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

How Do You

Stack Up on

Lead Generation &

Franchise Sales?

Panel of Speakers

ƒ 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

ƒ Jeff Sturgis – Vice President, Fantastic Sams

• Oversees Franchise Sales, Real Estate, Store Development

• Over 15 years in franchise development (FOCUS Brands, US Franchise Systems)

ƒ 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

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 2009

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

Recruitment Budgets

$145,000 $120,000 $100,000 $138,000 $138,000 Median $282,000 $153,000 $165,000 $175,000 $198,000 Average 2005 2006 2007 2008 2009

Where the Money Goes

23% 10% 9% 18% 40% 12% 8% 11% 18% 51% 10% 12% 16% 18% 45% 9% 11% 12% 20% 48% 10% 13% 13% 17% 47% Other Public Relations Trade Shows Print Internet 2005 2006 2007 2008 2009

Top Sales Producers

Other 7%15% 4% 11% 14% Print 6% 4% 2% 4% 6% Brokers 16% 14% 21% 9% 29% Referrals 28% 37% 21% 27% 13% Internet 35% 41% 45% 46% 45% 2004 2005 2006 2007 2008

Lead Performance

• 34% reported leads up

• 18% reported leads the same • 48% reported leads down

Is Lead Quality Up or Down?

• 26% report quality is up

• 34% report quality is the same • 40% report quality is down

Sales Performance

• 7% reported exceeding 2008 goals • 21% reported meeting goals

Franchisors that are

Exceeding or Meeting Goals

• 39% food category • 35% service category • 13% retail food

• 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

Franchisors that are

Broker Networks

• 50% use broker networks • 85% have closed deals

• 8% median of applications result in sales • Median of 8 sales

Measuring Costs

• 70% track their cost per lead • $50 median cost per lead

Measuring Costs

• 57% track their cost per sale • $7,000 median cost per sale • $8,200 average cost per sale

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

Sales Research

• 36% employ qualifiers to screen leads

• Of these qualifiers, 54% receive base + commissions • 53% of sales personnel work remotely in home offices

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

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

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

Online Web Site

Shopping

Search Engine Market

Share

*Nielson Online, July 2008

Others 3.9% Ask 2.0% AOL 4.6% MSN 11.9% Yahoo! 17.4% Google 60.2% Google Yahoo! MSN AOL Ask Others

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?

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

Web Site Usability

• 5 categories

• Franchise content accessibility • Site readability

• Clear navigation

• Effective use of technology • Overall site presence

• Ratings

Key Content

• 6 categories

• Company history

• Benefits of franchising

• Available locations / territories • Investment required

• Frequently asked questions • Testimonials

• Clearly defined process • Rating

Best in Class – Navigation

Where We Are Where We Are 2 Levels of Navigation 2 Levels of Navigation

Best In Class – Questions

Expanded Question Expanded Question Condensed Question Condensed Question

Best in Class - Timeline

Step 1 Detail

Step 1 Detail

2008 Top Websites Surveyed

• Great Clips • i9 Sports

• BrightStar Healthcare

Telephone Mystery

Shopping

Telephone Mystery Shopping:

Response to Inquiries

• How important are phone leads to you? • What is more important to you?

• Internet leads • Phone leads

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

Telephone Mystery Shopping:

Qualification Process

• Enthusiastic 83% Yes • Controls conversation 83% Yes

• Takes name 24% No • Takes address 48% No • Takes telephone no. 45% No

Performance Alert

• Takes e-mail address 40% No • Qualifies experience 40% No

• Qualifies finances 46% No • Qualifies start time 67% No

Web Site

Mystery

Shopping

Web Site Mystery Shopping:

Response to Inquiries

• 70% of franchisors never called the qualified lead from their franchise Web site

Application Submittals*

*eMaximation Research 1% 2% 1% 16% 26% 54% 1: 24 hrs 2: Week 1 3: Month 1 4: Month 2 5: Month 3 6: After Month 3

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.

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

How Do You

Stack Up on

Lead Generation &

Franchise Sales?