Franchisors Need to Sell More Franchises

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The quality of franchise sales has decreased over the last twenty years. And I know some of the reasons why & what can be done to reverse the trend.

No Franchise Sales Coaching

First, we have to remember that there is no specialized franchise sales training or coaching available to many franchisors. Everyone agrees that coaching the sales staff is of paramount importance.

In contrast to Amazon, Microsoft, IBM and Xerox, there is no sales as process, no question based selling or no consultative selling training offered to franchisors.

Despite having to sell a complex product with very large price tags, franchise sales is often treated like a consumer sale. "Here is our franchise agreement, one price fits all. Buy my stuff." Doesn't work well.

Technology Doesn't Sell; Franchise Salesmen Sell.

Second, there has also been an unfavorable growth in technologies - first CRMs and now web portals. The aim is to displace the salesman. CRMs and web portals are sold with the promise of making the machine or website eliminate the need for the consultative based sales force.

But, the end product is not a commodity and we cannot reduce the sales process to a mere transaction.

But, Many Franchisors have forgotten How to Sell Franchises.

Finally, many sales departments have forgotten their ability to sell.

Let me tell you about a little test I did, some years ago.

I gathered our top 50 franchisees in terms of gross revenue. I also found their initial applications. I then redacted their names from the applications, but nothing else. (Back then, we weren't collecting a lot of personal information.) I distributed the applications of what would be our top 50 performers to our sales staff.

How many of those top 50 performers would our sales staff identify and process acting only on the very incomplete application?

Zero!

We would have missed all 50 - because we were now more focussed on the demands of the CRM rather than selling. We now demand too much information before we begin the sales process - and most of the information is not needed. What is needed isn't asked for.

We have forgotten how to sell. We aren't mentoring our younger sales forces, the way I was mentored.

So, take a look at your online application. Ask whether you really need the candidate to fill out all the information just in order to start your sales process -- you will find that it is easier to start selling with some information & get the application filled out later on in the sales process. Here is to a better sales process & more sales for you.

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3 Comments

You raise some good points but I don't completely agree with all of your statements. I think many Franchisors have done a very good of providing training for their franchise sales staffs and in fact, a sales process has been developed and is in place. Sometimes that process however, can be a direct contributor to other bigger problems. More on that later.

There are some good firms out there that provide formal franchise sales training programs. Elements of these programs are many times incorporated into a companies existing franchise sales training process, resulting in an improved program. And in many cases, it improves what was already a pretty solid process. A pretty solid or even outstanding process that has been put together by an existing and/or prior management team of bright, proven and experienced Franchise Professionals.

Your exercise with the Top 50 franchisees was outstanding. And brings to light dramatically what can be the downside of a rigid, controlling and metric-obsessed process. The so-called logic of that type of approach produces impressive numbers in licenses sold and done so in a very cost efficient matter. But are the people who are willing to go thru these type of companies' hoops and submit to the control of the "process" prove to be the kind of people who will become a "Top 50" type performer?

The quality versus quantity conundrum.

David, your piece is "right on".

I have been involved in franchise sales and marketing for 3 decades and am continually amazed just how bad our industry's franchise sales component has become.

And, as you say, it all starts with training, of which there is very little these days.

Many companies have turned over their sales process to untrained broker networks who simply do not understand the psychology of the franchise awarding process.

Few people "grow up" in franchise sales; hence, they treat the franchise sale process like they would for selling widgets or services, neither of which works very well.

And, your comment about relying WAY too much on electronic sales processes is also very true. Nobody buys a franchise from a computerized CRM program, but somehow this fact seems to elude franchisors. I think they simply do not know what to do, so they rely on technology.

One of my favorite sayings is "Don't let the technology get ahead of the psychology", which it has in many companies.

I don't really have an answer to this situation, but I wanted to let you know how "right on" you are. It actually is a bit scary.

Franchisors spend a lot of money on CRM programs that they think will bring order & continuity to their franchising process.

Here's what they think will happen -

1. We won't have to sell anymore because people will sell themselves on the franchise.

2. We can hire cheaper salespeople and they'll be easy to fire and replace because the machine does the work anyway.

3. The machine will magically improve our process.

4. People will actually use it and buy.

5. Franchise salespeople will follow it and take the franchise order.

Because of a sunk cost fallacy franchisors will keep it even if it isn't used or is proven not to work. And they can't admit that machines can't sell franchises.

So what a smart and brave new VP of Franchise Sales who finds at their new company with a super duper CRM in place should do is.

Turn off the machine if they want to successfully sell more franchises.

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This page contains a single entry by David Gould published on March 2, 2015 10:27 AM.

The Lazy Man's Way to Find New Leads was the previous entry in this blog.

Franchise Fees that are Too Low & 2 Other Mistakes that Almost All Bad Franchisors Make is the next entry in this blog.

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