Franchise Update Magazine Issue IV, 2011 | Page 41

• Referrals. “Referral programs have grown tremendously,”
says Olson, “not only to franchise owners, but also to suppliers
and employees.” As noted, referrals took the lead as the top
sales producer at 31 percent, displacing the Internet as number one. This, says Olson, is due to more franchisors offering
referral fees, promoting them more aggressively to franchisees,
and increasing fees (or other rewards) when a referral signs on.
Referrals, he says, also are three times more apt to buy than a
non-referral. “These are much stronger leads,” he says, and the
numbers back this up: at 54 percent, referrals have the highest

close ratio of all lead generation sources. More franchisors are
getting with the program and offering incentives: in 2011, 67
percent provided incentives to franchisees who referred prospects that buy, up 5 percent from the year before. The median
referral fee of $3,500 remained level from 2010. While referrals
still haven’t regained their 37 percent share of sales producers
(2007), the trend is clearly upward.
• Qualifiers. In the quest to make the sales process more
efficient and productive, more franchisors are turning to qualifiers to screen leads before turning them over to their more
highly paid sales team. “The use of qualifiers has continued to
creep upward,” says Olson. Last year the number of brands employing qualifiers was 38 percent. “Forty-one percent employ
one today, the first time qualifiers have broken the 40 percent
level,” says Olson. Why? Simple: It saves time and money and
boosts productivity.
At this year’s Franchise Leadership & Development Conference, the session on high-performance sales growth generated a flurry of questions from attendees. In a lively discussion
about the pros and cons of using brokers, panelists noted that
in-house qualifiers serve one of the same purposes brokers do.
“The broker does a lot of legwork to qualify leads and answer
all the big initial questions,” said Steve Dunn, vice president of
franchise development at Denny’s. Panelist JD Sun, co-founder
of BrightStar Healthcare, where the use of a pre-qualifier has
been highly successful, put it more bluntly: “You don’t want
your sales people wiped out from stupid calls.” A franchisor
in the audience said, “We hire a $27,000 lead qualifier who
gets $1,000 per sale. It’s worth it.” Qualifiers can also be outsourced, but the result is the same: better prospects and a more
productive sales team. n

Grow Market Lead

don’t—a deficiency almost unconscionable in today’s competitive, cash-strapped environment.
Some good news: median cost per sale fell significantly
in 2011 among those who track it—from $10,000 in 2010 to
$8,565 in 2011. “A lower cost per median sale reflects a combination of technology, measurement tools, and better sales
and marketing performance,” says Olson. Many also are using outside firms to help them manage and track their ROI
on sales expenditures.

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