From a “terrible” franchisee retention rate to 96 per cent. From an introvert to becoming CEO and president. David Mattson, along with his Sandler Training brand, have evolved, pivoted, and adapted through the years to establish a global brand that many a franchisor can learn from.
Interview by Amanda Peters, staff writer at Global Franchise and What Franchise
AP: What first attracted you to the Sandler brand?
DM: I was initially a client. I was an introvert and didn’t really have any experience, so my employer at the time required me to go to Sandler Training, which I resisted. I thought salespeople were born and not made, so I didn’t see the value in it. However, I quickly realized that Sandler advocated a conversational sales model based on psychology. I didn’t have to become somebody that I was not, and I could just leverage who I was. I started to practice, and I became my firm’s top salesperson.
I then thought if I joined Sandler, would I become even better? I went on to work for a local franchisee and had the privilege of meeting David Sandler, who was running our conferences. Two years in, he mentioned that he was looking for somebody to train all the new franchisees. I looked over and my hand was up – I wanted to take on that task. And the rest is history.
AP: How has the brand evolved since you took over as CEO and president?
DM: I purchased the company in three chunks: 25 per cent in 1994; another 25 per cent in 2007; and finally, 50 per cent in 2012. Through the years the marketplace has evolved and Sandler has been able to remain viable as an established brand while going international, as well as managing to pivot to match the new generation of learners.
AP: What steps were taken to increase franchisee retention?
DM: I think the biggest mistake franchisors make is to think because they are good at what they do, they must be good at being franchisors. Most struggle in the retention area for the first 10 years because they’re trying to make that transition, and we were no different. We had a terrible retention rate early on as we were of the mindset that the fittest of the fittest would make it, but it was wrong as a franchisor. I now have a 96 per cent retention rate, and that includes retirement, which is extremely low for a white collar franchise.
We acknowledged it was an issue and had to treat people that were coming into our system in the first one to three years completely different than we would train and treat our veterans.
We quickly pivoted to a special ramped up program and created key opinion leaders (KOL). They were 24 consultants from the field who we would run everything by, whether it was product rollout or a shift in philosophy. It did cause some heartaches occasionally and was resisted internally by my management team. Personally, I welcomed it, because my mentality was if I can’t convince these people that it is a good idea and allow them to tweak and personalize it, then chances are it’s going to be a bad idea. The KOL have saved me time, energy, and money versus seeing it as a distraction. This changed the way we looked at everything.
We also assigned a personal coach to newer people. Although coaches spent a lot of time on products and services, they were also like Dr Phil, dealing with the fear, doubt, and worry that new franchisees often experience.
We also focused on three areas we call the success triangle, which includes attitudes, behaviors, and techniques. It isn’t only about technique, we also gave franchisees all this psychology and mindset resources. Everything that we do touches these three areas and we found that our acceptance and implementation levels and success went through the roof.
AP: How has the coronavirus crisis affected the business?
DM: Last year we trained 31,000 people in a classroom and an additional 19,000 virtually. Within three weeks we’ve shifted to 100 per cent virtual because I had planned for a correction in the marketplace. In my industry, the first thing that gets cut isn’t training necessarily but it’s travel budgets, which in essence decimates training.
We knew that was going to happen and we shifted three years ago to virtual. A big innovation for us is that I’ve taken 100 per cent of our learning assets and put them into the Amazon Alexa voice platform.
“We have no debt and operate expecting the worst and being pleasantly surprised when it’s not”
We have responded to the changing times and users don’t have to worry about trying to figure out how to log on, as they can just use their phones. In our virtual classrooms, we’re getting higher satisfaction rates than we did face-to-face. I don’t understand it but I guess it’s a testament that we’ve pivoted properly.
AP: Are there any takeaways from similar periods of economic uncertainty that could provide some guidance to franchisors struggling amidst COVID-19?
DM: I’d been planning for an economic downturn for two years, as it is expected to happen in the U.S. every eight-plus years. To begin with, I’m very conservative – we have no debt and operate expecting the worst and being pleasantly surprised when it’s not. As a franchisor, we know this too shall pass. But at the same time, I don’t expect everyone to make it. We’ve been pragmatic and identified those partners and have created playbooks for them.
What worked in January is not working today. For instance, we immediately retooled our marketing, webinars, scripts, approaches, and pricing model. People said that we’ve destroyed the brand, but we are managing this company in 30-day segments and making decisions that will help sustain both our customer loyalty and our franchisees’ financial health and wellbeing. Apart from cost-cutting, we threw out our annual projections. Although we had our best year in 2019, I forecasted 45 per cent less revenue for this year.
We also segmented our client base into four key areas: keep, attain, recapture, and expand (KARE). This includes the accounts we want to make sure we have our hands-on, what new ones we want to go after, and the old ones we want to get back.
As a franchisor, you’ve got two big challenges on your hands right now. You’ve got to look down and figure out what to do in this current time but also look forward to seeing how you’re going to come out of this in thrive mode and not just survival mode.