Franchise Sales: A Tale of Two Theories

franchise_salesA couple of years ago, there was a discussion in the Franchise Executives group on LinkedIn with the posted question, “Who is using outside franchise sales groups [brokers]?”

Below are some interesting responses from group members that are not franchise consultants or brokers:

An experienced franchise executive stated:
“Why wouldn’t you develop your own small sales group? Using a service that sells multiple franchises diminishes your quality control to some degree. I have been a part of 2 franchisors for 25 years and neither has ever used any of these groups and we have had lots of success. What are you trying to achieve by using these”groups”? Lower cost of acquisition, less hassle, expecting more leads, more foot soliders?”

The president of a national franchise concept wrote:
“We do not work with an outside group. In talking with our prospects it seems important to them to know that our development staff are part of the company and experts on the concept they are selling. We even have a dedicated sales team for each concept. My advice is to talk with some of your new franchisees to see if it would have made a difference in their decision making process.”

A franchise attorney posted his response:
“…if you use an outside broker in the true “sales” role, they can lose credibility if they appear detached and not knowledgeable about what they’re selling (often happens when your brand is only one of many in the broker’s portfolio). That should factor into your due diligence process when you’re looking at outside brokers. But when the relationship stays between the franchisee and the sales person, the prospect’s going to be let down when that sale is done and the sales person is on to the next prospect. Besides, I always wanted my sales person’s relationship with the prospect to taper off once the sale was done – the franchisee’s relationship should be with someone on the development then someone on the operations team. Two points – first, I always caution my clients to use brokers more as “matchmakers” rather than “salesmen.” What should really “sell” the franchise is not the sales person (internal or external) or the broker, but the confidence that the prospect has in the brand and in the ability of the management team; and, second, if my clients use outside sales people, I always make sure the outside sales team attend the same training I give my client’s internal team and do so at the same time. That way the outside sales folks get entrenched into the company’s culture, they know what to expect from management, they see how to use management to “sell” the franchise, and they know what management expects of them.”

A Vice President of a national franchise concept went on to write:
“For a variety of reasons I’m personally a big believer in building sales teams from within the company. But then again I’ve had the luxury of working for established franchisors and had resources to either develop salespeople from within the company, or rely on referrals to hire from outside and train them to become franchise salespeople. Both methods take time – generally about 12 months for a franchise salesperson to really “hit their stride”. Many franchisors don’t want to wait that long, or can’t wait that long, or don’t know how to train franchise salespeople. In those situations it may make sense to bring on outside franchise sales groups.”

So, that’s what franchise professionals were saying a couple of years ago… but what about today? Please, let us know your thoughts!

Social Media – What’s Holding You Back?

In my effort to simplify social media within franchising, I have explored how other small businesses have embraced social media, and if they haven’t, what is holding them back. The comments pertaining to holding back are quite interesting. I’ve listed some below in order that our readers may see how others are addressing their concerns about using social media within the business world. Some individuals who work with clients expressing similar concerns about social media have also provided advice that I believe our readers may find useful. Upon reviewing these answers, comments and suggestions, please let me know some of your own concerns, as well as any comments or questions you may have.

Hesitant about Twitter

“Paul.. while I use Social Media sites for professional reasons such as Linkedin, and Blogger, I am hesitant about Twitter. I have been doing a lot of personal research on it, and getting opinions, and I’m on the fence.. I could go either way. My main fears with Twitter are being overwhelmed with spam, and followed by people who have nothing to say.”

I’m not a very good writer…

“Great question. When I listen to my clients and their concerns about using social media, particularly blogging & Twitter, one of the things I frequently hear is this: “I don’t know what to write; I’m not a very good writer; what if no one likes what I have to say?” etc. etc. I simply encourage them to jump in and find their voice as they go along, get more confident and build their brand. I totally get their concerns, though, as I think back to the first blog post I ever wrote, circa first quarter 2006 — I think I must have spent four or five hours (or more) trying to get it “just right.” Now I don’t fret, quite so much! Also, one of the other things I say to encourage clients to blog or use Twitter, is to let them know they have so much talent / knowledge to share and it is simply another way of giving back what they’ve been given.”

Misconceptions about Social Media

“Cost. A misconception about social media is that is a free or low cost alternative. But typing and building relationships takes time – people time – and time costs money. If you have no marketing budget, then you have no budget to pay someone (or yourself) to do the social media legwork. Social media, like all marketing efforts, shouldn’t been selected because it’s the cheap choice, but because it is the right strategic choice. With limited data to support real ROI impact of social media, particularly for B2B products and services, it makes it very difficult for a small business to take it seriously (considering small business’s limited budgets) over traditional direct sales and marketing activities.”

Market Your Way out of the Recession

“Some good answers here. Nothing is free these days, but when money is tight, businesses need to resist the easy way and stop marketing. We all know the adage about the need to market one’s way out of a recession. When the economy is tight, businesses need to think outside the box and look at innovative ways to market their business in the most cost-effective way, and preferably in a way that can be tracked. You don’t need to spend a massive amount of time, but 20 minutes a day looking after a business page on Facebook, adding photos that might attract fans and get your message across, is just another way of increasing your exposure.

I agree that, as a B2B tool, Twitter has not yet proved its worth, but it is another way of driving traffic to your website which, along with blogs, articles and other SEO methods, will all help to improve your organic search engine placement. I use it increasingly to gather information that I can pass on to clients (that enhances my reputation as someone who has an understanding of emerging trends and, very importantly, changes in consumer behavior). As a B2C tool, Twitter is proving to be very successful, and you don’t need to be an expert in copywriting. You just need to be yourself.”

