Best practices for marketing franchise opportunities 2014 [compatibility mode] by iFranchise Group

Best Practices For Marketing Franchise Opportunities

Agenda •

About us

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Overview of Franchise Marketing – – – –

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Paradigm for Franchise Marketing Tools for Franchise Marketing Working with Brokers Diagnosing Sales and Marketing Problems

A Digitally-Integrated Approach – – – – – – –

Website development Search Engine Optimization Social media Mobile Video Pay-per-click Public Relations

The i Franchise Group

Today’s Presentation •

Mark Siebert – CEO, the iFranchise Group – – – –

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27 consultants across four functional specialties 500+ years of experience in franchising 98 of top 200 franchisors 200+ articles and 30+ years of consulting experience

Matthew Jonas, President, TopFire Media – One of the nation‘s premier digital media companies – One of the few with a franchise specific focus – Both consumer and franchise lead generation practices

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Will provide copy of presentation upon request

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Lot of material to cover – so please hold your questions until the end

The i Franchise Group

Nation’s Leading Franchise Consulting Firm •

More hands-on experience than any other firm – –

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More “senior level” experience – –

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Former CEOs, CFOs, and EVPs of major franchise companies Start-up franchise programs and established franchisors

Breadth across five functional areas – – – –

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27 consultants with over 500 years of franchise experience 98 out of the top 200 franchise companies

Strategic planning Quality control Marketing Organizational development

Franchise experience throughout the world

The i Franchise Group

About TopFire Media

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A Premier fully-integrated digital media firm specializing in franchised businesses – – – – – – – –

Public Relations Social Media Publishing Search Engine Marketing Pay-Per-Click Advertising Website Development Search Engine Optimization Mobile Websites and Mobile Marketing Video Production

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Both franchise development and consumer branding

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More data = Better data – –

200,000+ leads tracked through affiliates in the last two years Can analyze by media, investment size, by industry, etc.

The i Franchise Group

Nation’s Largest Franchise Sales Outsourcing Firm •

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Top Sales Performers –

Top sales producers provide top results

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In five years has grown to 25 sales and marketing professionals and a total staff of about 50

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Our sales team has sold over 8,000 franchises during the course of their careers

Performance –

Sold 346 franchises in 2010 for about 15 clients

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Sold 500+ in 2011 and 2012 for about 20 clients

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“Equivalent” to sales generated by the top five fastest selling franchisors on Entrepreneur’s Franchise 500 list

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Recently included in Inc. 500/5000

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Over 400 additional years of franchise experience

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Real world data on sales and marketing

The i Franchise Group

A Fully Integrated Approach to Franchise Marketing & Sales

• • • • •

Primary Research Marketing Plans Brochures Videos Collateral

• • • • •

Websites Public Relations SEO Services Social Media Pay-Per-Click

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Media Placement Trade Shows Direct Contact Performance Monitoring • Reporting

Note: TopFire Media Does Consumer Marketing for Franchisees Too

The i Franchise Group

Franchisor Marketing Dollars by Media Percentage of Total Expenditures: 2009, 2011 & 2013 (est.)

Almost 70% of Franchise Lead Spend is Focused on Digital Media

Source: Franchise Update

The iFranchise Group

Source of Franchise Leads by Media Percentage of Total Leads Received: 2006, 2008. 2010 & 2012

And Over 80% Franchise Lead Generation Comes from Digital Media

Source: Franchise Update

The iFranchise Group

Breakdown of Expenditures on the Internet (2010, 2011, 2012)

For Most Franchisors This Is The Wrong Allocation

Source: Franchise Update

The iFranchise Group

Average Closing Costs (Media Dollars Per Sale)

