Predictions for Franchise Development and Lead Generation for 2024
UPDATED February 6, 2024
January 31, 2024 – “Prediction is difficult- particularly when it involves the future,” said Mark Twain – or was it Yogi Berra – or Neils Bohr?
But few things are less certain than the continuation of gravitational trends that we identify below. The only questions are the velocity and acceleration of these trends.
Summary: The “fish” are going to be hungry and plentiful, but the forecast calls for soaking rain, two foot seas, inopportune tides, and a cold headwind. Bring the right gear, learn a few new tricks, lean into it – and win in 2024!
The most reliable options for franchisors to directly acquire prospects in recent years – email and text marketing, paid search and social media – are all undergoing significant change, as are the dominant mobile and desktop platforms offered by Google and Apple (and a few others hardly worth mentioning).
The same force impact the ability of third party providers – franchise portals, for example – to supply their franchisor customer’s lead generation demands.
The net effect is that greater efforts and expense will be required to achieve aggressive franchise development goals, but those who rise to the challenge will be rewarded.
First, some happy predictions…
This is going to be the best year for franchise sales since before the pandemic. Why?
- Consumer sentiment is rising sharply, according to the Conference Board’s Survey of Consumer Confidence and The University of Michigan Consumer Sentiment Surveys as seen on the St. Louis Federal Reserve’s FRED website, with both measures in an uptrend since June 2022.
- Further, our own monthly Small Business Sentiment surveys show a rising trend to a one-year high in startups planned for within the next twelve months.
- Employers are less hungry (desperate) as job openings decline. White collar workers are less able to “job hop” for higher pay.
- Remote work opportunities are waning, and the “back-to-the-office” push will drive more entrepreneurs to make the move towards being their own boss.
- Financial conditions are loosening in anticipation of lower interest rates, making credit less expensive for borrowers.
- The stock market reaches all-time highs, and along with elevated home prices, supplying franchise with access to funds, increasingly from their own personal sources.
AI will create great opportunities for those willing to invest the time and effort to get down the learning curve.
If you’re not using AI tools in 2024, you are going to fall behind. Conversely, some time invested in experimentation will reward you with labor-saving, creative ideas, and potentially superior ad performance to more than make up
Nearly a third of B2B marketers are using AI for outbound sales communications, website and email content, chatbots, coding, and design, according to this survey from August 2023, which is now almost six months ago.
In fact you are already using AI if you buy ads on Facebook and Instagram, which already use AI to optimize ad placement. If you use Google paid search marketing, their Performance Max option employs AI to discover and optimize ad placement in new venues.
The Most Active States for Franchise Growth Will Continue to Outperform
The states which are winning the migration of franchise interest will continue to benefit from the trend towards states that match prospects’ perceptions about favorable climate, business conditions, lower regulatory burden, and taxation.
Gen-Z is Coming Up Fast, and Will Represent One Out of Every 20 Buyers in 2024
As we noted last year, this trend has significant long term implications for franchise lead generation because of the unique media preferences and habits of individuals in this generation currently aged 12 to 27. As Google and Meta attempt to counter the explosive growth of TikTok, expect to see more short-form videos preferred by Gen-Z showing up, for example, in Google search results and as Instagram reels. YouTube (owned by Google) follows Google as the world’s second most used search engine, and ranks second behind TikTok for minutes of usage.
Gen-Z made up 2.7% of our monthly Startup Sentiment Survey respondents in the full year of 2023, off from 3.29% in 2022, which was a 33.7% increase from 2021. We have no explanation for the dip in 2023, though higher interest rates and record high employment may have been factors. Nothing will keep that cohort from growing in 2024, and over the next twenty years, the leading edge of this cohort will be moving into the prime years for entrepreneurship and franchising.
Now, some frustrating news…
The Two Biggest Suppliers of Franchise Leads are Facing Headwinds and Supply Constraints
Three weeks ago, we summarized some of the challenges faced by Meta, owner of Facebook and Instagram, two popular options for franchise lead generation, not the least of which includes the possibility that we have reached “peak social media.”
Google faces its own headwinds, from antitrust, regulatory and competitive forces, to consumer adoption of generative AI-enhanced search results, and advertisers competing for a smaller piece of the pie, given further restraints on the real estate given to “free” or SEO-driven results.
Google released Q4 results yesterday, including “Search and Other” revenue up 12.7% to $48 billion. They integrated Gemini into search results beginning this month (January 24), along with new AI features for advertisers which should help with ad creative and potentially increase inventory. So they are leaning into these headwinds, and we would not bet against them in the longer term.
Franchise Sales Teams are Going to Witness Drops in Email Lead Generation
Email continues to be a valuable workhorse for franchise lead generation and prospect nurturing. Apple’s Mail Privacy Protection initiative, introduced in 2022, limits your ability to target emails and measure the performance of your email campaigns.
If that is not enough, in October, Google and Yahoo (two of the largest email hosting platforms) announced changes going into effect in February, 2024 that will severely impact bulk emailers (do you send email blasts to prospects?) who are not in compliance with their standards for email authentication, and unsubscribe and opt-out links.
If this is the first you’ve heard about this, or you are unfamiliar with those terms, jump on your provider. You can get a good overview here, though you may have to give up your email address to download the guide.
Targeting Prospects and Tracking Ad Performance Will Be Much More Difficult, with Fewer Options
If you subscribe to Franchise Insights, you have read about Apple’s mail privacy and app tracking changes and their impact on Meta’s lead generation potential, along with Google’s plan for the end of 3rd party cookies and removal of search keyword data from its analytics product.
The rumors of the death of tracking cookies has been greatly exaggerated, but Google pronounces them dead-dead in 2024. Google is finally killing cookies in the world’s most used browser (and they mean it this time) Are you part of the 75% of marketers who still rely heavily on cookies?
Franchise advertiser favorites – like retargeting past visitors to your franchise development website or other third party sites – is fading into history in 2024. But of course, the upside for Google and Meta is that they offer their own walled-garden retargeting options for a piece of your ad budget.
Apple’s iOS Version 18 Will Bring the Biggest Changes Ever to the Dominant Mobile Platform for Reaching Franchise Buyers
We have no idea what will be inside, but chatter suggests iOS version 18 will be Apple’s biggest iOS update ever. With all the pressure on privacy, and a history of unilateral actions with stultifying impact on advertisers (see targeting and tracking above), there is reason to worry. Rumors include better AI integration into Siri, which may offer better options for voice searches.
In the weeks and months ahead, we will be doing our best to arm you, ourselves and the customers of FranchiseVentures lead generation platform with the tools and tips to compete effectively and grow in this challenging environment.
FranchiseVentures is the leading franchise lead-generation platform for potential franchisees to thousands of growing franchise systems in the United States and Canada. Its franchise lead generation brands include Franchise.com, Franchise Solutions, Franchise Gator, Franchise Opportunities, Franchise For Sale, SmallBusinessStartup.com and BusinessBroker.net, and together they provide the largest aggregation of prospective franchise buyers in the U.S.
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Published on Wednesday, January 31st, 2024.