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How Do YouStack Up on

Lead Generation & Franchise Sales?

Panel of SpeakersSteve 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

Jeff Sturgis – Vice President, Fantastic Sams• Oversees Franchise Sales, Real Estate, Store Development• Over 15 years in franchise development (FOCUS Brands, US Franchise Systems)

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 2009Franchise 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• 8,100 more franchise units (6,300 zees)

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$138,000Median

$282,000 $153,000 $165,000$175,000 $198,000Average

20052006200720082009

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

20052006200720082009

Top Sales Producers

Other 7%14%11%4%15%

Print 6%4%2%4%6%

Brokers 29%9%21%14%16%

Referrals 13%27%21%37%28%

Internet 45%46%45%41%35%

20042005200620072008

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

• 72% reported below goals

Franchisors that are Exceeding or Meeting Goals

• 39% food category

• 35% service category

• 13% retail food

• 13% retail non-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 Exceeding or Meeting Goals

Broker Networks • 50% use broker networks

• 85% have closed deals

• 8% median of applications result in sales

• Median of 8 sales

• $13,000 median broker commission

Measuring Costs

• 70% track their cost per lead

• $50 median cost per lead

• $80 average 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

Others3.9%Ask

2.0%

AOL4.6%

MSN11.9%

Yahoo!17.4%

Google60.2%

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 franchise opportunity page

Web Site Usability• 5 categories

• Franchise content accessibility• Site readability• Clear navigation• Effective use of technology• Overall site presence

• Ratings• Excellent, good, fair & poor

Key Content• 6 categories

• Company history• Benefits of franchising• Available locations / territories• Investment required• Frequently asked questions • Testimonials• Clearly defined process

• Rating• 5 (best), 4 - 3 (average), 2 - 1 (minimal)

Best in Class – Navigation Where We AreWhere We Are2 Levels of

Navigation2 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

• Multi-Brand – Yum! Brands

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• They are the same

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

• Presents next step 24% 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

• 44% never responded to the qualified lead by e-mail

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. • Use phone roll-overs, after-hours answering service.

Franchise Update’s AnnualFranchise Development Report• 148 franchisors representing 57,000 units

• 6,700 company-owned units• 39,700 franchise units• 10,800 international units

• Order information at franchiseupdate.com/afdr

How Do YouStack Up on

Lead Generation & Franchise Sales?