If you’re a franchisor and you’re looking for ways to branch out and feed your franchise development pipeline, there are a few things you need to know when it comes to closing a sale. Just how many leads do you think it will take to get to that final closing table? One? Ten? You might be surprised to know that it takes considerably more than that to get to the close of your new franchisee sale. When you start to franchise your business you have to find the highest quality leads to market your franchise to. This means that you need a significant quantity of leads to close a franchise sale. In particular when you consider that you will be qualifying the leads as they come in carefully to screen and qualify the franchise buyers. As a franchisor, you only want the best of the best running your brand and name in other locations. Finding the right franchisees requires a large volume of candidates to find the ideal buyers. Here are a few tips and facts to keep in mind and how best to approach selling franchises.
How Many Leads to Close a Sale
Most often it takes at least 100-150 different leads to actually close a sale according to broad industry statistics (http://www.franchise.org/). A lead generally is considered a filled-out form, which in today’s world of franchise lead generation portals and internet advertising, a form lead isn’t necessarily the best lead. The good side is that they are easy to generate and generally pretty cost-effective ($35 – $65 per lead). Generating the lead is only part of the sales process, a good franchise sales system will have a solid development team to work with the leads and manage the incoming franchise opportunities. This means consistent calling, regular communications, and constant contact with candidates. Generally, we recommend 5-10 calls in addition to a franchise lead nurturing program to get the most out of every lead that comes in. You may use sources such as the internet, tradeshows or your public relations department may provide leads. No matter where they are coming from, you need to know that they are good quality leads and they will cost you depending on what avenue you use. Typically, we recommend that you have a franchise salesperson on your team for every 400-500 leads you generate per month.
Best Lead Generation Strategies to Sell A Franchise
Part of what makes a good franchise development campaign is the leadership and thought process behind it. Think about the franchisee as your customer, understand what is driving their decision making and what will get them excited about your franchise offering, create the appropriate messaging and then start the lead generation to get in front of the buyers and find the candidates. When you’re looking to generate leads for your new franchisees, you want to have solid quality leads coming in. What are the best ways to get those leads? Well, internet marketing is still at the top of the list when generating sales leads. The internet can reach thousands more than you can alone and generally for a lower budget marketing campaign, Internet leads alone are capable of driving plenty of traffic and providing a low-cost franchise sales campaign. Franchise Marketing plans should also incorporate some version of social media, third party websites and blogs are still very effective for brand development, establishing credibility, and generating great leads.
Other avenues you can pursue include arenas such as your local franchise tradeshows where you set up a booth and can market to franchise and business buyers who are interested in brands and concepts in a particular market. Tradeshows are viable strategies for generating leads in target markets and typically have a slightly higher closing rate than internet franchise leads. Tradeshow leads will generally be a bit more expensive ($75-$150 per lead). Some franchise brands will also purchase lists of candidates and conduct email marketing campaigns to drive traffic and generate franchise interest. Franchise Public relations are a huge area where you can also put the word out to those who are looking to own a new franchise. Another great avenue for you to gain leads for new franchise owners is by direct selling and marketing through calling to potential conversion franchises in your market space or finding a category of the buyer to focus on by outbound calling or mailing.
How to move buyers through the Sales Process
The key to success when reviewing how many leads you need to close a franchise sale is also considering what you are doing with those leads to get them to closing. Ultimately, we always use the Franchise Discovery Day as the target to close the new franchisee. This is the meeting, final review, and franchisee’s opportunity to see the business in person and ultimately where the franchise sale takes place. We recommend creating franchise sales stages where you can understand key performance indicators and see where the buyer is at any given point. For example, hold a regular franchise webinar where franchisees are invited to come to these as phase 1 of the franchise sales process. For Phase 2, you might ask the franchisee to fill out an application form, Phase 3 might be a Franchise Disclosure Document review and Phase 4 could be the Discovery Day. (Typically our franchise sales processes are seven stages). Whatever your process is, define it and stick to it so you know whether you are getting an ROI from your franchise marketing efforts.
FMS is a team of expert franchise consulting professionals based in Canada that provides solutions for franchise development, franchise consultation, and expansion of businesses globally.