2012 IFA Conference Keynote

By Joe Mathews and Thomas Scott
Franchise Performance Group

This year’s International Franchise Association Conference had higher attendance than previous IFA franchise conferences. 2011 was a stronger year than 2010 for most operationally sound organizations with good business fundamentals and strong unit level economics.  With the continued credit market crunch and uncertainty in the markets caused by the election cycle, many franchisors expressed cautiously optimistism for 2012.

Here are our top 10 takeaways from this year’s IFA conference:

1. Focus on franchisees’ success. In the past we have noticed that franchise companies assume one of two basic cultures: “Franchise Sales” and “Operational Excellence.”  The first are consumed with top line growth and franchise sales. The second are consumed with franchisees’ performance and profitability.  While the “franchise sales cultures” often seem to dominate the spotlight in year’s past, this year we found companies with “operations cultures” were rightfully getting attention.  It is becoming more clear that operations support teams have almost as much impact on franchise recruitment results as the recruiters themselves.  For  instance, in the session called “Franchise Sales Secrets” with Geoff Hill (Focus Brands), Rob Goggins (Great Clips), Don Fox (Firehouse Subs), and John Twist (Batteries Plus), we found that the greatest “sales secret” was the improved economic performance of the existing franchisees.  As a result of what seems to be a renewed focus on franchisee satisfaction and profitability by many franchisors, we predict that franchisors will invest heavily training operations staff in sales coaching, problem-solving, and consulting best practices to create the best opportunity for a system wide sales and performance breakthrough.
2. Out with “forcing franchisees into compliance” and in with win-win problem-solving and workable relationships. Smart franchisors are learning to avoid “command and control” techniques such as “default letters” to ensure brand standards.  Franchise operations and field support team members are emphasizing using performance coaching, consulting, problem-solving, and influence techniques to create more consistency.  And franchisees are more responsive, not because they HAVE TO but because they choose to.  FPG has always felt that operations teams and field staff in particular have the hardest job and are the unsung heros in franchising.  We’ve experienced a bump of interest in our Developing Peak Performing Franchisees CFE-certified training program for support teams.  Amit Kleinberger, CEO of high-flying Menchies, which added over 100 franchisees in 2011, shared the following philosophy about growth. “Growth is not an objective.  Growth is the byproduct of doing the right thing, the right way, and at the right time.”
3. LOSOMO. This is a social media buzzword which describes the latest tactics companies use to promote their brands: Local, Social Media and Mobile Marketing. Brand after brand talked about how social media impacted customers on the local level and how marketing tactics need involve both smartphone and tablet devices.  Highly centralized franchisors with low trust levels about letting franchisees manage local digital marketing are getting nervous!  More decentralized brands with clear social media guidelines may have a competitive advantage over command and control franchisors who insist on controlling social media content themselves.  LOSOMO affects local search optimization, local PR, local social media and just about any other form of digital marketing.  Franchise brands need to plan on replicating national initiatives on the local level, such as local Facebook pages.
4. Cause Marketing. In one of the roundtables about PR strategies, participating PR firms experienced an increase in the number of franchisees who are involved in local communities and charities.  More franchisors are showcasing and celebrating this “independent operator” aspect of franchising as a competitive advantage over what other nonfranchised brands who typically don’t give managers the authority or budget to get involved with the community.   For instance, CiCi’s franchisees go out of their way to sponsor teams and host school nights.  In addition, cause marketing attracts viable franchise candidates who look for more meaning and purpose in their lives.
5. Importance of Trust in Recruiting. We have written many articles about how franchise candidates look to join companies and do business with people they trust. The role of the franchisee recruiter as “trust agent of the brand” came up in almost every session and roundtable on franchise recruiting. In an effort to build more trust and transparency, some franchise companies such as Planet Beach added more meaningful content on franchise sales websites.  Recently, Chem-Dry contracted with us to develop a 30-50 page brand story and franchise information report franchise candidates can download free from their franchise opportunity website.  Franchisors are thinking more about how to develop and maintain high levels of trust levels and are paying more attention to online reputation.
6. Storytelling as franchise sales and marketing best practice. If you ask a customer about  your brand, chances are you are not going to hear about graphics standards, font sizes, signage, and logo usage. They are more likely to tell you what the brand means to them.  You will hear stories about clean or dirty restrooms, helpful or harmful service, and other success or war stories.  Put another way, you will hear  narrative about the brand.   Franchisors are looking to have a greater say in how their story is told and to whom.  Content strategies – the art of corporate storytelling – is changing how people think about marketing.  We predict more brands will hire writers and storytellers to create engaging and trustworthy content.
7. Less Litigation – the new franchisor badge of honor is, “We have no current or pending  litigation in our FDD.”  Smart franchisors are learning that litigation and other forms of infighting is an expensive distraction, poisons the culture, and diverts resources from the core business.  On top of creating insurmountable negative franchisee validation, litigation is often tried in the court of public opinion in cyberspace before it makes its way in the courtroom, leaving a permanent virtual scar on the brand.  Public opinion almost always tips towards the disgruntled franchisees.  Franchisors will find more ways to avoid litigation and stay in win-win problem solving.


