How Do You Stack Up on Lead Generation & Franchise Sales?

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2 How Do You Stack Up on Lead Generation & Franchise Sales?

3 Panel of Speakers Steve Olson - Publisher, Franchise Update Media Group Franchising.com Franchise Update Magazine Area Developer Magazine 27 Years in Franchising Sr. Vice President, It s a Grind Jeff Sturgis Vice President, Fantastic Sams Oversees Franchise Sales, Real Estate, Store Development Over 15 years in franchise development (FOCUS Brands, US Franchise Systems) John Wuycheck Vice President, Kahala Franchise Corp. Responsible for franchise Sales and Recruitment for 12 Brands Led the development team for Cold Stone Creamery adding 1,600 units over a 7 year period

4 Franchise Update s 2009 Franchise Development Report 148 franchisors representing 57,000 units 6,700 company-owned units 39,700 franchise units 10,800 international units Plans for growth in ,100 more franchise units (6,300 zees)

5 Industry Categories Automotive Baked Goods Beauty-Related Building & Construction Business-Related Child-Related Cleaning & Maintenance Computer Prod. & Services Decorating & Home Design Fast-Food Restaurants Health & Fitness Home Services Personnel & Staffing Pet-Related Real Estate Restaurants (sit-down) Retail Food Retail Stores Senior Care Sports & Recreation Other

6 Recruitment Budgets Average $198,000 $175,000 $165,000 $153,000 $282,000 Median $138,000 $138,000 $100,000 $120,000 $145,000

7 Where the Money Goes Internet 47% 48% 45% 51% 40% Print 17% 20% 18% 18% 18% Trade Shows 13% 12% 16% 11% 9% Public Relations 13% 11% 12% 8% 10% Other 10% 9% 10% 12% 23%

8 Top Sales Producers Internet 35% 41% 45% 46% 45% Referrals 28% 37% 21% 27% 13% Brokers 16% 14% 21% 9% 29% Print 6% 4% 2% 4% 6% Other 15% 4% 11% 14% 7%

9 Lead Performance 34% reported leads up 18% reported leads the same 48% reported leads down

10 Is Lead Quality Up or Down? 26% report quality is up 34% report quality is the same 40% report quality is down

11 Sales Performance 7% reported exceeding 2008 goals 21% reported meeting goals 72% reported below goals

12 Franchisors that are Exceeding or Meeting Goals 39% food category 35% service category 13% retail food 13% retail non-food

13 Franchisors that are Exceeding or Meeting Goals Multi-media budgets -- 32% online, 22% print, 17% PR, 15% shows, 14% other 91% planning same or higher 2009 expenditures 74% have $100K + investment requirements Pay higher salaries to senior sales exec/managers Pay higher broker commissions

14 Broker Networks 50% use broker networks 85% have closed deals 8% median of applications result in sales Median of 8 sales $13,000 median broker commission

15 Measuring Costs 70% track their cost per lead $50 median cost per lead $80 average cost per lead

16 Measuring Costs 57% track their cost per sale $7,000 median cost per sale $8,200 average cost per sale

17 Performance Alert 25% less referral sales $7 higher median cost-per-lead $1,500 higher median cost-per-sale 2009 median recruitment budget the same Growing sales increase from other lead generation sources

18 Sales Research 36% employ qualifiers to screen leads Of these qualifiers, 54% receive base + commissions 53% of sales personnel work remotely in home offices

19 New Online Research 32% track unique visitors to their Web sites that convert to leads 53% track unique visitors that go to your franchise request form and convert to leads

20 New Sales Research 60% report referrals have the highest close ratios of all lead generation sources Only 38% provide incentives to franchisees that refer prospects that buy their franchise

21 New Online Research 58 of 148 surveyed have placed online ads/videos/press releases on social or business networks, blogs, YouTube, Craigslist, etc. 7 franchisors have made sales: 3 on Craigslist, 1 from online press, other sources not specified

22 Online Web Site Shopping

23 Search Engine Market Share Ask 2.0% Others 3.9% AOL 4.6% MSN 11.9% Google Yahoo! MSN Yahoo! 17.4% Google 60.2% AOL Ask Others *Nielson Online, July 2008

24 Driving Traffic to Your Sites How many of you have found purchasing keywords is worth the investment? How many of you believe you are successfully optimizing your Web sites?

25 Performance Alert How many of you believe you are successfully optimizing your Web sites? Only 39% of franchisors are listed on Google s first page using your industry description with franchise Over half of these 39% first-page searches were linked to the franchise home page, not to the franchise opportunity page

26 Web Site Usability 5 categories Franchise content accessibility Site readability Clear navigation Effective use of technology Overall site presence Ratings Excellent, good, fair & poor

27 Key Content 6 categories Company history Benefits of franchising Available locations / territories Investment required Frequently asked questions Testimonials Clearly defined process Rating 5 (best), 4-3 (average), 2-1 (minimal)

28 Best in Class Navigation 2 Levels Levels of of Navigation Navigation Where Where We We Are Are

29 Best In Class Questions Condensed Condensed Question Question Expanded Expanded Question Question

30 Best in Class - Timeline Step Step 1 Detail Detail

31 2008 Top Websites Surveyed Great Clips i9 Sports BrightStar Healthcare Multi-Brand Yum! Brands

32 Telephone Mystery Shopping

33 Telephone Mystery Shopping: Response to Inquiries How important are phone leads to you? What is more important to you? Internet leads Phone leads They are the same

34 Telephone Mystery Shopping: Response to Inquiries 23% of sales staff were available for our first call 60% left messages for sales staff only 42% returned calls within 48 hours 17% were directed to a Web site, were told to call back later, got no answer, or were disconnected

35 Telephone Mystery Shopping: Qualification Process Enthusiastic Controls conversation Takes name Takes address Takes telephone no. 83% Yes 83% Yes 24% No 48% No 45% No

36 Performance Alert Takes address Qualifies experience Qualifies finances Qualifies start time Presents next step 40% No 40% No 46% No 67% No 24% No

37 Web Site Mystery Shopping

38 Web Site Mystery Shopping: Response to Inquiries 70% of franchisors never called the qualified lead from their franchise Web site 44% never responded to the qualified lead by

39 Application Submittals* 2% 1%1% 16% 26% 54% 1: 24 hrs 2: Week 1 3: Month 1 4: Month 2 5: Month 3 6: After Month 3 *emaximation Research

40 Improve Follow-up & Win! Monitor & shop your sales team. 66% don t. Employ a lead qualifier. 36% do. Outsource to a lead follow-up service. Use phone roll-overs, after-hours answering service.

41 Franchise Update s Annual Franchise Development Report 148 franchisors representing 57,000 units 6,700 company-owned units 39,700 franchise units 10,800 international units Order information at franchiseupdate.com/afdr

42 How Do You Stack Up on Lead Generation & Franchise Sales?