Marketers have struggled to zero in on truly meaningful metrics for years. Before technology made it possible to track and analyze the performance of your marketing efforts, assessing the team’s impact on sales was extremely difficult if not impossible.
Even with all of today’s extremely powerful digital management tools, many franchisors still find themselves in the dark when it comes to metrics that matter. While it may seem trivial, looking at the wrong numbers can mean sticking to ineffective strategies or failing to realize marketing successes when they happen.
Let’s take a closer look at the wrong way to approach reporting as well as three of the most important metrics you should be paying close attention to each month.
Measuring marketing success from the wrong angle
Today’s marketing management tools are sometimes so powerful, the sheer amount of data to wade through can distract franchisors away from marketing’s ultimate goal: franchise sales.
While metrics like cost per lead are an extremely important part of the broader equation, leads aren’t what matter to your company’s bottom line. Starting from your franchise sales and working back to identify where those sales are originating is the approach every franchise marketer should be taking if they want to communicate their successes effectively to decision makers.
Three franchise marketing metrics that focus on results
To get a better pulse on the effect your marketing efforts have on franchise sales, here are three marketing metrics to pay attention to:
1. Marketing percent of franchisee acquisition cost
This metric uses the total cost of a new franchisee to the company to distill what part of that cost is coming from marketing specifically.
If you’re not using this as a primary performance indicator yet, this is a crucial. You may come to find an alarming amount of your total spend being allocated to marketing. If this percentage increases over time, shifting your marketing strategy to something more effective should be a top priority.
To calculate it, you’ll first need to find out how much it costs to acquire a new franchisee. This metric will be a percentage of that total franchisee acquisition cost (FAC).
To get the FAC, simply add together the total costs of sales and marketing and divide by the number of new franchisees in given period of time.
To find the percentage marketing is responsible for, simply divide the total marketing cost by the combined sales and marketing costs. The result will be the percentage of the FAC going specifically to marketing.
FAC = (sales cost + marketing cost) ÷ number of new franchisees over a specific time period
Marketing % of FAC = marketing cost ÷ (sales cost + marketing cost)
2. Marketing originated customer percent
This metric is expressed as a ratio showing what new business the marketing team is driving by determining how many of your new acquisitions started as marketing leads.
The formula here is pretty simple:
New franchisees who started as marketing leads ÷ the total amount of new franchisees in a given span of time = the marketing-originated customer percent
This metric is a straightforward way to draw a direct connection between your lead generation efforts and actual new sales being made.
3. Marketing influenced customer percent
This metric considers all of the new franchisees marketing interacted with as leads at some point during the sales process. It’s a great way to illustrate the ability of marketing’s influence on leads during the often long and arduous franchise sales process.
It’s also extremely quick and easy to calculate:
Number of new franchisees in a given time ÷ the number of those who interacted with your marketing team
It’s important to remember that while these can be important components of your reporting process, you shouldn’t simply ignore softer metrics like site traffic and conversion rates. Instead, focus on illustrating how your approach is affecting the bottom-line results.