>

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?

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.