By definition, an emotionally charged buyer is someone who makes a buying decision based on feeling rather than rationale and reality.  This creates fertile ground for a misalignment of expectations; the consequences of which are typically dire in franchising.  But why is franchising different?

Well, in scenarios where you may be selling goods and/or services and the buyer and seller are independent of each other once the transaction is complete the consequences are not as severe.

As an example, if I visit a car dealership and see a shiny, new, red, foreign sports car I might envision myself sitting behind the wheel, driving around, and being the center of attention.  It smells new, it looks new, and it handles great.  I could easily romanticize about all the joy this car will bring me, and it’s this type of emotion that will be easily picked up on and played by the car salesman.  Despite the high cost of ownership including the premium gas, insurance, expensive maintenance, not to mention the price tag – I can probably talk myself into buying it.  However, in a few weeks the newness will wear off and I’ll find that nobody was as impressed with it as I thought they would be.  I didn’t achieve all of the joy that I had envisioned that day while standing on the lot and now the reality of the gas, insurance, maintenance, and first loan payment has sunk in.  I still like my car but I can see that my expectations were not realistic due to my emotions.  I rushed the decision a bit, but perhaps I’ll sell it or just leave it in the garage.

The good news for the car dealer is that they aren’t relying on me to drive the car every day or to maintain it.  What I decide to do with the car after the sale is made has no impact on the dealer’s business.  A car dealer wants you to be an emotional buyer.  They want you to create an emotional bond with the car, fall in love with it, romanticize about how great it will be to have it.  Because a rational approach would require studying the total cost of ownership and being realistic about what you’re really getting and therefore you might not buy it.

In a franchising business model the seller (franchisor) is dependent on the buyer (franchisee) after the transaction.  This dependency creates a completely different relationship dynamic than a typical B2B or B2C transaction.  A franchisee who wants to sell their business soon after opening, or one who quickly becomes overwhelmed with the realities of operating a business and underwhelmed with the fruits of owning it is not an optimal situation.  If too many of these misaligned relationships occur during the growth phase of a franchisor’s life cycle the cost of unwinding them, in both financial and human resources, could easily drain the franchisor thus pulling the focus away from new opportunities and setting the sights on extinguishing fires.
The bottom line is that if your franchise sales process is primarily designed to create an emotional engagement with the candidate (especially those who have never owned/operated a business), without doing a thorough job of ensuring that expectations are aligned, then you are most likely setting the stage for long-term failure.  You will win the battle of selling franchises but lose the war of building a sustainable, healthy, franchise system.

Investing the time to create a sales process built around understanding your prospective franchisee’s expectations and criteria, instead of trying to create an emotionally charged buyer, is a step in the right direction toward longer-term success.

As always, I look forward to your feedback and comments.

1. Lack of consistent business processes in all areas including franchise sales, pre-opening, operations, and franchise administration.
2. Lack of IT infrastructure that enables the organization to manage their business processes.
3. Lack of analytics/reporting tools that enable management to benefit from business intelligence, or monitor and improve the business.

This is an excerpt from a typical conversation…

Us: “Can you briefly walk us through your franchise sales process.”

Franchise Exec: “Sure, we receive our leads through various portals or from our corporate website. The leads are emailed to a sales person (or our sales team) then entered into a spreadsheet.”

Us: “Ok, then what?”

Franchise Exec: “Then the salesperson follows up with the lead to see if they’re qualified and if so we send them an application to be completed.”

Us: “I see. What happens next?”

Franchise Exec: “If the application is returned, we review it to see if the prospect meets our initial requirements. If so, we send them a copy of the FDD, then we’ll invite them to our corporate office for a Discovery Day.”

Us: “What happens after the corporate office visit?”

Franchise Exec: “Well, we just follow up and answer any further questions; discuss the FDD; possibly refer a financing contact. You know, work on getting the agreement signed.”

Us: “Sounds easy enough. So, what’s the problem?”

This is where the conversation usually gets interesting and I say that for this reason – most folks begin to identify their symptoms, not their problems.

“We need to generate more leads.” Symptom.

“We are not meeting our goal for number of franchises awarded.” Symptom.

“We are not able to award franchises in the markets that we want.” Symptom.

“I don’t know what my sales team is doing on a daily basis.” Getting warmer, but still a Symptom.

Now, we could list symptoms for days. But the truth is that until the underlying problem is identified it cannot be solved. I would encourage you to begin working to identify the problems that are the root causes of your symptoms. Try starting with the problem breakdown that I listed above to see if this fits your organization.

As always, I would welcome your feedback.

Sophisticated franchise companies will have multiple lead generation campaigns in place, at all times, and in various mediums.  The ability to integrate every lead, regardless of entry point, into your pipeline in real-time and rapidly route, contact, qualify, and follow up with these prospective customers (franchisees) would have at one time put you head and shoulders above your competition.  Today, it’s a fundamental process that every organization needs to achieve long-term success.  And it’s not enough to have a structured sales process in place.  There should be quantifiable objectives and goals built into the process, along with the ability to track analytics at each step, so that a process of continuous improvement and a true reality can be seen in order to make the best decisions.  The picture below is a good illustration of various entry points and a lead capture methodology.

I hope that this video will be helpful in learning a bit more about the way that we have worked with others to develop effective lead flow management processes and tools.

John Patterson who founded National Cash Register was the originator of the professional selling movement. He invented most of today’s “standard sales operating procedure”: territories, quotas, prospecting scripts etc. He was an amazing man. He was the “Thomas Edison of the sales profession”. Interestingly, John Patterson hired a fellow called Tom Watson at NCR and trained him in all his sales techniques. Tom Watson left NCR after several years and set up his own company…IBM. IBM has long been considered the “gold standard” for professional sales organizations. So the story of just these two men is a history of the professional sales profession in a nutshell. John Patterson invents professional selling and Tom Watson perfects it.

The innovations that Watson and Patterson initiated, however, took place in the 1890’s. This was when the last big shift occurred in the way a professional sold – a Sales “1.0” methodology. Since that time a lot has changed and so has the opportunity to adopt a more effective Enterprise 2.0 approach. Why should a franchise organization reconsider its “awards” or sales methodology based on 2.0 thinking ?

In the recent past franchise prospects moved into the “Internet world”. The tipping point was Google. With Google you had a search engine that really worked for prospects. People were given a tool that they could use to find almost any information they needed. This helped them research and make early decisions on which franchise to pursue.

Prospects no longer needed sales people to give them basic information. Therefore, franchise development professionals lost an “excuse” for engaging a prospect. Prospects can find whatever detailed information they need early in the process simply by typing into Google and pulling up dozens of whitepapers, webinars, FDD’s and a plethora of alternative opportunities. The power is in their hands.

Now prospects not only use Google , they are increasingly using social networks. Development professionals are therefore dealing with more well­ informed buyers with numerous ways of learning and researching what THEY want to know and this is making the old methods of franchise development obsolete.

The path to a “new way of franchise development” is also being driven by the Internet. Tools have recently appeared (and more continue to appear) that are giving people a way to fight back against this wave of prospect behavior in engaging with franchise development professionals. These Internet­ based tools really help development professionals build optimal franchise relationships that result in new successful franchises. They are not CRM systems set up as management reporting systems. They are tools that make a developers job easier and more efficient. Using these tools to improve your award process is what Enterprise 2.0 and Franchise Flywheel is all about.

Contact us today to learn more about how professional franchise organizations are adopting Franchise Flywheel to implement Enterprise 2.0 development solutions that increase ROI for your development process. Its time to reevaluate your approach by working with a solution that embraces these new trends.