The Most Popular 2012 IFA Roundtable: Lead Generation Strategies

8. Importance of a Skilled Recruiter - Many franchisors do not have the discretionary budget to spend more money to generate more leads.  There is a premium on franchisee recruiters who are on the top of their game.  A franchisor’s top recruiter often is 100-300% more effective than the average recruiter with the same leads.  More than once we heard, “I am looking for a franchise saleseperson, but I need someone good, not another typical ‘retread’ from another company.”  Experience is no longer being confused with competence and productivity.  Franchisors are going to to invest more time and money in the professional development of their recruitment staff and they will find a significant return on this investment.  For instance, Rob Goggins of Great Clips cited a 300% increase in conversion ratios as a result of a focus improving his department’s skills.
9. Referrals and Referral Programs For Franchise Recruiting . The franchisors who generate the most referrals are not the ones who pay the highest referral fees.  They are the ones who maintain positive relations with franchisees and make the most requests.  Smart franchisors are systematizing how and when franchisees are asked for referrals and are more strategic and organized in their approach.  Asking for referrals is moving from an afterthought to an integral part of the overall lead generation strategy.
10. More Intelligent Use of Item 19. Franchisors are becoming more sophisticated in how they present Item 19 data to their candidates.  Smart franchisors are using the Item 19 as a way to improve brand narrative, as a way to tell a better story to their franchise candidates.

What were your take aways from this year’s IFA?

At its annual Sales and Leadership Conference, Franchise Update reported a milestone development that could forever change the way franchisors generate leads.

For the first time in the history of the Franchise Update’s report, the top lead sources for new franchisees were referrals with the “internet” right behind it.  Organic search — people using the web to search for information themselves — topped the list of internet referral sources.

This has never happened before.

Referrals and organic search results are the lead sources to watch.  Not advertising, not portals, not brokers.

To examine why this and the possible implications, let’s look back to the September 2008 stock market crash and global financial collapse. People most of us didn’t know, couldn’t influence and weren’t accountable to us, such as fund managers and mortgage brokers dealing in subprime mortgages, wiped out as much as 50 percent of our net worth through questionable, sometimes unethical business practices. How did these events alter how we make investment decisions today?

Taken at a recent Franchise Update Sales and Leadership conference

Or look at the job approval rating of Congress, according to Gallup: 13 percent, the lowest point in the poll’s history. Or consider the Tea Party and Occupy Wall Street movements, which — regardless of your positions on them — reflect deep dissatisfaction with government and big business.

What do all these seemingly unrelated events all have in common?

A breakdown in integrity and trust.

We’ve moved into an era where trust and integrity are of paramount value. We’ve moved away from accepting “situational ethics,” in which all behavior is OK as long as the end justifies the means. We champion the people and institutions we trust and loudly condemn those we don’t.  Trust is something a company has to earn; no longer is it freely given.

The public’s skepticism of institutions is affecting franchise recruitment. As experienced franchise experts, we’ve seen a consistent and steady decline in a franchisor’s ability to reach candidates who requested more information.  Candidates are suspicious of anything that sounds like hype or a sales pitch. People have become increasingly skilled at avoiding franchise salespeople and filtering out anything that looks or sounds like a sales message, and they recoil at filling out forms.

This shift has had a profound effect on franchise expansion in 2011. Across the franchise industry, salespeople are having trouble connecting with candidates at the front end and closing the leads they do contact.

At the Franchise Performance Group, we believe we are in a new economy, The Trust and Relationship Economy.

In this new economy, franchise candidates will choose when they want to contact a franchisor based on specific, unique brand information they’ve found on their own. In other words, they will want to contact you only when they have satisfied their appetite for information about your brand and have obtained answers to common questions.

Lead generation, just like a franchise recruiting process, has to be consistent with the way people buy.

Lead generation sources that build trust, such as online content franchisee candidates find through organic search and referrals, are emerging as the most productive source for highly engaged leads and successful closes. We predict that paid advertising and information sources that franchisors control (franchise portals, print advertising and pay-per-click) will provide fewer and less engaged leads.  And the “engagement gap” will continue to widen over time.

Say you’re thinking about starting a business. Which scenario would make you trust the franchisor most?