Identifying, Defining & Organizing = Social Media Power

“For myself, spamming and just nonsensical chatter in a day already full of meetings, emails, contracts, books, blogs was overwhelming an already busy schedule. At some point, too much data had converted powerful information into just symbols on a page that I constantly had to decipher through to reach answers and wisdom. After taking time to identify and categorize the various social media sites and ultimately define the purpose each could serve in my personal and professional life, I have come to understand the power at my fingertips to use this as a tool to engage and connect with others.”

Does Social Media really work?

“For most of my clients and businesses that I follow, it seems like it is the lack of budget and resources. Social media is a time-consuming exercise and many executives doubt its profitability. So, really, the biggest hold back is the lack of tracking to prove that social media works.”

Apprehension & Confusion

“The clients that I serve are apprehensive about investing the time, energy and effort into social media. There is a lot of confusion as to how to monetize and capitalize using the social media. I also find that if they are baby boomers they may not be computer/tech savvy which also results in paralysis. There are so many things they are already doing…they just want to know that they can maximize and not waste time which may not bring in results.”

A Good Start… But Questions Remain

“While I use social media to advance our business, I believe that most people who do not use it are either not educated on it or don’t believe they have time to deal with it or don’t believe their clientele use it to purchase. I was on the fence about doing it myself as most of our clients are property managers and claims adjustors. While some of them have Facebook and LinkedIn, they don’t use it as much as other industries would.

I know that my father’s elevator company does not use social media to promote their business (may be shortsighted), but they do not believe that their customer base uses these tools to find business. I also fought with this notion. However, I decided to use these tools, if for nothing else than helping our company with search engine optimization. You can link these sites to your company’s site and this will increase your credibility with Google and the like. Twitter is something that I just started and really need to learn more about. It only really helps you if you get a lot of followers (clients/potential clients). Otherwise, you are really talking to yourself and not making good use of your time.

Blogging is a great way to go as long as you stay on top of it. If you don’t consistently post a blog with good and pertinent content, it does you no good. It is a great tool to get your thoughts and ideas to others as well as increase search engine optimization. I believe that almost all businesses should use social media to advance their business, but most that don’t use them either don’t have the proper education about these tools, time to use them, or don’t believe it will increase business.”

Social Media is not a panacea… It is a tool!

“Just over 3.5 years ago I began implementing “Social Media Marketing” techniques within my own firm. I wanted to ensure that I could make it work for our needs before we jumped in and recommended these strategies for our clients.

There is a plethora of information from many sources that assisted us…too many to mention.

We worked it hard. From our work in Social Media Marketing, we began to acquire clients from around the world. We acquired start-ups and helped place their wares in STAPLES and H-E-B Grocery Company. White Mountain Marketing achieved international recognition, and developed our Social strategies to the point that a substantial portion of our business (90%) is generated from these strategies.

From these successes, we created the position that one can not have ‘a’ strategy for a company. We believe that many strategies within the curtain of “Social Marketing” to penetrate several levels of clientele makes the most sense. Companies need exposure at every level, in order to achieve maximum positioning.

Of course, “Social Media Marketing” is just one component of well-drafted marketing strategies. It is not a panacea. It is a tool – a very strong tool that can help turn companies around, when used properly.

Great questions, Paul. There is a lot to think about when creating and implementing any tactics and strategies in business and marketing plans. Don’t jump on any band wagon…walk around and make certain the wheels are on tight and the horses are strong. Always test the water.”

Please share your thoughts, comments and questions below…

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How responsible are franchisees for their own success (or failure)?

LinkedIn logoI recently posted a question on Linkedin, “How responsible are franchisees for their own success (or failure)?”. The discussion was based upon an article posted on this site, “Get Off Your Ass for Business Success.”

Below please find several of the responses from a cross-section of non-industry professionals that I believe provides an interesting perspective. Certainly ones that may be different from franchise professionals that may be too far into the forest to actually see the trees, or of the franchisees that would rather point the finger of blame at someone else rather than at themselves. As I have done in the past, the names of the responding individuals will be kept confidential. Instead, they will only be identified by their Linkedin statement or profile.

The president of an HR consulting firm responded, “Franchising quickens the start-up of a new business operation with a systemized model. But in the end, a franchise is a business like any other. Each business owner is responsible for the success of their business. Drive, ambition, courage, determination and a keen focus on sales and marketing is critical. You reap what you sow.”

An operations manager from the telecommunications industry added, “I have the fortune of working with some great franchises in a manner where both the franchisees and the franchise are clients. As others have said, it is a combination of what is provided by the franchise and effort on the side of the franchisee. One could write a series of books on the subject, however I feel that proper guidance and training are more vital than even advertising when it comes to a good ratio of successful franchisees. Often I will see even the highest revenue producing franchisee left alienated by a brand, it is not uncommon for some franchisees to not even know who the current regional contact is for their brand until their is a problem. On the other hand I have seen franchises that provide complete packages for their franchisees including market research, technology like database, PBX, and websites, corporate trainers that are easy to contact and on a first name basis, and most importantly a feeling of partnership where the owner often makes contact for advice, ideas, and information. The right franchise provides two vital resources to a business owner: 1. Instant name recognition and consumer confidence. 2. Tools enough for a business owner to focus on growing his business and not burdened with reinventing solutions to common problems.”

Finally, an expert in the HR field stated, “They are totally responsible for their own success or failure. If the franchiser does not support them they have to remember they are the ones who made the decision to buy the franchise. They decided who to hire and to approve the location. If the system is not working then figure out what needs to happen and make it happen. When you buy a franchise you do not buy a job you buy a business. Would you let your employees blame it on you if they did not produce.”

Well, let’s not end the discussion here as I’m anxious to hear what franchise professionals and franchisees have to say. Please post your comments below. Thanks.