Marketing is becoming more of a mainstay in boardroom meetings as other Executives in Franchise organizations are understanding the capabilities using today's marketing technology. Being able to assess franchise marketing performance is now an essential skill and franchise marketing mangers need to understand the metrics for success. Here are the 5.
1: Franchise Retention Rates: In a franchise atmosphere, this could mean both retaining customers at the local franchisee level or retaining actual franchisees themselves. Driving sales is important but understanding your retention rates are huge. Taking it a step further, being able to find your biggest advocates is also very important. In another post, we will go into NPS, aka Net Promoter Scores.
2: Customer Lifetime Value (CLV): This is the KPI to measure the net profit of one of your franchisee's customers for as long as they retain that customer. Who are their most valuable customers? Where are they coming from? Who should you help them target? These are all questions you should ask.
3: Franchise Aquisition Cost (FAC) / Customer Acquisition Cost (CAC): I separated these two into two different ones because you should be able to distinguish the two. When if you have a completely separate Franchise Development team and budget, as the CMO, you should know how much it costs to acquire a new franchisee. Just like a restaurateur knowing his or her food costs, you should know the "nitty-gritty" inside your system. Both metrics are useful for more established franchise systems when looking at trying multi-channel approaches to new garner new franchisees or to capture leads and customers at the local level.
4: ROMI: When you take your total marketing spend and put it up against the profit made after marketing activities or campaigns. A good strategy here is to compare channel over channel to see which one is bringing in the most return. At Market Loyal, we use Hubspot Sources and Hubspot Advanced Reporting to track our franchise clients' ROMI.
There are many other metrics to consider but in our opinion and our experience working with Chief Marketing Officers and Marketing Managers in the franchise space, this is a good place to start. For more info on marketing metrics or inquiring how to work together, call 866-887-4624