• You navigate through a cluttered franchise portal and, finding only a couple of brands that pique your interest, click on their names and find only a single page of information — with no link to learn more, no phone number, no email address. The only option is to fill out a form that says “request more information” and disclose your phone number and email address. Within minutes of filling out the form, a franchise salesperson calls you even although you are not ready to talk because you want a chance to read more information.  Or a franchise broker calls, although you don’t remember giving the portal permission to share your contact information.

• You start investigating the possibility of opening a franchise which sells a product you love. When you go to the company website, there is a tab titled “franchise information.” When you click on the tab, you get a few sparsely worded pages with generic information about how you can “take control of your life” and “be your own boss.” You are curious, but to learn more, you have to fill out a form and talk to a franchise representative.

• You type the search term “How to start a BBQ restaurant” into Google and come up with several articles about a barbecue restaurant franchise that’s expanding from 12 to more than 50 locations and has excellent reviews. You enter their franchise website through a blog article titled “How to start a BBQ restaurant” and realize they have targeted your city for expansion and have a location available.

• You look on a franchise company’s website and find a written interview and video of a franchise owner with a professional background similar to yours. The owner has found great success as a franchisee and seems genuine, sincere and happy with his work.  His remarks clearly are spontaneous and unscripted, and the interview doesn’t sugarcoat the challenges of franchise ownership or ring false.

The first two scenarios reflect “old school” lead generation tactics designed to tease candidates and force them to give out their personal contact information in return for basic details about the franchise. Is that the way to build trust? Do most candidates return calls and emails or simply check out and disappear? And why is this?

The next two reflect the new, Trust and Relationship reality of today’s economy. Leads from these sources are far more likely to enter the franchisor’s process with a high level of trust and engagement.

People trust companies that are open, transparent, and forthcoming with information. People avoid companies that are heavy-handed, controlling, and secretive.

Here is the direction Franchise Performance Group predicts lead generation will head:

Smart franchisors will move away from lead generation vehicles that generate the most names and toward maintaining the highest visibility with the lead generation vehicles franchise candidates are most likely to trust.

The implications:

Companies will spend more money on content strategies that drive franchise sales results. Franchisors will start to pull back on portals, traditional PR, pay-per-click ads, print advertising and some may resist paying high broker fees. Franchisors will reroute more of their resources to content-heavy websites, blogs, online PR and social networks, and they’ll focus on creating engaging content strategically optimized to improve organic search position. Franchisors such as VooDoo BBQ & Grill in New Orleans — a company that’s using sophisticated and intelligent online content strategies — are growing by leaps and bounds. There is no substitute for highly visible content that candidates can trust.

Companies will take responsibility for broadcasting their story. Rather than rely on traditional PR firms, media outlets, and the public’s imagination to shape what customers and franchise candidates think, companies will begin publishing consistent streams of positive content on their franchise websites, business blogs and on social networks.

Vendors that specialize separately in SEO, website development, PR, and copywriting will lose business to tech-savvy companies offering integrated services under one roof. Managing and integrating the work of multiple firms is complex and expensive. From now on, “content strategy” or “brand journalism” firms that do PR, manage social media, create content for franchise websites and manage organic SEO will dominate. These firms can development content for franchise development websites that help build franchise candidates’ trust.

Companies will rely more on organic SEO and business blogging. Organically searched reservoirs of well-written, easy-to-locate, and meaningful content will become more valuable than traditional PR and broadcast media “here today, gone tomorrow” placements for finding good franchisees. Unlike a newspaper, which reaches the masses today but line sa birdcage tomorrow, online content can be targeted to your specific needs of your target franchisee and produce leads indefinitely. Franchise websites built around a blog of regularly changing, consistently interesting, and well-written content are going to see much higher ranking on Google thanks to recent changes to its search algorithm (read about Google Panda). Targeting more key phrases means many more blog articles and web pages and that means every page is now a potential home page. Sixty percent of your franchise web traffic will skip the home page all together. Expect to see more writers and marketing firms getting into strategic organic optimization and expect this to alter how we generate leads and create emotional engagement.

Companies will develop their own content-heavy franchise opportunity websites. Gone are the days where a franchise website is a six-to-eight-page online brochure. Today, a franchise opportunity website is a brand’s home base, the anchor for all its other online content.  By now a franchisor’s franchise opportunity website should have evolved from something static to an “online news source” with multiple paths of new and updated news and information.  Because more candidates are keeping their distance from the franchisor’s representatives, the franchise opportunity website needs to provide more detail and be more engaging than ever before. And for franchise candidates who are noodling around the opportunity but just aren’t ready to commit, franchisors should keep them coming back by offering information and content which keeps them informed while encouraging them to take the chance. That’s where the franchise development blog comes in. In addition, some franchisors publish comprehensive, downloadable franchise opportunity e-books or more detailed executive summaries that demonstrate precisely how the franchise makes money and is sustainable in the long run. Small business IT consulting franchise CMIT Solutions, Inc. recently implemented this strategy paired with a content-heavy website, and the conversion rate increased dramatically.

