Franchise Update Magazine Issue IV, 2015 | Page 33
• Where the digital money goes. This year saw the introduction of a new survey question, asking franchisors to break
down their digital spend. The largest category by far, accounting for more than one in three dollars spent in this category
(36 percent), was franchise opportunity sites. Pay-per-click (18
percent) and SEO (15 percent) together accounted for another
third, with email marketing, social networking, remarketing,
and other business media sites split about evenly to account
for the remaining third of digital spending for recruitment.
• Top sales producers. Digital wins again, accounting
for more than four in 10 sales (42 percent). Remarkably, this
number has remained exactly the same the past four years. Referrals remained second at 27 percent, dropping slightly from
the past four years. Sales through brokers, at 15 percent, have
essentially held steady since 2010. Sales attributed to print (3
percent) remained the same as the previous year, about the
same as sales from trade shows (4 percent) and public relations (2 percent). One encouraging trend is that the “Other”
category continues to decline, indicating that franchisors are
doing a better job of tracking the sources of their sales. However, looking into the number of sales attributed to online/
digital sources, Gardner said, “The last click gets the credit,”
and he urged attendees to consider the extent to which their
other efforts contribute to the digital share of spending.
portals in 2015 (33 percent)—which fell significantly in 2013
(to 23 percent from 43 percent in 2012) before bouncing
back to 35 percent in 2014—were the largest sales producer,
about the same as last year. Possible reasons include better
performance by portal operators, better communication and
collaboration with franchise sales departments, and changes
in how prospects search for brands. Pay-per click, at 15 percent remained steady.
• Measuring costs. Six in ten of respondents said they
track cost per lead (60 percent) and cost per sale (58 percent).
This means that four of every 10 respondents said they still
do not. The average cost per lead in this year’s report was $97,
and the average cost per sale was $6,300 (down from last year).
When it comes to those franchisors not tracking cost per lead,
this year’s 40 percent figure compares with 42 percent last
year, 28 percent in 2013, and 35 percent in 2012. Although
this year’s 42 percent who do not track cost per sale—clearly
the most important metric for a franchise development department—should be a serious concern at those brands, overall that figure is down from last year’s 52 percent, about the
same as in 2013, and a strong improvement from 65 percent
in 2012. So while the trend is positive, it remains inexplicable
that in 2015 four in 10 professional franchise development
departments still don’t track cost per lead and cost per sale.
“If you’re not tracking this, you have to start. You need these
metrics,” said Gardner.
• Closing ratios. Mixed news here. For whatever reasons—
perhaps the uncertain economy and low consumer confidence,
or perhaps simply that 2014’s respondents reported unusually
high numbers (in the opinion of last year’s expert panel)—
closing ratios in 2015 fell for leads to sales, applications to
sales, and discovery days to sales compared with 2014. For
• Top digital sales producers. Since digital spending accounted for four in 10 sales, we asked respondents to segment
their digital spending as it relates to sales. The numbers for
2015 were nearly identical with those of the previous year.
Following a steep decline in sales attributed to SEO last year
(24 percent compared with 49 percent in 2013), the number
for SEO remained the same this year. Sales from online ad
Franchiseupdate I S S U E I V, 2015
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