Most of us experience Artificial Intelligence (AI) on a daily basis. It’s used when Amazon recommends an item to purchase and Facebook suggests a friend. It’s used when we ask Siri a question or enter an address in Google Maps. AI has become a disruptor in leveraging customer data. It allows marketers to understand and predict purchase behavior, run more personalized marketing campaigns and develop stronger connections with customers. There’s no question that AI is a powerful tool that allows deep learning and insight. It’s benefiting many industries, including franchising.
Most franchises utilize a Customer Relationship Management (CRM) system to manage their customer database. And, mid- to large-sized brands also will use a CRM for their franchisee recruitment efforts. But, few, if any, have a CRM with AI capabilities. Imagine what your CRM and the data you’ve collected could tell you if you harnessed the power of AI?
Franchise sales and development are always challenging. You are searching for the right franchisees to join your system and help grow your brand. But, you typically have to do this with limited staff and resources. You may receive 100 leads, but you are only one person. How can you possibly call or follow up with 100 people and determine which leads are qualified and which you should focus your attention on? With AI added to your CRM, you can gather and analyze data that allows you to be more focused with your resources, maximize your ROI and improve your recruitment results. You can be more discerning about potential prospects. With AI, out of those 100 leads, you can identify the 10 with the highest likelihood of buying. And, out of that 10, you can determine the five who have the best chance of running your franchise successfully. Those are the five prospects you need to be focused on.
Where Do You Start?
First, if you don’t already have this data, you’ll need to determine the attributes that most of your brand’s successful franchisees possess. Ask your highest performing franchisees a series of questions, such as:
- Did they own a franchise or other business previously?
- Are they college educated?
- Did they work at a franchise as a teen?
- Do they have interesting hobbies or skills?
- Do they have the capital and net worth necessary?
- Did they fund their business with their own money?
- Are they passionate about food, retail sales, beauty, etc.?
- Do they have children? Or pets?
Unfortunately, many franchise brands don’t have this information currently. But, it’s not too late to gather valuable data on your existing franchisees. Next, you’ll ask these same questions of your franchisee prospects. Many brands are concerned primarily with the financial resources a prospect has, and while this is certainly an important factor, it can’t be the only consideration. Demographic and psychographic data also play a critical role in determining if someone will be a successful business owner and franchisee.
Analyzing the Data
Synuma’s CRM with AI then provides lead scoring. The technology compares data points on new leads (prospects) to data points on existing franchisees. The data points will be specific to the brand, because what makes a franchisee successful as a restaurant owner will differ from what makes someone successful as the owner of a tutoring franchise. This lead scoring determines the likelihood of both lead conversion (to a sale) and their success as an operator. If your prospect scores an “A,” then they are likely a good fit for your brand and you should spend more time and resources on the recruitment of that person. If they score a “D” or “F,” then you can focus your attention on others, who have more potential.
Artificial intelligence is a valuable tool in many industries. For franchise sales, it is critical. It allows franchisors and their development teams to:
- Enhance decision making capabilities
- Optimize resource allocation
- Better qualify leads
- Improve recruitment results
- Increase closing success rates
- And, select franchisees who are most likely to succeed
AI can provide the edge franchise developers need to grow strategically without additional manpower and resources. And, in this highly competitive and evolving marketplace, most brands can’t afford to waste time and money chasing the wrong prospects. There’s never been a more important time to make smart decisions based on real-time data and predictive analytics.