Companies will use social media as a web traffic generator. Last year, the franchisor scuttlebutt about social media was, “Social media don’t generate leads.” This year, franchisors correctly changed their tune. Now many say, “Our social media strategy is not generating leads.” We predict more franchisors will begin to use social media platforms to drive traffic from Facebook and LinkedIn, the two important platforms for lead generation, to their franchise opportunity websites through news and topical conversation, where franchisors can do a more complete job of telling their stories. This will involve content creation, ongoing engagement and custom Facebook tabs with such things as downloadable documents. Our early results for clients who implement such a strategy show well-executed social media strategy will represent 15 to 25 percent of the overall traffic to a franchisor’s franchise opportunity website and contribute up to 20 percent of their deal flow.

Franchise systems will let their competition generate leads for them. When you maintain high visibility online offering robust content on your industry, you’ll find that franchise candidates evaluating other franchise systems in your category can easily find your website and be persuaded to shift gears and evaluate your opportunity also. Comparative shopping has become a standard part of online research of franchise brands; companies that have optimized, well-written content will stand out to candidates already researching competitive brands. The brand with the most engaging and visible content wins. It’s not who creates the interest that matters, it’s who recruits the franchisee! It’s not how the process begins that matters, it’s how it ends. And the franchise systems with the visible, credible, and engaging content will have the most happy endings.

Franchisors will have to cultivate referrals. How much money and targeted effort goes specifically to generating referrals from franchisees? According to Franchise Update, franchisee referrals were the second-most effective source for finding new franchisees.  Franchisee referrals are also one of the best sources for top performers. Here’s what we’ve learned about franchisee referrals: Paying referral fees, while necessary and a good idea, is not what drives referrals. Franchisors earn referrals by forging excellent franchisee relationships and producing excellent financial returns. And franchisors who’ve earned the right need to consistently ask for referrals. All the time. Surprisingly few franchisors have consistent outreach programs to solicit referrals from franchisees and even fewer spend marketing dollars on generating these leads despite their obvious value.

Action Steps

Take a fresh look at where you are spending your precious advertising dollars. Are you maximizing your efforts with the lead generation sources franchise candidates can trust?  Is your lead generation strategy consistent with the new way franchise candidates find and invest in businesses?

Don’t assume that spending more on the same forms of lead generation will get you closer to your recruitment goals. Take a step back and analyze how you are doing and how you fare against your direct competitors.

Publishing good content for franchise development not only jump-starts high quality internal lead generation, it also affects all of your other franchise lead generation. It helps with brokers, helps engage customers and can have a large impact on paid advertising. You might be surprised at how poorly you fare and how damaging your lack of quality content is to your expansion plans.

FPG Blog Readers are Eligible for a Free Consultation with a Lead Generation Expert.

FPG has teamed up with Thomas Scott from Brand Journalists to evaluate the current effectiveness of your organic SEO, Website content, PR, and social media strategy.

Thomas is expert at creating engaging online content and knows how to position brands so they build trust with potential candidates, earning  leads that are more likely to buy. His tactics are producing some of the best lead generation results in the industry today.

Before you split up your budget for 2012, get some feedback on what you are currently doing, see what is working and, most importantly, see how you fare in direct comparison to your main competitors.

Learn how for the price of a traditional PR firm or an SEO campaign, FPG and Thomas Scott can create a content strategy designed to:

• Maximize your organic SEO and online visibility with well-written and engaging content
• Tell a compelling story that breaks through the filters and noise
• Leverage the best elements of your positive franchisee validation to influence leads
• Drive quality traffic to your franchise opportunity website
• Manage and improve your online reputation so researchers find positive reinforcement about your brand
• Improve franchisee and customer referrals
• Develop content designed to both generate new leads and keep existing leads engaged in your process.

To schedule an evaluation of your current lead generation, contact Thomas Scott at tscott@brandjournalists.com or 615-483-4923.

See these trends reflected in your lead generation? Share your perspective by commenting on our blog.

