2023 AFDR Highlights, Half 5: Measuring Prices

Highlights from the 2023 Annual Franchise Improvement Report (AFDR) have been unveiled on the Franchise Management & Improvement Convention (FLDC) in October.

Members consisted of franchisors that accomplished an in-depth questionnaire on-line. Responses have been aggregated and analyzed to provide an in depth look into the recruitment and growth practices, budgets, spending allocations, and techniques of a large cross-section of franchisors. The info and accompanying commentary and evaluation supplied the premise for the 2023 AFDR.

A complete of 101 franchisors participated, representing 21,802 franchised models and a couple of,044 company-owned models. Regardless of predictions of a recessionary yr forward, contributors plan to open a complete of 1,725 new franchised models in 2023.

Highlights from the report have been offered in an FLDC normal session by Franchise Replace Media EVP and Chief Content material Officer Diane Phibbs and Wild Birds Limitless Chief Improvement Officer Paul Pickett. Beneath is the fourth in a sequence of chosen highlights. All convention attendees acquired a complimentary copy of the 2023 AFDR.

Measuring Prices

Large image? Value per lead rose and price per sale dropped. Now for some numbers.

• Value per lead. Amongst this yr’s respondents, 63% mentioned they tracked price per lead (which suggests greater than 1 in 3 didn’t!). That compares with 50% in 2021, 70% in 2020, and 79% in 2019. Whereas this metric is up from final yr, why it isn’t nearer to 100% leaves us baffled yr after yr. Pandemic disruptions apart, how will you plan a finances or consider its effectiveness when you don’t monitor the end result of your efforts?

Amongst those that did monitor price per lead, their common spend was $155, which fell from $197 in 2021 and $312 in 2020.

• Value per sale. Solely half (50%) of contributors tracked price per sale. Whereas that’s up from 44% in 2021, it’s down from 61% in 2020. So, half of those that took the time to fill out the AFDR on-line survey mentioned they did monitor their price per sale. Significantly, franchisors? Actually? Why not? Amongst these manufacturers that did monitor this all-important metric, their common price per sale of $10,086 in 2022 got here in between that of 2021 ($9,270) and 2020 ($12,138).

Value per lead and price per sale are arguably the 2 most necessary metrics in franchise recruitment. What Paul Pickett mentioned ultimately yr’s AFDR reveal is one thing the presenters have been saying for years: “If you happen to’re not monitoring price per lead and price per sale, try to be.”

Lastly, as we appear to marvel yr after yr, why 100% of franchisors don’t monitor these two crucial metrics stays a thriller—and a serious cause many growth departments proceed to fall in need of their annual targets.

Subsequent month: Gross sales Closing Ratios