Franchise Update Magazine Issue IV, 2011 | Page 38

Grow Market Lead

By Eddy Goldberg

2012:
Taking Control

L

You can’t change the economy,
so change yourself!

ast year the headline on our Annual Lead Generation Survey story read: “Adapt or Die.” Responses
to two new questions this year indicate franchisors
have taken this lesson to heart.
In responding to the question “Do you believe the fundamental lead generation process used before the recession must
be changed to effectively recruit today’s buyers?” three out of
four (77 percent) said Yes. And to a similar question about the
franchise sales process, 74 percent said Yes.
“Don’t wait for the recruitment environment to change.
You need to change your approach to succeed in this environment,” said Franchise Update Media Group President
Steve Olson, who unveiled the results of the 14th annual
survey at the Franchise Leadership & Development Conference in October.
This year’s survey gathered data on sales and recruitment
practices from 110 franchisors representing 109,936 franchised
and company-owned units (79,254 franchised and 30,682
company-owned). Participants consisted of franchisors who
registered for the conference and filled out the forms of the
in-depth survey. The responses—which are analyzed to provide an in-depth view into the recruitment and development
practices, budgets, and strategies of a wide cross-section of
franchisors—provide the basis of our Annual Franchise Development Report (AFDR).
“It’s not just catching up with where
you were before,” says Olson. “If you have
30 percent fewer buyers in the market,
you have to improve your recruitment
performance.” Today’s potential franchisees, he adds, are asking not “How
much can I make?” but “How fast can I
get to ROI?” And franchisors better have
a good answer, or those prospects will
find another brand that does.
Many of the changes in the recruitment environment, of course, are the
result of the economic shifts of the past
few years. “The impact of the recession on
the buyer has created caution and shrunk
the pool of buyers, so you have to get a
much larger slice of the pie to continue

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to grow—or fish in different ponds,” says Olson. “There are
fewer buyers in a shrinking pool, and we don’t know when it’s
going to change, so we have to change our processes to more
effectively target our audiences.”
This is not simple. It means, among other challenges, overcoming the fear factor in buyers, the ongoing lack of financing,
more attention to unit economics and validation, and increased
use of technology tools to monitor and quantify results of lead
generation and the sales process. “It’s not the go-go days any
more, so measurement is more necessary than ever and the
tools are improving every year,” he says. Compounding the
challenge, he adds, there have been more closings of franchise
units in recent years, so brands first have to catch up before
they can grow.
One way to fish in new ponds is to expand your pool through
outbound prospecting. “This has never been done before, it’s
always been inbound,” says Olson. Examples include calling
on local chambers, attending industry trade events, and exploring vertical markets. Fishing in vertical markets involves
learning the characteristics and traits of your most successful
franchisees and going where they go, finding people in vertical industries with the same skill sets.
Growth plans for 2012 among respondents target a total
of 8,262 new franchise units and 4,441 new franchisees; that
compares with 3,850 new units 3,100
franchisees targeted for 2010. To hit
those goals, says Olson, franchisors will
have to provide a compelling business
opportunity, which involves strong unit
economics, transparency in Item 19 (including costs, as well as sales numbers),
and refining their recruitment process
to match what potential franchisees are
looking for, not only in content and tone,
but also in using every available channel
to present their offer.
The following is a high-level summary
of some of the in-depth findings from
the 2012 AFDR. To order a copy of the
complete report, see page 39.
• Recruitment budgets. In one of
the more interesting changes from the