Deb Evans, President of Computer Explorers, speaks at FranCamp in Nashville

Last week I presented at FranCamp, a franchise social media camp and the brainchild of Thomas Scott of Brand Journalists and Deb Evans, President of Computer Explorers. The event was geared to those in franchising like me who are really hungry to learn more about where this “Blogging, Twitter, and Facebook thingy” is going. Here are my 4 key takeaways:

1.  Social media content is an effective tool to improve franchise sales results.  This strategy requires a three-prong approach, working together simultaneously.  The first prong, such as optimized blog posts and PR, is designed to drive traffic to the franchisor’s franchise opportunity website.  The second prong is a content rich website, and social media content such as testimonials and franchise development blogs.  The third prong is a steady stream of content (such as  email newsletters, social posts and drip campaigns) designed to educate and engage leads who are already in process to keep them engaged and moving forward.  Franchisors who fail to plan a content strategy into their recruiting campaign will get passed by those who do it successfully.

2. The “less is more” or “more is more” content philosophy for designing franchise opportunity websites has been determined. More is more!  Content rich and emotionally engaging franchise opportunity websites with a heavy emphasis on blogging are going to become the norm in 2012.  Thinly constructed franchise opportunity websites or tabs connected to the franchisor’s consumer site will start to disappear; they don’t do an adequate job of telling the franchisor’s story.  The message is not relevant to the consumer.

3. Lead count is out.  Emotionally engaged, qualified, buyer-ready franchise candidates are in.  Franchisors are starting to see how meaningless the conversation about generating more leads is.  Franchisors will use websites and other online content to allow leads to qualify themselves and give them more information to help them determine upfront whether or not the candidate sees a match.  Franchisors will see fewer leads, but more emotionally engaged leads with a higher close %, perhaps in the 5-10% range, like franchise broker leads. Remember – it only takes one lead to sell one franchise. Focus on quality engagement and you’ll see fewere leads, but better results.

4.  Franchise portals are out.  Organic SEO is in.  Franchise portals shot themselves in the foot and killed the golden goose.  In an effort to boost revenues by shooting many franchisors the same leads, portals have killed off the engagement level of many of the leads they generate.  Because Google has changed their algorithms to find more relevant and recent content, static franchise opportunity portals will start losing web traffic and franchisors with the right type of franchise website will be able to drive their own traffic to their franchise opportunity website.  Franchisors will shift budgets away from portals and towards website design, PR, social media, and content development.  Franchise portals will slowly die out in favor of franchise companies spending resources on internally generated leads

Social media is now part of the integrated approach to lead generation and it affects every part of the recruiting process.  If it doesn’t work for you, I believe it’s not because social media and content doesn’t work, it’s because your strategy and approach isn’t working.

If you missed FranCamp, they plan on holding more similar events.

I’m traveling back to Nashville from the 2011 Franchise Update conference, one of the premier events for anyone responsible for franchisee recruitment  results.  The IFA reports franchisors added 19,000 new units since the same time last year.  While this is up from last year, when one considers the unemployment rate is 9% and Gallup estimates almost 30 million of the existing workforce is underemployed, there is a huge bubble of people who can throw their hat in the ring and start a franchise if finances allow.

Previous Star Winners from the Franchise Update Conference

While most franchisors in attendance were not hitting their growth objectives, many reported increases over 2010 and deal flow was up overall.  Traditional lead sources are not producing the predictable number of deals they used to.  Franchise sales metrics  are changing to reflect changes in buyer behavior.  For instance, “Star Award Winners,” those designated as the best-of-the-best in franchisee recruitment, struggle to reach 30% of their inquiries and tell their story.  Many Franchisees who signed up during the go-go times of 2000-2008 in retrospect should never have been awarded a franchise and they require more levels of support than thinly stretched operations managers can provide.

Negative franchisee validation is hurting franchise sales and lower than should-be average unit sales is hurting franchisors’ ability to access more expansion capital.  This “double whammy” is driving franchisors to focus on the fundamentals of their business, such as increasing franchisee profitability.  Here are some of my other big take-aways from the event:

Franchisors who grew the most claim the strong unit level economics and trusting relationships with franchisees. Implications: the greatest predictor of future growth is current franchisee satisfaction level and profitability. No surprise here.  The real surprise was how frequently the importance of training and operations came up in a conference dedicated to franchise sales! When I sold franchises, there was often tension between franchise recruiters and operations staff.  Today, franchise salespeople seem to have a much deeper appreciation for what operations teams are up against, how hard their jobs are and what their impact is on franchisee recruitment results.  I would expect more franchise sales and operational support group hugs in the future.

The greatest source of new franchisees was franchisee referrals. Steve Olson, Publisher of Franchise Update, indicated franchisee referral has never before been the number one source of leads in the survey’s long history.  Implications: franchisee and customer referred leads are often a better culture fit, don’t often shop multiple opportunities,  and certainly less expensive to generate. Franchisors understand they need to invest more time, money, and energy to farm these leads.

