You're Measuring What?: Using Metrics That Matter To Boost Franchise Sales
Sure, you're measuring your advertising spending and marketing budget. But are you measuring the numbers that matter? Savvy franchisors who do are reaping bigger rewards at significantly lower costs.
Advances in technology have made it easier than ever to track and analyze the performance of your marketing effort.
Today, two thirds of franchisors surveyed in Franchise Update's Annual Franchise Development Survey are using professional lead management systems--from vendors like eMaximation, IFX's CMS, MyBruno and FranConnect--that have provided them with terrific ways to track their lead sources and prospect pipeline to see where activity is coming from (and where it's not).
Don't take the wrong track to success
During the past few years, many franchisors have become accustomed to tracking only their cost per lead, satisfied this is the best tool to make their recruitment advertising decisions. But if they're not using their lead management systems to further track where the payoff is, then those systems aren't telling them what really matters: franchise sales. Look at the metrics that count, don't equate leads with success--start with sales and track backward from there.
Focusing on the wrong metrics was a problem long before the Internet and lead management systems came along.
Early in my career, when I started marketing and selling franchises, I had a boss who didn't understand performance analysis. Every four or five months, like clockwork, he'd rush to my office and exclaim, "Sales & Marketing Management? We can't afford this magazine!"
And I'd always remind him, "I know our cost per lead is the highest from this publication, but if you look at cost per sale it's lower than for any other media we use."
My boss based success on lead quantity rather than quality. Don't get romanced into counting numbers of lead forms—it's all about measuring your acquisition costs.
About a year ago, I reviewed the lead generation performance of a retail food franchisor. We discovered a costly disconnect between marketing administration and the sales team. The company was on a half-dozen online ad sites, and had recently dumped the lowest lead producer.
In checking sources for each deal they closed that year, wouldn't you know the website they axed was the top sales generator? The problem, of course, was that they were looking only at leads and buying advertising based on their activity flow. They made the all-too-common error of equating marketing success with number of leads delivered.
Identify time-telling benchmarks
In addition to sales results, it's important to quantify secondary metrics when reviewing your lead generation plan.
Unfortunately, we can't truly evaluate the success of some media sources for up to six months. Sales deals aren't immediate:
the average selling cycle takes 12 weeks, according to the Annual Franchise Development Survey. Consequently, if a few buyers respond to your online or print ad two months into the campaign, then you may not know how successful this source is for another three months.
Evaluating the performance of franchise shows certainly requires a commitment to no fewer than two events. I recently heard a franchise executive mutter, "We tried a show and didn't close anything. They don't work for us." How could he know yet?
Performance metrics aren't valid unless you have enough lead generation history. Working one trade show is like running an online ad for 30 days, or a magazine or newspaper ad one time. Metrics models for print media show that an adequate frequency schedule increases your opportunity for success by 200 percent or more.
The deeper you drill, the greater the payoff
Tracking discovery day candidates and applications by lead generation source is the most effective way for monitoring newer media buys. It helps you identify the initial quality of a lead source, and helps forecast its success in driving additional sales to your system.
From the starting gate, use the metrics that matter most and you'll accelerate your marketing success. Intelligent decisions can pay off big--especially in today's jungle of multimedia confusion and greater franchise competition.
Steve Olson is publisher of Franchise Update Media Group. He can be reached at email@example.com or by calling 800-289-4232 x209.
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