$14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 2008

2009

2010

2100

2012

Source: Franchise Update

The iFranchise Group

The Franchise Sales Pipeline Public Relations CPL = $250

Print Advertising CPL = $150

Trade Shows CPL = $100

Direct Mail CPL = $75

Internet Leads CPL = $25 - $75

Brokers Cost Per Sale = $10K - $20K

Referrals/ Unsolicited CPL = $0

Lead Generation Time Varies by Media

Avg. CPL: $72.23 Median CPL: $50

Send Marketing Materials, Prequalify, Schedule Meetings

Meet With 3 â&#x20AC;&#x201C; 10% of Leads

Initial Meetings with Candidates Further Qualify

Convert 13.5% of Applications to Sales

Follow-up meetings, assist with business plan & secure financing

Close 65-75% of Personal Meetings Source: Franchise Update, iFranchise Group 2014.

Award Franchise

Average 45 â&#x20AC;&#x201C; 90 Days Lead to Meeting Time to close can range from 30-90 days or more following the initial face-to-face meeting

Median Cost = $7,000 per sale Average Cost = $9,451 per sale Overall Close Rate = 2% Typical Close Time = 12 -20 weeks

Marketing Planning and Tools

The i Franchise Group

Marketing Planning

A Requisite for Rapid Growth

• Start locally, then regionally – – – – –

Cluster support More effective franchise advertising Consumer advertising economies Brand building Buying economies

• Don’t expand faster than your support capability – Quality control is key – Nothing sells franchises as well as happy and successful franchisees – Three hour drive time

The i Franchise Group

Marketing Effectiveness Different franchises requires us to target different types of franchisees – affecting the media and message used for effective marketing.

 Identify your prospect as narrowly as possible  Survey Competitors  Background  Hot Buttons  Media  Survey Franchisees  Are we selecting the right lead generation strategies?  Is the advertising message appropriate for our targeted franchisee profile?  Are we targeting the right prospects and using the right media based on our development strategy?

Must have integrated marketing strategy • • • • • •

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Referrals are best, but finite PR is great for credibility and is now a digital tool Print costs are escalating rapidly; can supplement the web Trade shows vary in effectiveness Direct contact/Direct mail works only when highly targeted Internet will generate the most leads but with lowest close rates – Many flavors: SEO, PPC, Portals, Social, PR, Video, Mobile – Many prospects will use Internet exclusively – Need to “wade through” these leads Mix/budget vary based on – Targeted franchisee – Cost/the franchise opportunity – Aggressiveness of goals Copyright, The iFranchise Group, 2014 All rights reserved

The i Franchise Group

Marketing Materials Essential for Speed • • •

Franchise marketing is very different from consumer marketing Franchise marketing is highly regulated Tools: – Your web page should be your first concern – Develop a mini-brochure for the sake of economy – A full-sized brochure is essential for credibility – Video – the New Brochure

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Be sure to have your attorney and registration states review all materials

The i Franchise Group

How Brokers Work May Represent 100 – 200 Franchisors

Local Leads

• • • • •

• • • • • • • • • • • • • • • • •

Franchisor 1 Franchisor 2 Franchisor 3 Franchisor 4 Franchisor 5 Franchisor 6 Franchisor 7 Franchisor 8 Franchisor 9 Franchisor 10 Franchisor 11 Franchisor 12 Franchisor 13 Franchisor 14 … … …

The i Franchise Group

Are Brokers Right For You? • Increasingly more important in the franchise development process – Level of professionalism and scrutiny has increased and driven out weaker, less legitimate players – In 2000, 11% of new units came through Brokers, now it is 30%+ – 60% of all Franchisors use Brokers as part of their overall franchise development strategy – 93% have made at least 1 placement with a Broker network

Source: Franchise Update, iFranchise Group 2013.