Future of franchise brokers and consultants. There was a general sense among many attendees using brokers that broker fees are starting to exceed their perceived value and some broker resentment is kicking in.  Franchisors in attendance often spoke about wanting to break their franchise development department’s dependency cycle on broker leads.  Several franchisors reported 60% or more of their deals come through the broker networks. Implication: the average acquisition cost per close with a broker was above $20k. This is more than double the norm for all other sources – $8-10k. This kills margins from the franchise fee and over time may negatively impact a cash-strapped franchisor’s ability to train and support new franchisees while they are waiting for royalties to ramp up to acceptable and profitable levels.  If franchisors relearn how to generate their own leads and crack the code for lead generation through social media and organic searches, more and more franchisors will sever broker relationships or refuse pressure to increase commissions.

Focus on engagement vs lead count. Franchisors are moving  away from “how do I generate more leads” to “how do I engage qualified buyers.”  This is a game-changing attititude shift.  Expect more franchise systems to change advertising spending away from “more and more” leads to focusing on reaching fewer, but a more targeted and qualified lead pool.  Expect some franchisors to crack the code in how to use social media and targeted PR to drive traffic and improve search positions in order to fill their pipeline.  In addition expect franchisors to make more strategic investments in creating content to keep leads engaged throughout the process.

Franchise development websites are more important than ever. Several franchisors shared web analytics from  their franchise opportunity website.  The  average time spent on the site was 3-5 minutes and average bounce rates were about 60% or more.  There is an evolving shift in website design and use of content today. Implications: franchisors need to engage candidates online and inspire them to want to learn more. Stop thinking of your website as an eight page brochure and start thinking about it as a daily newspaper with you as the publisher. The website is no longer a teaser designed to get someone to fill out a form; it is your home base online. Publish as much content as possible  to tickle the interest of your target candidate and work hard to increase time on your site and reduce bounce rates for your core content. A shockingly small number of franchisors maintained a consistent franchise sales blog or post content designed to keep engaged leads coming back during the sales process even though this is the easiest way to improve the important website metrics.

Greatest source of Internet generated leads was organic search engine results and not portals. With Google’s Panda update to the search algorithm and more franchisors ditching flashy, highly animated websites in favor of WordPress-driven, content heavy, and search engine optimized websites with an integrated blog.  Expect franchisors to invest more in smart organic SEO lead generation and content strategies. Panda provides franchisors and immediate opportunity to drive traffic away from the  portals and towards their own franchise sales websites.  Implications: time to rethink and possibly reinvent your franchise development website.  In addition, franchisors need to get ahead of their competition and develop  a finely tuned, consistently executed content strategy to drive traffic to their website, to intersect leads who are actively engaged in a competitor’s process,  and keep candidates engaged in their own process.  While it may not be easy, and may not be inexpensive, all indicators point to the idea, “content is king” and  it will yielding long term results to those who stick with it and crack the code.. The more visibility you have online, the greater your ability to engage more candidates.

More rough economic times ahead. Darrell Johnson of FRANdata reported economic trends were not favorable and expects more uncertainty and “ups and down” of the market.  Implications:  franchise salespeople are going to need to deal with and overcome candidates’ fear of the unknown.  Simply put, franchisors are going to need to train or ditch mediocre recruiters.  Their job is going to become increasingly harder and will require new skills such as writing and social media savvy.  Franchise recruiters will need to need to do more with less leads.

The renewed focus on franchisee profitability is changing franchisor’s franchisee recruiting approach. A sales and marketing consultant from outside of franchising took me aside after a session I moderated and asked in disbelief, “Why isn’t anyone talking about selling?  I thought this was a sales conference?”  Franchisors have switched from talking about sales language such as “closing deals,”  “trial closes,” “features and benefits” and “hot prospects”  to using ‘recruiter language’ such as “educating the candidate,” “fit” and “probability of success.”  Implications: Franchisors may need to retrain franchise salespeople in recruitment skills (such as interviewing and active listenting) rather than sales techniques; candidates have become expert at recognizing when they are ‘being sold’ and are amazingly good at filtering out advertising messages. Good recruiters are going to learn to let candidates sell themselves on your franchise.

Content, content, content. Scott Klososky, social media expert, opened attendees’ eyes with the power of relevant content and the impact of steady streams of engaging content on buying behavior.  Implications: franchisors are changing their perception of social media from “it doesn’t work to recruit franchisees” to “my current strategy doesn’t work.”  I would expect franchisors to make key investments in development of more engaging content, reaching people sitting on the sidelines who already have a relationship with their brand or use the content to develop this relationship. Some franchisors are getting good results using content strategies and I’d expect more to do the same.

