Franchise Marketing – Why Invest in Local Marketing?
Posted on | November 8, 2011
It’s a question that was posed to me the other day whilst I was speaking to a franchisor about my company’s new Franchise Marketing System (you can read all about how it helps you support your franchise network in effective local marketing). They spend a fortune on marketing, he argued, so why would they spend more money on something new.
I asked him to list out where they spent their marketing budget. His answer:
- Creative Company
- Leaflets
- Posters
- Advertising
- PR
- SEO
- Website Development
The list was pretty good. I was impressed. They definitely were not shying away from spending money on marketing.
There was a problem, however. His franchisees were still complaining to him that they weren’t seeing return for their marketing levy. They weren’t happy, and they were letting him know about it.
He asked me the question: How can that be?
From my view it’s pretty simple. Just because you’re spending money doesn’t mean it’s money well spent. If you spend £70K on an advertising campaign that only generates £20K worth of business, do you really think people will be congratulating you on investing so much on your marketing? Like hell. They’ll be asking you why you wasted all that time and money with no reward to show for it.
You don’t get points for trying. You get points for results.
Back to my conversation. I more or laid out this same idea to him. The reason his franchisees were unhappy was that they weren’t seeing any benefit from the marketing spend. From their perspective, all they were seeing was money flying out the door. It never seemed to be coming back in.
Sure they got the leaflets delivered every month, and yes they were very pretty. But there was nobody helping them with what to do in their territory. Nobody really helping them get the most out of what they had to work with.
Now THAT is where local marketing comes in.
And the even better news?
It’s normally cheaper and more effective.
How? It’s a simple numbers game.
Let me give you an example. Say our franchisor decides to put on an offer and send it out to all of his network. He prints up 500,000 leaflets and gets them distributed to all 50 of his franchisees. It’s the same offer to everyone, with no recognition of the differences between the different local markets.
Now in this scenario, only about 15 of his network thinks that the offer will work in their territory. 15 out of 50. If we assume that they will only use about 30% of the printed leaflets, the numbers start to get scary:
500,000 Printed Leaflets: £5000
Distribution to 50 Franchisees: £500 (£10/franchisee)
Total Expenditure: £5500 (£110/franchisee)
Sure that’s not a lot of money. Only £110 per franchisee.
But hang on. Only 15 of the 50 are going to use the campaign, and they will only use 30% of the leaflets. If we look at those numbers we really only need to print up 45,000 Leaflets. That’s a much more targeted way of doing a marketing campaign – send out the most effective materials for those areas. The numbers look better:
45,000 printed Leaflets: £650
Distribution to 15 Franchisees: £150 (£10/franchisee)
Total Expenditure: £800 (£54/franchisee)
See any difference? We can make it even more brutal:
Total spent on mass campaign: £5500
Total spent on targeted campaign: £800
Wasted Marketing Spend: £4700
That’s 85% of the campaign budget being flushed away.
THAT is the importance of local marketing.
THAT is where franchises need to focus on.
And if you want to know more, give me a shout.
- Jordan
(This article was originally written at www.franchisemarketingsystem.co.uk – please contact Jordan directly if you’d like to learn more about Designate’s unique local marketing systems for franchises)
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