The i Franchise Group

The Broker Model • Mostly a pay-for-performance – – – – – –

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Some charge a monthly retainer $2-$5K Commissions average ~$13K per Commissions on additional sales Multi-unit, ADA, Area Rep more Some system entrance fees - $20k Some advertising requirements

The i Franchise Group

Franchise Sales Outsourcing (FSO’s) vs. Brokers • Brokers = Leads – – – –

Do their own marketing Represent multiple brands at one time Do not “close” the franchise sale Do not care who buys

• FSOs = Sales – – – – – –

FSO’s replace the internal sales staff of a franchisor The franchisor still needs to generate leads Most FSO’s work with Franchise Brokers Exclusive – no lead sharing Monthly service fees & commission Many FSO’s will demand a share of ongoing royalty from the units they sell – Franchisors should never do this!

The i Franchise Group

Major Steps in Average Franchise Sales Timeline – Franchisor or FSO

Lead Received

Advertising

Franchisor Qualifies

CIRF Received

FDD Sent

FDD Review Call

Discovery Day

Contract Signed

Financing

Month 1

Month 2

Month 3

Pre‐Qualify

Various Sales Process Advances

Month 4 Close

Major Steps in Average Brokered Franchise Sale If broker leads add to your existing leads, they are a great way to supplement your franchise marketing efforts. But if Your salesperson (or your FSO) still needs to go through the exact same steps, but with a pre‐qualified prospect who is they do not bring truly incremental franchise leads, they are more expensive and will introduce additional competitors to almost certainly interviewing other franchisors. The net result is that your timetable will shrink and your close rate will Advertising has a different message and is done by the broker. “Let me help you choose…” Brokers may represent hundreds of franchisors. No matter which the prospect chooses, the broker gets paid. The broker professes to be an impartial consultant. Role is to help prospects narrow the field. the process. They do NOT do franchise sales. And they should never be your only source of leads. increase. The prospect’s timetable is probably longer. You generally pay broker fees only on the completion of the sale. Lead Received

Advertising

Broker Qualifies

3 ‐ 6 Franchises Presented

Broker Activity Screening for “Most Appropriate” Fit

Re‐Qualify

CIRF Received

Month 2

FDD Sent

FDD Review Call

Discovery Day

Financing

Month 3

Contract Signed

Month 4

Franchisor or FSO Remains Responsible for all of These Steps Other franchisors are going through the same process with your prospect

Assessment and Refinement

The i Franchise Group

Diagnosing Sales Problems

Publicity

Brokers

Trade Shows

Direct Mail

Internet

High Lead lead costs Could Indicate could indicate Concept Problems media selection problems Low conversions could indicate Face-to-Face/Discovery Day In short, closeCould analysis of indicate Poorvarious marketing materials marketing, media-specific, Sales problems and sales statistics, -Urgency can beconversions indicative of where Low Few leads -Setting Agenda problems may could indicate Closeexist, allowing could indicate -Closing Skills for appropriate corrective action. poor sales skills or lack of broker poor validation confidence

Referral

12 weeks

Marketing and Sales Audit Process Sales Factor

Franchise Concept Itself

Potential Problems • • • • • •

High unit investment Financial performance Look and feel Franchise structure Value proposition Franchisee validation

Symptoms

Diagnosis

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Bad/No P.R. Low unsolicited inquiries Losing sales to competitors Repeat objections not overcome Prospects go dark after validation

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Evaluate design/construction model Comparative financial analysis Evaluate unit economics/ops Contract comparison Marketing comparison Phone interviews of franchisees Franchisee satisfaction surveys (web) Evaluate real estate portfolio Survey “lost” sales

Historical vs. norms Media specific analysis Performance vs. competitors Message vs. competitors Franchisee or competitor surveys

Franchise Lead Generation

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Media Selection Media Mix Message Ad Spend Target Audience Timing

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High lead costs Low close rates Message confusion Few qualified prospects Low quality lead sources predominate

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Franchise Marketing Materials

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Target Audience Materials Used Message Inadequate differentiation Design Quality Production Quality

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Bad/No P.R. Low unsolicited inquiries Losing sales to competitors Repeat objections not overcome Lose sales to market leader Low application rate

• Review for best practices • Message based on surveys • Application rate vs. norms

