Referrals and LTV – The Best Kept Secrets in Franchise Lead Generation
September 14, 2022 — In comparing lead sources, “price”, and even the holy grail – “cost per sale” – can be misleading. There are two other critical variables in assessing return on your investment in franchise portals or other third party lead suppliers. In this article, we discuss the first one.
What happens after a prospect requests information about your franchise?
After aspiring business owners submit inquiries on a franchise portal, very few end their search there. How many, being exposed to your brand and requesting information about it, continue their research while awaiting your response? Where do they go?
In August and September 2022, 70% percent of them went on to visit your franchise website. Over half of those (41% of all) fill out the lead form on your franchise website right after having requested information via the franchise portal.
“Referral value” or “pass-along value” are phrases used to describe this value. These very interested prospects get attributed to the franchise website, even though they originated on the portal. This is a good thing, though it leads to grossly understating the return on your investment in portals.
Summary: Franchise portals drive referrals to your franchise development website, in addition to franchise leads they provide.
What would explain this phenomenon?
Recent data shows that only 6.2% of prospects using are very familiar, and 20.8% are somewhat familiar with the opportunities they inquire about on franchise portals. Over 38% are first introduced to the franchise on the portal visit. This is part of why third party sites like franchise portals are important to franchise development.
What’s the other key variable? LTV (Lifetime Value)
Lifetime value is the cumulative return over the useful life of a lead. When a prospect is researching and considering franchise ownership, but planning to move forward in the months or years ahead. We will discuss the lifetime value of a lead, how to measure it, and how to harness it in a future article.
The “Mystery Shop” survey is conducted monthly by FranchiseInsights.com from a sample of franchise inquirers across the FranchiseVentures lead generation platform. The data presented here is from August and September 2022.
FranchiseVentures is the leading demand– and 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 Thursday, September 15th, 2022.