbs" that eventually lead candidates to the franchisor's franchise opportunity website.
For example, Office Pride, a janitorial franchise dedicated to making money while operating from biblical principles, worked with us to create bridge-building content designed to move candidates from "Entrepreneurial Aha!" into "Data Gathering" and "Engagement." Go to and To see how Office Pride communicates their value proposition to their target franchise candidate (a lower-middle class, blue-collar, or lower-level white-collar, decidedly Christian employee looking for their first business) visit www.officepridefranchise.com. Office Pride is currently converting 5 to 6 percent of unique visitors to leads.
These "Data Gathering" leads immediately start receiving a campaign designed to educate, inform, entertain, and inspire them to action with the value proposition of the franchise business, which would include the Christian culture of the organization. In addition they will receive FPG's 11-part franchise buyer video tutorial series "Making Your Move." Todd Hopkins, CEO of Office Pride, has agreed to open his process to any franchisor who wishes to study their process. We thank Todd for his generosity and his commitment to "Do the right thing" both inside and outside of Office Pride. To receive this campaign, visit www.OfficePrideFranchise.com and leave your contact information. Please fill out the form using "TEST" as your first name, so their recruiters do not waste time calling you.
If you do not redesign your franchise sales process to be consistent with how people buy franchises, you will experience a breakdown in results. Take a good hard look at your recruiters and recruitment process:
- Does your website help you engage candidates before they request information, and do you have the technology to keep them engaged once they start?
- Do you offer candidates content aimed at creating an "Entrepreneurial Aha!" and "Engagement" or do you wait for candidates to create their own "Aha!" and become fully engaged?
- Have you mystery shopped your process to determine how well your story is told from the perspective of your target franchise candidate?
Joe Matthews is a founding partner of Franchise Performance Group, which specializes in franchisee recruitment, sales, and performance. He has more than 20 years of experience with national chains including Subway, Blimpies, Motophoto, and The Entrepreneur's Source. He is a regular presenter at IFA conferences and is an instructor with the ICFE (Institute of Certified Franchise Executives). He also is the author of three books, Street Smart Franchising with Don DeBolt and Deb Percival, and The Meaning of Life Project. This article is an excerpt from a free, downloadable e-book, Franchise Sales Tipping Point, which can be found at www.franchiseperformancegroup.com.
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