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Lead handling Follow up Effective Process Sales Skills Salesperson Motivation Sales Tools Staffing v. Goals

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Low application rate Low discovery day rate Low close rate Long “time to close” Variances in salesperson close rates Un- or under-worked leads Few broker leads

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Sales Process & Technique

Historical vs. norms (close, speed, etc.) Salesperson vs. salesperson Historical vs. past performance Develop sales process map Mystery shop sales force Leads per salesman Sales per salesman Broker validation calls

Problem Resolution – Phase Two Sales Factor

Franchise Concept Itself

Confirmed Problem • • • • • • •

Unit investment Financial performance Look and feel Franchise structure Value proposition Franchisee validation Real estate model

Potential Solutions • • • • • • • •

Value engineer design and construction process Suspend sales and work on business model, support, franchisee training Retain design firm, consumer marketing firm, or PR firm as appropriate Revise franchise business structure Provide incremental value or reposition concept Communications plan, FAC, address survey-specific concerns Improve real estate process Develop third-party financing programs

Franchise Lead Generation

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Media Selection Media Mix Message Ad Spend Target Audience Timing

• • • • • •

Develop formal marketing plan based on survey results Alter marketing mix to focus on higher-quality lead sources Alter message based on survey results Increase advertising expenditure based on goals Optimize website and PPC campaigns Develop and measure benchmarks; rotate bottom 10% quarterly

Franchise Marketing Materials

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Target Audience Materials Used Message Inadequate differentiation Design Quality Production Quality

• • • • •

Rewrite, redesign, and reprint materials as appropriate Develop or revise standard sales correspondence Rewrite and redesign web pages as appropriate Add technology improvements (auto-responders, sales software, etc.) Develop additional promotional tools (video, etc.)

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Lead handling Follow up Effective Process Sales Skills Salesperson motivation Sales Tools Staffing v. Goals

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Develop and map effective sales process Train sales staff and provide guidelines to non-sales staff Replace poor sales personnel Benchmark and measure performance Alter compensation Evaluate external resource opportunities (FSO, LQS, software solutions) Add sales professionals, support staff, or both Proactive broker programs

Sales Process & Technique

The i Franchise Group

The Problem With Marketing Professionals • Everyone believes they have the solution to lead generation • • • • • •

PR practitioners – credibility Ad agencies – predictability Social media firms – engagement Search engine optimizers – visibility Mobile web designers – an untapped market Video houses – compelling storytelling

• Messaging not coordinated across media professionals • When your only tool is a hammer, then every problem is a nail

The Reality • Most franchise companies do not have an unlimited budget • Their circumstances will be very different • • • • • • •

Goals Budgetary restrictions Geographic focus Profile of your franchisee and your customer Quality of existing websites and materials In-house resources and their capabilities Competitors

• Need to allocate resources based on a strategy • A canned approach will not work

Using a Webcentric Approach

Your Message Is No Longer Centered On Print Media Focus Should Integrate All Media Around The Website

Your Website Needs a Plan! • A focus on visual appeal alone can be a disaster • Too many websites • Provide non-optimized content • Provide too much content • Flash over substance

• Develop a plan • • • • •

Plan must do more than increase unique visitors Create effective calls-to-action Increase the length visitors stay on your site You need to design websites that converts traffic Improve franchise lead capture rates

Search Engine Optimization Your First step to franchise lead generation • The greatest site will not convert traffic if it is not found • 75% of users never scroll past the first page of search results • There are 17,000,000 Google results for the word “franchise”

• Google accounts for 70% of web searchs • Google’s algorithm a closely held secret • The algorithm changes up to 500 times a year • Google’s goal: deliver content that is relevant to the searcher

• Ranking factors fall into four basic categories • • • •

On-Page coding On-Page content Inbound Links Social Media

Search Engine Ranking Factors - Coding • Strong positive SEO correlations • • • • • • • • • •

