The High Cost of Not Following Up Promptly With Franchise Prospects

By: Michael Alston for Franchise Insights

February 22, 2023 – Kudos to the franchise sales teams who reached out to all of the inquirers who requested information from them in February 2023. There is no doubt that they will be finding new franchisees, unlike those teams that did not follow up with an initial contact within seven days. 

According to this month’s FranchiseInsights.com monthly “Mystery Shopping” survey, only 41.4% of inquirers to franchises reported that they were contacted by “all of the franchises they inquired to” within seven days of the requests, far below  the average rate of 57.3% seen over the prior twelve months. This was the third consecutive month of a declining trend, and an all-time record low for this measure.

That means that despite opportunities lost to competitors – and the cost to acquire the leads – some franchise development teams walked away from potential sales.

Those who reported being contacted by “none of” the franchises at seven days after inquiry stood at 26.3%, far above the all-time low of 2.8% in March 2022. While that was not the worst on record – 27.3% of inquiries went unanswered in June 2020, as the pandemic surged and many businesses were forced to shut down – it does mean that  approximately a third of lead generation budgets were wasted by some franchise sales teams, assuming that the survey respondents are representative of the total population of prospects. With 26.3% of respondents being contacted by none, and 18.2% contacted by less than half, we approximate the lost opportunity to be about a third of leads unanswered.

What could be driving this lost opportunity?

Underscoring the importance of increasing contact efforts is the data that almost half of prospective buyers submitted an inquiry to only a single business concept and almost two thirds made inquiries to only one or two concepts. So franchise sales teams with prompt follow-up can increase their chances of exclusive contact.

Over the last three years, contact attempt rates had dropped as low as 45.5% in June 2020 as pandemic restrictions were enforced, the same month that a record 27.3% of those surveyed reported that none of the franchises that they requested information from followed up within seven days. That downtrend reversed as vaccines  approached in late 2020. Contact attempt rates reached record highs at 75.4% in August 2021 as seen in the chart below.

How could this opportunity gap persist? Why aren’t all prospects contacted promptly? Rather than blaming it all on insufficient effort or inadequate responsiveness of franchise sales teams, here are a few hypotheses:

• Inquiries received outside normal business hours or on weekends are more than two thirds of all inquiries, making the lag time a likely factor. Sending prompt or automated email and/or text follow-up as a precursor to a voice call is always a best practice, based on consistent respondent feedback from these surveys.
• Apple’s “silence unknown callers” feature introduced in 2019 likely hinders many initial voice conversations before the caller is in the prospect’s phone contacts. This again underscores the importance of emailing or texting before calling. In fact, according to Apple, calls will not be silenced from “people that are saved in your contacts list, recent calls list, and from Siri Suggestions to let you know who’s calling based on phone numbers included in your emails or text messages.” 

A best practice is to include wording in your initial contact email to the effect that: “Caller ID will not indicate that it’s me calling from [name of franchise], so we suggest adding our number [your number in format XXX-XXX-XXXX] to your phone contacts”.

• The Mystery Shopping survey is directed to prospects no sooner than seven days after franchise inquiries are made, so any initial contact efforts made after a week are not counted.

But the number of persons inquiring who are never contacted by any of the franchises they selected for more information is a costly paradox, given the lifetime value of franchise leads, and the increasing costs and scarcity of franchise leads due to privacy changes at Apple and their impact on Facebook and Instagram. 

The Mystery Shopping survey is conducted monthly by FranchiseInsights.com from a sample of franchise prospects that have submitted inquiries on the FranchiseVentures lead generation platform. The latest data is from February 9-16, 2023.

FranchiseVentures is the leading franchise lead-generation platform for potential franchisees to thousands of growing franchise systems in the United States and Canada. Its franchise lead generation brands include Franchise.com, Franchise Solutions, Franchise Gator, Franchise Opportunities, Franchise For Sale, SmallBusinessStartup.com and BusinessBroker.net, and together they provide the largest aggregation of prospective franchise buyers in the U.S.

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Published on Wednesday, February 22nd, 2023.