Create an incentive for franchisees and customers to recruit.  Some franchisors are paying 10K or more to franchisees and customers who refer leads.  Franchisors pay a broker $20k or more for a qualified lead, yet the most engaged leads often come from people who know existing franchisees and have already seen and experienced the business firsthand.  Implication: franchisors will start paying internal referrals more often and doing more to enlist the support and help of existing owners.

Don’t forget mobile marketing. Few franchisors appear to be using text messages and mobile marketing to request initial appointments.  Seems so obvious, but few are doing it.  Implications: we are all too old!

Did you attend Franchise Update? What were your big takeaways?

Joe Mathews, Founder of Franchise Performance Group

All franchisee recruitment involves having conversations.

Did you know that in every conversation you have with your franchisee candidates there are three conversations occurring at the same time?

They are:

1.     The conversation between the franchise candidate and the  recruiter

2.     The conversation the franchise candidate is having with himself or herself

3.     The conversation the recruiter is having with himself or herself.
(Yes, recruiters talk to themselves!)

Typically, a recruitment conversation goes something like this:

Franchise Recruiter: “How have you been doing – I wanted to check in to see how your validation calls are going.”

Candidate: (To herself) “Should I share my real concerns or just tell him everything is fine?”

Candidate: (To recruiter) “Everything is fine.”

Franchise Recruiter: (To himself) “Sounds like something is wrong.  Should I ask if she has concerns or should I assume everything is fine?”

Franchise Recruiter: “Great to hear! The next step in our process is….”

All “go” or “no go” decisions occur in conversation #2, the conversation the candidate is having with themselves.  But not all of these conversations make it back to the recruiter.

What average recruiters do
Rather than probing to get to the bottom line of conversation #2, the underperforming franchise recruiter spends too much time either gathering meaningless, surface level information in conversation #1, or plotting what they will say next in conversation #3.

What the best recruiters do
The best-in-class franchisee recruiters know how to bring conversation #2 out in the open. This enables the recruiter and the candidate to have an open and honest dialogue about what’s really going on.

Skills to develop
This requires the average recruiter to acquire expert interviewing skills, highly refined listening skills, and the ability to create safety and trust in the relationship.  If the candidate doesn’t feel safe, heard, and understood, then they will withhold critical information as to where they really are in their buying decision, which diminishes or eliminates the recruiter’s ability to impact the final outcome.  Bottom line, they keep conversation two to themselves.

How to access conversation number two
Several things have to occur for a candidate to want to share what they are feeling or experiencing:

1. The franchise candidate has to believe they are dealing with a highly trustworthy and credible recruiter who has their best interest at heart.  Put another way, high pressure closers need not apply.
2. The candidate sees the recruiter as “safe.”  This means they feel that the recruiter won’t convince them they are wrong, pressure them, overcome their objections, or try to play with their emotions.  They just want to be heard and understood, and perhaps gather some professional assistance in sorting their issues out, regardless of the direction the sorting takes them.

If this relationship has not been established early in the process, then the candidate will most likely try to create some distance during decision making time by telling the recruiter what they think they want to hear or clamming up rather than what is really going on.

Five simple questions which will immediately bring you into conversation #2:

1.     “When you said (whatever it is they said), what did you mean by that?”
2.     “Can you give me an example of what you are talking about?”
3.     “I hear some hesitation. Can we talk about what gave you pause?”
4.     “Since my goal is to understand where you are coming from, what didn’t I ask you that I should have?”

It is our experience that those recruiters who learn how to regularly gain access to conversation #2 will increase their results from 15-100%, translating often into hundreds of thousands dollars in franchise fee revenue and millions of dollars in the lifetime value of royalty fees.

They won’t work harder, need more leads, or put in more hours.  They will be far more effective with the same time, money, and energy invested.

Most franchisors are fighting tooth-and-nail to get the attention of qualified franchise candidates.  Recruiters can no longer rely on the next lead to hit their objectives.  Recruiters will need to produce more with less by being more effective with the leads they have.  And gaining consistent access to candidates’ conversation #2 is absolutely the way to go.

Read “How Strong is Your Validation”  by Joe Mathews, Founding Partner of FPG, in this month’s Franchise-Update Magazine.

Let’s assume you are a franchisee recruiter in a conversation with a franchise candidate, and you ask the candidate “Why do you want to start a business?”  The candidate replies, “I want to be more independent and make my own hours.”

This is all the average listener will hear and then they will move on in the conversation.

The good listener will pause and probe more than the average listener.  They will ask more follow up questions such as, “What would ‘more independence’ look like to you?” and “If you had more independence, what would you do?”  They may also ask about what they didn’t hear.  “I noticed that your financial objectives are similar to what you earned before you were downsized.  Does that mean that quality of life right now is more important to you than an increase in earnings?” Then they too would move on.

