Franchise Update Magazine Issue IV, 2016 | Page 33

“Responses were aggregated and analyzed
to produce a detailed look into the recruitment and
development practices, budgets, and strategies
of a wide cross-section of franchisors.”

• Where the digital money goes. We also asked franchisors to break out their digital spending. Franchise opportunity
sites, the largest category by far, accounted for one in three
dollars in this category (33 percent), down slightly from 36
percent last year. Pay-per-click remained steady at 18 percent,
while SEO (12 percent) fell slightly from 15 percent last year.
Together, PPC and SEO accounted for three in 10 dollars spent
on digital (30 percent). Email marketing, social networking,
and remarketing together accounted for about one in three
dollars (28 percent) spent on digital marketing in 2016.

• Top sales producers. After taking the lead in 2012 as
the top sales producer, digital continues to dominate, holding
steady at 42 percent over the past 5 years. The other sources,
which accounted for about six in 10 sales, have remained
fairly steady over the past 6 years (except for “Other” in
2011, which has fallen by more than half as franchise brands
have become better at tracking the sources of their sales).
Referrals, considered by most to be the strongest source of
leads, remain responsible for three of 10 sales (30 percent).
However, when it comes to attributing sales to online or
digital sources, it’s important to keep in mind that, as Gary
Gardner, chair of Franchise Update Media, pointed out at
last year’s conference, “The last click gets the credit.” He
urged attendees to consider the extent to which their other
efforts contribute to the more easily measured digital share
of spending on sales.

• Top digital sales producers. With digital spending
accounting for more than four in 10 sales and holding steady
for the past 5 years, we asked respondents to segment their
digital spending as it relates to sales. With the numbers for
2016 nearly identical with those of the previous year, we
can surmise that, after an uneven beginning as franchisors
learned the ropes of online recruitment, digital has settled
into place as a source for franchise sales (that is, until the
next disruptive technology appears on the scene). Over the
past 3 years, ad portals led the way as a source for franchise
sales, accounting for about one in three sales over the past 3
years. The next two leading digital sales sources, SEO and
PPC, also have held steady for the years 2014 through 2016.

• Measuring costs. About six in 10 respondents said they
track cost per lead (61 percent, compared with 60 percent last
year) and cost per sale (57 percent, compared with 58 percent last year). This means that four in 10 respondents still
do not track cost per lead and cost per sale, a number that
franchise recruitment experts continue to shake their heads
over, wondering how any professional sales team can set a
budget, spend the money, and not measure the effectiveness
of that effort. On a positive note, the number of brands tracking cost per lead and cost per sale has improved from several
years ago (52 percent in 2014, about the same in 20