7 Lead Generation Factors to Consider for Your Franchise
The following excerpt is from franchise expert Mark Siebert’s book Franchise Your Business. Buy it now.
While having a strong message is important, it is meaningless unless you have an audience to whom you can deliver the message. Franchise sales rarely happen by accident. And while an occasional serious prospect may just wander in your door, most franchises are sold because a franchisor executes a marketing plan designed to attract that prospect.
Our affiliate, Franchise Dynamics, sells literally hundreds of franchises a year, year after year, for concepts that have included restaurants (Newk’s Eatery), weight loss (Medifast), shelving retrofits (ShelfGenie), home renovation (101 Mobility) and even indoor trampoline parks (Sky Zone).
In each case, the success of their sales efforts was directly related to their marketing plans. In selling some 1,500 franchises over the past few years, Franchise Dynamics had to process more than 100,000 franchise leads—and those leads did not just happen by accident.
In order to give you a baseline for the best chance of success, keep these seven factors in lead generation in mind.
1. Budget
The first step in creating your franchise marketing plan involves setting a budget. Defining an appropriate budget is almost always a balancing act between goals and available resources.
When I ask my clients about goals, however, I find that many business owners simply haven’t given the subject much thought. They often respond with vague platitudes about “aggressive growth without sacrificing quality” or suggest they would like to open a stated number of units without having considered all the factors that go into making that decision.
The best way to develop your growth strategy is to set a long-term goal (exit, business value, cash flow, etc.) and time frame (five years), translate that goal into a hypothetical business that can achieve it (100 franchises paying $30,000 a year in royalties, for example) and work backward to a more specific short-term objective (selling 12 franchises in the first year).
After creating growth goals using these kinds of measures, the franchise marketing budget can be developed based on industry averages. The annual franchise marketing budget can be arrived at simply by multiplying the desired number of franchises to be sold by the assumed marketing cost per franchise.
2. Geographic markets for expansion
One mistake we see again and again involves new franchisors starting their process with a national franchise rollout. Often, their initial expansion is serendipitous: they get a hot lead from Timbuktu and decide they should pursue it. Frankly, it is easy to spot a franchisor that has not benefited from professional advice just by looking at their location strategy. If they have locations all over the map, chances are they are being opportunistic and unfocused in their marketing efforts.
Many of these franchisors suffer from the misconception that there are a limited number of franchisees in any given market and if they do not take advantage of every opportunity, it will never happen again. Unfortunately, that strategy is very likely to come back to haunt them.
The truth is that franchisee prospects are not in short supply. When you are ready to go into a new market, they will be there — as long as you know how to find them. If a franchisor adopts a reactive approach to isolated candidate leads in remote markets, it’s also unlikely that they’re pursuing the best candidates in that market. Focused lead generation within targeted markets will generate more leads that the franchisor can qualify to determine the candidates who will best represent its brand.
3. Mix and distribution of corporate locations
Another factor you must consider will be your mix of franchise to corporate locations. For many new franchisors, the best course of action is to put the further development of corporate locations on hold as they get established as a franchisor. This approach allows you to learn the business of franchising and concentrate all your resources and efforts on this new business. Of course, if your short-term plans involve both franchise and corporate expansion, you should account for that in your marketing planning—especially when it comes to your location strategy.
There are several location strategies you can employ if you go this route:
- The Home-Sweet-Home Strategy. One would be to reserve markets that are “close to home” for corporate locations while franchising in more distant markets.
- The Spiking Strategy. A spiking strategy involves opening locations in distant markets that will serve as a showcase for future franchise efforts and a hub for…
Read More: 7 Lead Generation Factors to Consider for Your Franchise