The excellent listener will still keep probing. “Why is having more independence so important to you right now?  What happened that this is so high in your priority list?”  They seek the opportunity to get into the franchise candidate’s world and try to see it through their eyes. Then they too will move on.

The masterful listener takes the conversation one step further.  They repeat what they heard to communicate to the candidate, “I hear you clearly and I get you.”  This leaves the candidate with the experience, “I get that you get me,” and they create a bond.

Why is this important?

Think of how many conversations you have during the day. When was the last time you felt so completely understood, you said to yourself, “Wow! They get me!”

Michael Mudd, the recruiter who doubled his results, told me, “I love to playback what candidates tell me.  Something magical happens to our relationship when I do.  It’s like sprinkling pixie dust on our conversation.”

If you were a franchise candidate, which of these four listeners would you trust with your family’s financial future?  Who would you want to do business with? Who get’s you?  Who’s got your back?

Aristotle said all persuasive arguments have 3 common elements and gave these elements really cool names (which suspiciously sound like the names of the Three Musketeers)

1. Ethos
2. Logos
3. Pathos

Ethos means the person delivering the message has to appear credible and likeable, and preferably should not have attended public schools.  Aristotle for instance maintained a reputation for being a highly credible source of information to people of his day because rumor had it, he was trained by the nuns.  In addition, the name “Aristotle” is a “smart name.”  People knew anyone named “Aristotle” had to be an irritating egghead.  “Aristotle” was to the ancient Greeks what “Poindexter” or “Eugene” is to people today.  Keep in mind it is only recently “Aristotle” has been downgraded to a dog’s name. 

Also, he knew the Ancient Greek roots to most of the words he used. 

Lastly, he wore a toga.  Back then, togas were the Greek equivalent of donning a cardigan sweater and Harris Tweed sport coat with suede elbow patches and sporting a monocle.

In addition to being credible, he taught effective communicators also needed to be relatable or likeable.  Aside from being intelligent, Aristotle was also known for possessing dry wit.  When students praised his superior intellect, he would often say things like, “Hey, don’t put me too high up on a pedestal.  I don’t want you to look up my toga!” 

And he retained his credibility throughout his life time, largely because without the internet, no one exposed his blatant plagiarism of Alexandre Dumas’ The Three Musketeers.

Logos means an effective communicator has to be rational.  The person delivering the communication needs to make sense and draw logical conclusions from the available data.  The communicator can use data, logic, and sound reasoning to prove one’s point, disprove another’s point, or challenge the status quo.  Rational buyers faced with more intelligent solutions than they are currently using will often gravitate towards the better solution as long as their budget allows.  For example, at one time public schools used to teach Phonics to elementary school children.  Then one day a text book company came out with “the whole language” approach to teaching English.  Needing to make their quotas, text book salespeople eagerly pointed out to school boards, “If Phonics is so important, why do they spell it ‘phonics’ instead of ‘fonix?’”  Nodding in agreement at their flawless logic, school board members eagerly snatched up the new text books like drunk fraternity brothers grabbing for the last slice of pizza.

Pathos means the communicator should craft a message which leaves the listener emotionally engaged.  If the listener cannot personally connect to what is being said, the communication gets filtered out or the person delivering the communication gets summarily dismissed.  For instance, in the movie Annie Hall, Alvy Singer (played by Woody Allen) snuck into bedroom during a friend’s party to watch a New York Knicks Game.  Annie Hall (played by Diane Keaton) happened upon him and sat down to watch the game and strike up a conversation.  Looking for common ground, Alvy asked her if she liked or played sports.  Annie Hall replied, “I swim.”  Alvy flippantly responded, “Swimming isn’t a sport.  It’s what you do so you don’t drown.”  Alvy couldn’t give a flying fig about swimming so Annie Hall didn’t score any points with him.  Maybe this isn’t a great example because as the movie progressed, they ended up having a love affair.  But in the end they had a painful break up so maybe it’s a great example after all.

In conclusion, if you follow Aristotle’s three simple rules, you will always have sales success.

1. Don’t name your child Poindexter or your dog Aristotle, even if it’s a smart kid or dog.
2. If you wear a toga, keep your legs crossed when sitting.
3. Remember “creativity” is just another way of saying “undetected plagiarism.”  Don’t worry about crediting your sources.  Like Aristotle, may you can become rich and famous and chances are you won’t get caught.

And finally, learn to swim.  Water safety is no laughing matter.

Details why everything we know about time management fails.  Read it when you have time. http://www.entrepreneur.com/article/21955