Buying a franchise involves an intense decision making process, so it’s important for franchisors to understand the journey of prospective franchisees, says Sally Butters, director of media at Coconut Creatives
On average, it takes between three and six months for an individual to reach the decision to buy into a specific franchise.
It is a long process and prospective franchisees will not base this decision on having read one magazine article, visited a single exhibition or clicked through to a particular website. They embark on a journey that will probably involve a combination of all of these.
Therefore, it is important to understand the journey a prospective franchisee is likely to take in order to provide the right communication at the right time. This will ensure your franchise stays ahead of the competition by dramatically increasing the number of leads and converting them successfully.
How do you identify what is involved in the decision making process? It can be useful to regard franchisees as consumers who are looking to buy a product - in this case your franchise. The consumer decision making process can be defined, according to the Business Dictionary, as the process by which consumers:
* Identify their needs.
* Collect information.
* Evaluate alternatives.
* Make the purchase decision.
Each of these aspects of the decision making process is influenced by psychological, economic and environmental factors such as culture, group and social values, and how the individual feels at the time. Therefore, they will be different depending on the target audience. In order to understand which factors affect your target audience, we recommend you carry out research among your existing franchisees. This will allow you to identify what influenced them during their decision making process and apply this knowledge to communicating with prospects.
Moreover, the consumer decision making processes can be rated on a low to high scale, which usually depends on the amount of time and money the decision requires. It is also influenced by whether it is a decision that involves only them or input from other people. For example, on the low end of the scale are cheap items that are purchased often and won’t have a significant impact if chosen wrongly. They therefore do not require a huge amount of decision making. Shampoo is a great example, as it’s easy for manufacturers to get consumers to swap brands by having a ‘BOGOF’ offer in a supermarket. If consumers hate the shampoo, they can simply throw it away and buy another product to replace it.
Franchise purchases, however, are at the high end of the scale, as the individual generally commits to a minimum five year relationship with the franchisor, invests a significant amount of hard earned cash and will be adapting their lifestyle and family set up in order to make a go of it. Even though they might believe they have the confidence and skills to make a business succeed, they still have to take something of a leap of faith that what they have seen and been told by the franchisor will work for them.
This is not only their decision, but also involves the opinions and backing of their support network - usually their immediate family and friends. It’s a risk and pushes all their comfort barriers. These factors make buying a franchise an intense decision making process.
Due to the need for high involvement in the decision making process, prospects follow a complex research process containing different stages. To better illustrate this process, we’ve taken the low to high chart of decision making and overlaid it with the marketing distribution channels a typical prospect considers when looking at franchising. This also provides an insight into what information is required at each stage in the process as the need for information moves from generic to specific.
At the low end of the journey, the individual may look non-committally at business opportunities online and might not even have specifically considered franchising.After this initial research, they may start to become aware of franchising and add it into their mix of options to consider.
Once they have ruled out starting their own business and are set on the franchise route, they start to look at different types of franchises, levels of investment, locations, styles of franchise, size of franchises, earning potential, return on investment and so on. These activities indicate they have reached the medium involvement stage of the process, which is where they also discuss all their shortlisted opportunities with their family, who provide an opinion that refines their thinking and progress. At the high end, the research process is almost completed and the prospect is close to a final decision. This stage is often indicated by personal meetings with the franchisor and current franchisees.
This process is displayed in the diagram and based on data from over 60 different franchisor brands in different market sectors targeting slightly different types of consumers. By incorporating your franchisee research findings into this diagram, you can customise this to get an overview of the bespoke process of your prospects.
Having completed this, it is also essential to identify your top three communication tools for how you generate each lead, rather than just recording one source of enquiry, such as ‘direct web lead’ or ‘franchise exhibition lead’. In almost every case, the prospect will need to see your business in at least three places before considering your franchise as the right one for them.
There is a lot for a potential franchisee to consider and so the stage they are at in the process when you receive their initial enquiry will determine how long they take to make a decision to join your network, what type of questions they ask you and, indeed, if they decide to rule you out and move on.
Throughout this process the individual will be seeking counsel from their family and friends and taking on board other people’s opinions. Buying a franchise is a more emotional decision than taking a job as an employee, as the individual is investing a significant amount of money. They need to trust you to help them build their business, so building a rapport from day one is vital in helping them towards making their final decision. It is also important to set the ground rules of operating your franchise at the outset, so that you and your franchisees know what is expected of the other to achieve success.