Marketing effectiveness is an
important business driver.
Take one of the franchise systems we work with as an example. The 18 clients we work with in that system have +6% higher sales this year, on average, than the franchisees within that system that don’t work with us. That’s a lot of money.
Another example: a multi-market specialty
retail client comes to us with a traffic problem and 18 months later, they have
a transformation case study with +5.3% in-store traffic growth and 54%
e-commerce growth. No change in budget, just in strategy.
How do some franchisees thrive in
marketing where others fail? There isn’t a silver bullet answer. The answer lies
in creating a marketing performance system. The system is what drives the
growth. Not overnight, but certainly over time. In our agency’s experience, working
across dozens of franchise systems for nearly 40 years, the key components to a
high-performing marketing system are:
1. Know what elements of the marketing mix are
working best and which are not performing well, and adjust accordingly
2. Run a wide marketing mix continuously
3. Constantly optimize for price and performance
within each channel and for each struggling location within the footprint
Know What Works
Easier said then done. There are three
levels of measurement needed for an optimal marketing system.
1. Mix measurement. Marketing mix modeling helps
the advertiser understand what has worked in the past, and the most optimized mix
to drive success in the future. This is accomplished by analyzing two years of
historical data or creating synthetic models using proxy data from other similar
clients.
2. In-channel measurement. Connecting
business results to each individual marketing effort, like social, search, TV,
etc. Easier said than done, this requires a sophisticated approach of direct
measurement (tying traffic/sales/leads to individual marketing exposures) and
mathematical measurement (regression, correlation, test/control lift, or tie-backs
to the mix models). The important piece here is to have a signal that tells you
what is driving a business result within a channel.
3. Location-level measurement. Getting a
read on traffic or sales patterns at the individual location level. Trending
this data can show when marketing treatments might need to be adjusted for an
individual location, or where more focused spending is needed.
Run a Wide Mix Continuously
Focus can be a business driver for
a franchise model to succeed, but it doesn’t work very well in media. Our performance
models almost universally show that a wider mix (with many channels “on” at the
same time) outperforms a narrow mix. At the same time, running in continuity
from week to week outperforms “pulsing” marketing off and on from week to week.
The lone exception here is for highly seasonal businesses. E.g. businesses
where the majority of their business results are achieved in just a few weeks
of the calendar year.
Mostly, however, a wide mix with a
continuous flighting are the best tools for a successful marketing system.
Constantly Optimize for
Price and Performance
This final piece of the effective
franchise marketing system is where everything comes together. With performance
data in place, optimization levers can then be pulled to increasing effect. Within
each channel and for each location, performance data should come together with a
strong understanding of the right price to pay for each type of marketing and
the most effective targeting within that marketing. What is a good cost per
1,000 impressions? What is a good cost per click? What is a good ROI for that
channel? What target audiences perform best in that channel? This is where historical
benchmarks and leading benchmarking tools are deployed for ongoing
accountability for all the ads running in the marketing mix.
Mastering this game requires expertise
across a number of advertising channels. Not everything needs to be done
in-house, nor does everything need to be done by an outside partner.
The smart franchise marketing
leader will know where their individual or team’s expertise ends and where
outside help is needed to deliver against every marketing touchpoint
effectively.
With this full system in place,
turnaround stories and periods of consistently high growth become much more
likely.
