Over the past several weeks, we have seen a lot of changes that have resulted in uncertainty for what will become the new normal. Many of us are working from home while others are working hard in their retail or restaurant locations trying to meet the demands of the new shelter-in-place market changes.
The new outlook is also taking shape in the franchise lead generation landscape. Just like sales on the consumer side for many brands, certain industries are also seeing steep declines in franchise leads. However, that doesn’t mean that franchise inquiries and sales are not happening. According to the GlobalWebIndex Coronavirus Research Report published earlier this month, “Over 80% of consumers in the U.S. and UK say they consume more content since the outbreak, with broadcast TV and online videos (YouTube, TikTok) being the primary mediums across all generations and genders. Unsurprisingly, 68% of consumers are seeking out pandemic updates online over any other activity.”
Franchise brands know that they need to be patient during this time, but they also need to be proactive and ready for when the market improves. Some business sectors are being more aggressive today than others. Business Services and Commercial and Residential Services brands continue to invest near pre-COVID-19 levels. According to a recent survey by FranConnect, it’s not surprising that the restaurant and personal services industries, which have taken some of the biggest hits of this pandemic, are lagging behind on media spend. This graph from FranConnect illustrates that trend.
Despite the huge hits in the restaurant and personal services industries, there are optimistic multi-unit investors that are planning for their future. They are looking to the future to capitalize on the opportunities that this downturn will afford them. Some of the key areas of opportunity that can be considered include:
Real Estate – Deflation of real estate pricing, as well as lower interest rates, will allow some buyers to acquire property at a low rate. This story plays out in a recent article from The Financial Times that illustrates the cause and effect of COVID-19 on the real estate industry. In addition, multi-unit operators are finding opportunities for the future that will aid in their development plans as described here.
Commodity Pricing – There is a direct correlation between commodity pricing today due to the lower demand by restaurants and dropping oil prices. The opportunity to negotiate contract rates for key product now could pay off today when cash is tighter and later when volume picks up.
Attrition – According to the FranConnect survey, when asked “what % of Franchisees do you believe are at risk of churning (turning over) as a result of the COVID-19 crisis,” answers varied significantly. Half of Franchisors expect less than 10% attrition rates, whereas a quarter of those surveyed expect more than 25% of their Franchisees are at risk of churning. The reality, unfortunately, can be one group’s despair and another group’s opportunity.
As brands consider what is the right path for them, there are a number of key elements to consider. For example, service brands with essential services that are flourishing during this time will not have the same headwinds that the restaurant industry does with the decline in their overall business.
- Awareness vs. Lead Generation– Given today’s environment, it is important to stay in front of buyers for when they are ready. Not all advertising efforts will or should produce leads. Instead, planting the seed for when buyers are ready to make their move is an important long-term strategy today. After seeing a large dip in Google searches between March 15, 2020, and March 22, 2020, search volume for general business and franchise opportunity terms has normalized and is only slightly below what we saw in 2019. It also appears that these terms have been on a rebound since the start of the global pandemic in early March, indicating that prospects are beginning to start their research process again.
- Consumer Connections – In this era of being there for each other more than ever before, consumers will remember when you came to the table for others during COVID-19. Take credit for the good you are doing. But don’t tag on a blatant franchise development message. Just relish in the goodness that you are doing for others. It is more about awareness than lead gen. Some recent examples of Franchisors putting their communities first include: Tropical Smoothie Cafe and Inspire Brands.
- Be relevant – Let’s face it, there is new vernacular that our society has heightened its awareness to and is expected for relevance and trust. Now is the time to showcase how you provide “contactless” delivery of your product, how you are “essential,” or how you provide “emotional support” for consumers who are grieving about the way their life used to be. How are you supporting your existing franchisees who are undoubtedly facing their own challenges? Share these initiatives as well. After all, people want to invest in brands that care about their franchisees.
Overall, the message that stands clear is that you need to be nimble and change your strategies and messaging to acknowledge the situation we are all working to now live in. Does your website or candidate drip campaign reflect or acknowledge this? At the same time, take advantage of opportunities as they present themselves. Otherwise, you risk being a step behind as we evolve into a post-COVID-19 world.
Want to learn more about how your brand can navigate franchise development today? Let’s chat.