Turn the microscope inward
Putting the mystery back into franchise sales
Many franchises will use mystery shoppers to judge the quality of franchisees. So why don't they do the same with sales staff?
Many in the industry, this author included, have written ad nauseam about the importance of measuring key performance benchmarks. Cost per lead. Cost per face-to-face meeting. Cost per close. Lead cost by media. Closing costs by media. Speed of close. Page views generated by portal. Web site "capture rates." The list goes on and on.
Measurement is the key to improvement. And when it comes to marketing, diagnosis is relatively simple. And treatment is relatively easy to prescribe.
But when it comes to franchise sales, it seems many franchisors simply throw proper diagnosis out the window. In some cases, this is because the person doing the measuring is also the salesperson being measured. In others, we simply befriend our development staff and - unless their performance is statistically atrocious - we are willing to believe whatever excuse they provide us for underperformance. After all, they are sales people.
But while all of these reasons may have some validity, none excuses the savvy franchisor from their responsibility of examining and diagnosing the issues underlying sales performance.
The problem is that beyond some of the easily quantifiable measures of performance (e.g., close rates, time to close, etc.), there are few ready measures and even less in the way of true comparative data for judging performance. And unlike media with inadequate lead production, it is not so simple to just pull the plug on a salesperson whose performance is acceptable but perhaps below average.
First there is the question of determining a target close rate. Every franchisor should establish such a target, but without substantial historical data, this number can be difficult to estimate. While cross-industry averages can provide a guidepost, they cannot account for many of the factors that will influence close rates - factors such as size of investment, credibility of the franchisor, availability of financing, profile of the prospective franchisee, and the relative "sizzle" of a particular industry segment.
And once a target is established, there comes the question of accountability. If a salesperson fails to achieve the target close rate, to what should you attribute that failure? Is it performance? The current economic climate? Changes in available financing? Changes in media effectiveness? Changes in the competitive environment? Or is the sales process not performing up to par?
When it comes to sales performance, the bottom line is that a strictly quantitative approach to analysis is not adequate to measure performance.
From a sales standpoint, the most effective franchisors know that a regular review of their sales processes from a qualitative standpoint is just as important as looking at the numbers. A formal sales audit should start by looking at the sales process. Who takes incoming leads? What is sent to these leads and when? When are the prospects contacted and by whom? Should you use a Discovery Day or a Decision Day? The process used will impact both execution and the sales metrics you use to judge performance.
Mark Siebert is the chief executive officer of the iFranchise Group (www.ifranchisegroup.com), a franchise consulting firm with consultants who have worked with 98 of the nation's top 200 franchisors.
Mark can be reached at 708-957-2300 or at firstname.lastname@example.org.
There are no absolute right and wrong answers. But there are readily observable best practices that should be followed. Are there too many steps in the sales process? Is follow-up timely and professional? Are prospects given a timetable and an overview of the evaluation process? Small mistakes in the process can result in lost sales - and if these mistakes are systemic, the franchisor can anticipate that it will lose sales year after year until the process is fixed. Equally frightening, with no one to tell you that these systemic mistakes are present, for many, it is likely that these suboptimal processes will be institutionalized within the franchise organization.
Beyond process, the franchisor needs to look at individual performance. But despite the importance of what is being said by these salespeople in the franchise sales process, far too many franchisors leave their salespeople to their own devices. When considering that the lifetime value of a single franchisee can be hundreds of thousands of dollars or more, the franchisor cannot afford to lose a single qualified prospect. Yet the most important aspect of the franchise sales process - the franchisor's direct interaction with their prospective franchisee - all too often goes unmonitored.
Ironically, many franchisors are well aware of how to best monitor this performance. Many franchisors use mystery shopping to ensure their franchisees are performing up to standards. Yet few turn the microscope inward and conduct this same detailed and objective analysis on themselves and their sales force.
The process starts with the development of several scripts and "points of entry" different callers will use when inquiring about your franchise. These "scripts" can only be loosely scripted, as only half of the conversation can be controlled by the mystery shopper - so it is good advice to hire a mystery shopper who understands the franchise sales process and is capable of assuming the role of a prospective franchisee.
Develop scripts and roles to measure the salesperson's performance. How quickly is an unqualified buyer qualified - and how are they handled once their qualifications are known? How are financial disclosure issues handled? How are competitors discussed? How are objections handled?
Once these roles and scripts are finalized, the mystery shoppers (you will likely need several for each salesperson) should enter the system as a new lead - to learn exactly how they are treated in the sales process. They should evaluate your sales staff on proper sales technique and assess overall diligence and follow-up. Ultimately, a good mystery shopping exercise should address:
Timeliness and professionalism of response
Early and accurate qualification
Establishment of a clear mutual evaluation process
Diligence in the follow-up process
Ability to communicate the value proposition
Ability to professionally differentiate against franchised competitors
Sales Skills (establishing rapport, defining goals, overcoming objections, etc.)
Compliance with franchise regulations
The best mystery shopping exercises, of course, are actually conducted "blind." Thus, the process of mystery shopping a sales force will often take place over several months - from initial inquiry to Discovery Day and beyond. But the results of such an exercise can be invaluable.
In addition to the desired improvement in close rates that is at the heart of most such exercises, mystery shopping a franchise sales force provides franchisors with an ability to control the quality and the content of their brand message. Moreover, a well-executed mystery-shopping program can also help limit a franchisor's liability in the sales process.
If, for example, a mystery shopping exercise uncovers impropriety in the disclosure process or promises that go beyond those that a salesperson is authorized to make, these issues can be identified and resolved before they become system-wide problems. Offending salespeople can be terminated or retrained, and problems can be addressed without the franchisor being blindsided at a later date. On the other hand, franchisors who receive a clean bill of health from an outside firm that conducted regular mystery shopping exercises can point to those reports as evidence of their standard practices - and of the importance they place on integrity.
It is never easy to turn the microscope inward. But given that expansion is the lifeblood for most franchise systems, evaluating the importance of the development team is essential. To lose sales as a result of a poor internal process or simply poor execution by the sales team is more costly than ever. Despite the challenges of examining the sales process, nowhere else in franchising can proper diagnosis and treatment so positively impact profitability.