URL length Position of keywords in title Existence of description Existence of H2 title tags Existence of H1 title tags Meta description tags Page title tags Image alt tags Keywords in description Overall speed of site

• No longer relevant • Keyword domains significantly less important • Keyword density declining in importance

Search Engine Ranking Factors - Content • Strong positive SEO correlations • • • • • •

Internal links Number of words Number of keywords in body Presence of keywords in external links Presence of keywords in internal links Number of images and videos

• Negative correlations • Keywords in H1 • Advertising (even AdSense)

Search Engine Ranking Factors – Inbound Links • Inbound Links = Links from other site • Strong positive SEO correlations • • • •

Absolute number of backlinks SEO strength of backlink URL Length of anchor text Percentage of backlinks containing keywords

• Searchmetrics study • 1st returned result = 13,358 backlinks • 2nd returned result = 3,693 backlinks • 30th returned result (bottom of page 3) = 103 backlinks

• If you do not know (and work on) this number, you should • Proactively develop backlinks as part of your strategy 37

Search Engine Ranking Factors - Social • Social media has had a substantial increase in strong SEO correlation – It is now the top factor according to some research • Strong positive SEO correlations • • • •

Google + Facebook shares, post totals, comments, and likes Pinterest Tweets

• Local SEO • Google Places • Foursquare and other Geo-Targeted site • Review sites (Yelp, etc.)

SEO is a PROCESS Not a “one-and-done”

Assessment

Social Media

Develop Links

Coding

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Google Algorithm changes constantly

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It searches for “fresh” content

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It searches for “relevant” content

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Your competitors are optimizing while you do not – driving them to the top

Content

Social Media Publishing • Social Media is important in its own right – not just for SEO • Why it is so important • • • • • • •

27% of time spent online is on a social network Social media is now the #1 activity on the web Facebook alone has 1.52 billion monthly active users Twitter has over 500 million users Pinterest has over 70 million users Over 500 million blogging sites Your customers expect you to have social media

• Conversations • Average person sees 3,000 ads a day • Only 14% of people trust advertisements • But 78% trust the recommendations of others

Social Media

Word of Mouth – Powered by the Internet

• Focus on a specific audience • • • • • • • •

Define your audience Strategy development Visual branding Community development Create engaging content Develop a plan Develop guidelines Execute

• Listen and respond • • • • •

Hootsuite Social Mention Google Alerts Business Wire Wildfire

Social Media

Where to Focus Your Efforts

• Facebook • Over 1 billion users • Average user spends 55 minutes per day • Less effective for franchise lead generation

• Twitter • 500 million users • Average user spends 31 minutes a day

• LinkedIn • 238 million users – more influential and affluent professionals • Better for franchise lead generation

• YouTube • Second largest search engine • Video accounts for a significant portion of Google’s search results

• Other Social Sites can be even more important 42

Hub of Social Media and Key Component of SEO

Industry Publications

Mobile Website Development • Mobile devices and tablets now account for 26% • On some sites, Mobile searches are more than 50% • 25% of smartphone owners ages 23-47 say they can’t recall the last time their phone wasn’t next to them • 75% of Facebook’s active users access the social network via their phones • Design and content must be scaled back • Sites typically have abbreviated content • Must be optimized differently

Video Posting and Optimization • Video results are returned in 70% of searches • YouTube now second biggest search engine with more than 1 billion visitors per month • At a minimum, all companies need to have their own YouTube page if only for SEO purposes • Videos need to be optimized • Should be .mov or .mp4 • YouTube-native size of 320×240 (aka QVGA) • Title, video description, and video tags - are the core elements of optimized YouTube search

Pay-Per-Click Management • Why it is so important • • • •

Highly targeted marketing Google fields 1.2 trillion queries per year Top 3 sponsored links account for 41.1% of the clicks Poorly managed accounts drive up costs quickly

• Test-Refine-Test • • • • • • •

Keyword research (including negative keywords) Campaign development, budgeting, and bids Ad design and testing Build custom landing pages Ongoing PPC monitoring and management Google display retargeting advertising Google display advertising

The Pay-Per-Click Advertising Conundrum $

A company with a large PPC budget can still get out-positioned by smaller competitors with lower budgets. Competitorâ&#x20AC;&#x2122;s Budget = $300

Bid of $10.00 per click at 50 clicks per day = $500 per day Budget = $500

Bid of $15.00 per click at 20 clicks per day = $300 per day

And if there were only 30 clicks to be had that day, you might just be out of luck.

