Opinions expressed by Entrepreneur contributors are their own.
Return on Investment (ROI). It’s what every brand wants from its franchise digital marketing dollar — money that’s often begrudgingly spent even though most brand leaders know they need to budget for it. Still, doing so isn’t like allocating money for research and development or human resources, where cost can be more easily measured against return. Now more than ever, digital marketing is a nuanced tool that can add tremendous value to a brand name.
For the same reason, it can leave investors feeling like they aren’t getting their money’s worth. So, how do you measure its value? What criteria do you use, and how focused should you be in determining your franchise’s digital marketing ROI? Well, a lot depends on, well, a lot.
The right partnership
Getting a good read on your franchise marketing ROI should always start with establishing a clear and consistent baseline against which it can be measured. It should account for external factors that may impact a campaign’s success, like weather, seasonal trends, economic pressures (think pandemic) and more. Perhaps most importantly, it should consider the skill and experience of the person or the team doing its monitoring and measuring.
These days, most consumers take their time before purchasing, partly because there are many ways that decisions can be influenced. The digital landscape is increasingly fragmented, and the buyer’s journey doesn’t always start at A and end at Z. A buyer’s digital experience is virtually limitless, which is why it’s essential that your team measures ROI holistically, not just channel — or platform-specifically — and that means it’s essential to partner with marketers who can see the big picture and help you see it, too.
Think about it: we all rely on the advice of experts — accountants, plumbers, lawyers — and you should seek out a digital marketer with the same intention as a doctor or mechanic, as someone who can help you understand a complex scenario and guide you through choices. Good franchise digital marketing integrates many efforts — content, paid advertising, social media, SEO, and more — and experienced franchise digital marketers know that ROI should be measured using a predetermined set of key performance indicators (KPIs), metrics that reflect your objectives. Common franchise development KPIs include cost per lead, click-through rate, organic traffic and more. An experienced franchise digital marketer can help you determine which KPIs are best to focus on, given your brand’s history and goals.
Emerging vs. established brands
Identifying what KPIs to focus on as a franchisor will very much depend on whether your brand is an emerging one — new to the industry with a lot to prove — or an established one with a reputation, one that’s either served you well or hasn’t (and here’s where reputation management is critical. An experienced digital marketing agency can help you with that, too!). All franchisors measure success by the number of franchises they sell each year. Still, an emerging brand may have other criteria they’ll use in addition to sales, like whether or not they’ve articulated their story and purpose effectively, whether they’ve reached the best and broadest audience possible, and how clearly they’ve outlined their value against that of the competition. This will mean adopting a long-view marketing strategy that may take more time to measure.
Conversely, an established brand with a good reputation will likely have very different goals that are a subset of the ultimate goal, which is to sell franchises. They may want to reach new personas, like multi-unit owners or veterans, the market for a specific territory or region, or focus on a particular competitive advantage. These goals are more precise and, therefore, may be more easily measured; they might also be more quickly realized because marketing strategies can be highly tailored to meet them. For brands suffering from poor reputation management or a history of dissatisfied customers, marketing efforts will take on a completely different tone and objective, one that looks to reestablish trust and reiterate worth, neither of which can happen overnight.
The lifetime value of your brand
As someone who’s been in the franchise marketing sphere for a decade, it’s my experience that whether you’re a franchisor or a franchisee, ultimately, the real return on investment depends on how you view your marketing dollar in the first place: is it an expense meant to deliver results quickly, or an investment, one made for long-term growth? You’d be wise to approach it from the latter perspective.
All your marketing efforts should add to your brand’s equity or its lifetime value — the place it has in the hearts and minds of consumers and the public, people who include potential franchisees — and that almost always takes time to establish. Most investors want to align with brands they can believe in and trust, in other words, brands that have worth beyond what can be measured by KPIs and ROIs. A brand’s worth is built over time — often years — through creating awareness, articulating culture and values, delivering on promises, and encouraging loyalty; again, this means taking a long-view approach to your marketing strategies and determining ROI.
Taking a long view is especially important in franchising because it’s set up to reward patience financially. Hefty one-time franchise fees paid by new investors and ongoing monthly royalties (typically 5-8% of gross sales and the real bread and butter of a franchise brand) can add up and contribute tremendously to brand value. Every franchise that is sold adds to a brand’s inherent worth, and that growth can only happen if you commit your marketing dollars to work over time. Franchisees, too, should view their local marketing efforts as an investment in their presumably long future, one that’s meant to slowly and steadily grow their presence and value.
In the end, ROI should always be gauged against the cost of not creating a budget for regular and comprehensive digital marketing. Your brand doesn’t exist in a vacuum and can’t grow unless you do what others want: believe and invest in it.