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Designing a Process for Awarding Franchises – Part 2: Management

A Brief Look at Pre-Internet Franchise Sales

“The significant problems we face cannot be solved at the same level of thinking we were at when we created them.” -Albert Einstein

 

In my previous post, titled “Designing a Process for Awarding Franchises – Part 1: Leadership”, I looked at the notion of how designing a process of awarding franchises has to start with prioritizing around the characteristics that your franchisees should have.  Without fist hashing out this issue, it will be largely unproductive to tactically begin putting together a process that can be managed.  For example, creating a system for “selling” franchises to individuals with no prior business ownership nor franchising experience is much different than creating a system of segmenting, targeting, and positioning  your franchise to individuals and/or organizations who fit certain characteristics that you have pre-defined.  Both of these philosophies will have different implications as to how you design your sales organization, generate leads, create opportunity staging, and develop appropriate metrics.  Before you expend a lot of time, energy, and financial resources on becoming efficient make sure you are aligned for long-term success.

A Brief Look at Pre-Internet Franchise Sales

In the pre-internet days, back when times were simpler and your parents had to walk to school barefoot in the snow…uphill…both ways, sales organizations and marketing programs were designed a little bit differently within companies that franchised.  Perhaps you would run some ads in the Wall Street Journal and other publications where you felt high net-worth and business-minded individuals would be reading, making sure to include your phone number very visibly -and wait by the phone.  You could then hit the franchise trade show circuit, which is where these individuals might come to learn more, because really they had nowhere else to go since there was no internet nor websites to peruse.  You would collect some business cards, get home and give a follow up call, send out a shiny hard-copy brochure – and wait by the phone.  You might also implement a referral program whereby you would pay your franchisees for sending you leads that turned into franchisees.  The franchisors who could afford it would perhaps recruit a seasoned franchise salesperson with an existing “rolodex” of contacts that they could call on.


The franchise sales professional lived and died by the phone.  The phone was the sole point of communication, and the franchise sales person was the sole source of information for the interested candidate, besides the FDD (called a UFOC back then) but you would have to talk to the franchise sales person to get it, so…

Another couple of points to keep in mind: 1) Franchise Sales Professionals were typically cold-to-close salespeople which means that they were often first points of contact and deal-closers.  They were responsible for feeding the pipeline, closing the deals, and all steps in between; 2) Because of this cold-to-close mentality franchise sales professionals could not afford to miss any phone calls from interested candidates because they needed to continually feed the top of the pipeline, and conversely, missing a call was the equivalent of starving the pipeline.

The Internet’s Impact on Franchise Sales

As the internet was gaining traction in the dot-com boom from the mid-90’s through early 2000 and websites became more common for businesses, the spawning of internet lead generation 1.0 began.  Companies such as Franchise Solutions (an early pioneer founded in 1993), Franchise Gator (founded in 2001), and many others began to come online.

These lead generation sites became known as franchise “portals” and they simply aggregated landing pages, categorized franchise opportunities, and focused on driving traffic to their sites.  Franchisors flocked to these websites as an easy way to stimulate interest and feed the top of the pipeline.  This became the new norm for generating franchise leads and many franchisors were listed on several portals at once (I remember managing leads from 8 different sites at one point).

A problem quickly arose.  Most franchise organizations saw a major spike in incoming leads as access to the internet and corporate websites broke down a number of barriers and made it very easy for anybody with access to the internet and a web browser to find and request information.  Yet, by and large, franchise sales organizations continued to manage the process in the same manner as they had in the pre-internet days.  Cold-to-close franchise sales professionals were feverishly answering emails and responding to a multitude of phone calls from anyone who requested information.  The process of awarding a franchise is complex by its very nature and has a relatively long sales cycle, thus as leads become qualified and engaged they take up a larger percentage of a salesperson’s time leaving them with less time to focus on feeding the top of the pipeline.

This model is still very prevalent in the industry today.  I believe that at the Franchise Update Development conference they’re still handing out awards for the salespeople that answer the phone on the first ring.  I’m not saying that that’s a bad thing to do, it’s just that it’s hardly a relevant metric anymore when it comes to measuring the overall effectiveness of any franchise awarding process.

So, we could diverge here and get into a whole plethora of other interesting topics on developing an overall strategy for awarding franchises but we’ll address many of these topics in later posts.  For now, let’s take a look at how implementing a two-tiered model would be beneficial.

The Two-Tiered Model

A sales professional has a finite amount of time in the day, right?  That person’s time needs to be spent on the greatest opportunities.  The franchisors that are more sophisticated in their awarding process have spent time upfront segmenting and developing their own list of targeted leads, therefore these leads have a high priority and the sales (I prefer the terms business development, but whatever…) team should be working them through the stages of the franchise awarding process.  However, because you have a website dedicated to your franchise opportunity along with a form where you request information, and you may have a number of other lead-generation sources (you might even be investing resources into the franchise portals), you are going to get leads through those sources.  Someone has to talk to, and follow up with, these people.  Do you want to adversely impact your top sales people’s time by putting them on initial qualification duty?  My guess is “no”.

This is where your Tier 1 sales team comes into play.  You should have consistent messaging going out to all of your incoming leads.  You should be able to automatically segment all of your incoming leads through your CRM system so that you are customizing the messaging to say the right things to the right people.  For instance, if the lead indicates that they have no franchising experience then perhaps your messaging should include some information about the franchisor-franchisee relationship.  If the lead does have franchise experience then perhaps you don’t need to include that information in your initial communication.  You then want your Tier 1 sales team to follow up with each lead, qualify them further, and if it’s appropriate then they will set appointments for them to speak with your Tier 2 sales team.

Your Tier 2 sales team can then maintain focus on their best opportunities.  They also know that when an appointment is set for them by the Tier 1 team that the lead has passed some initial criteria, and that he/she is an engaged and qualified candidate.  The two-tiered model is a much more scalable approach.  It is a much more systematic process that will allow you to maintain consistency even while ramping up lead-generation, so that you can ensure that every lead is followed up with in a consistent and timely fashion.

There are some basic fundamentals that you need to have in place in order to execute this model properly.  As follows:

  • The correct organizational structure.  Clearly defined roles between Tier 1 and Tier 2 reps.
  • A CRM platform.  A fundamental necessity to any sales team, you need a technology platform in order to route and assign leads, record notes and phone calls, allow calendar sharing, create opportunity staging, and to track key metrics around your sales operations.
  • Well-defined Opportunity Staging.  You should have a well-defined process including basic communication strategy around incoming leads, Tier 1 call scripting, and Tier 2 opportunity staging.

We’ll explore some of these concepts in more detail in coming posts.

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Clint is a Principal and Founder of The Flywheel Group, a premier provider of innovative solutions to the franchise industry. The FranchiseFlywheel™ application was developed out of the industry's need for a cutting-edge and affordable franchise management tool for franchisors. Spending several years in the franchise industry directing daily activities related to franchise and business development processes, marketing, lead-generation, and contract administration, and an understanding of the needs of peers and colleagues, led to the development of the application. The Flywheel Group is focused on improving best practices and driving change in the franchise industry by introducing industry-leading solutions and working with its clients to re-engineer business processes that will ultimately enhance revenue and improve bottom line efficiency. Clint actively writes and shares his thoughts on the Flywheel Blog.