Day 47

The Pay-Per-Click Advertising Conundrum $

You Can Increase Your Click Bid to $20 Competitorâ&#x20AC;&#x2122;s Budget = $300

Bid of $15.00 per click at 20 clicks per day = $300 per day

When you run out of ad dollars at the end of the day

But if you do, you need to increase your budget to $1,000 per day or Anticipate that you will get only half as many clicks Allowing the competitor with the lowest budget to gain top positioning for half a day at 1/5 the cost

Budget = $100 48

Day

Integrating Public Relations • Public Relations as a next step • • • •

Credibility Franchise sales leads Develop public image of your brand Obtain local recognition at the consumer level

• By creating inbound links, PR also helps with SEO efforts • A step by step approach • • • • • •

Develop press kit Create messaging Target new media Target print publications Media outreach Assist franchisees with local PR and grand openings

An Integrated ROI-Focused Approach GOALS Initial Evaluation, Research, USP, & Strategy Creation

Website Design Must Capture Leads and Have Call to Action

Website optimized around keywords & inbound links

Creation of Blog to Push Content to Social Media Channels

Prioritize & Optimize Appropriate Social Media Channels

Messaging – Press Releases, Stories, Blog Posts, Ads

Publishing – Post Content, Deliver Releases, Ads

Outreach & Engagement – Writers, Editors, Bloggers, and Social

Tracking and Refinement of Various Campaigns

Enhancement – Mobile Web, Video Posting, Retargeting

ROI Analysis of What Is Delivering Best Results

Reallocation of Resources Based on Results, Trends, Seasonality, Competitors

The Approach Must Be Customized GOALS Initial Evaluation, Research, USP, & Strategy Creation

Website Design Must Capture Leads and Have Call to Action

Website optimized around keywords & inbound links

Creation of Blog to Push Content to Social Media Channels

Prioritize & Optimize Appropriate Social Media Channels

Messaging – Press Releases, Stories, Blog Posts, Ads

Publishing – Post Content, Deliver Releases, Ads

Outreach & Engagement – Writers, Editors, Bloggers, and Social

Tracking and Refinement of Various Campaigns

Enhancement – Mobile Web, Video Posting, Retargeting

ROI Analysis of What Is Delivering Best Results

Reallocation of Resources Based on Results, Trends, Seasonality, Competitors

One-And-Done Does Not Work GOALS Initial Evaluation, Research, USP, & Strategy Creation

Website Design Must Capture Leads and Have Call to Action

Website optimized around keywords & inbound links

Creation of Blog to Push Content to Social Media Channels

Prioritize & Optimize Appropriate Social Media Channels

Messaging – Press Releases, Stories, Blog Posts, Ads

Publishing – Post Content, Deliver Releases, Ads

Outreach & Engagement – Writers, Editors, Bloggers, and Social

Tracking and Refinement of Various Campaigns

Enhancement – Mobile Web, Video Posting, Retargeting

ROI Analysis of What Is Delivering Best Results

Reallocation of Resources Based on Results, Trends, Seasonality, Competitors

The First Step • Online Media assessment to let you know where you stand • • • • •

Website Search Engine Optimization Social Media Pay Per Click Public Relations (if any)

• Prioritize your efforts based on results and budget

If you would like a copy of this presentation or a complimentary assessment, please provide us with your business card.

Questions