Promoting a concept, generating leads and converting them into business deals require many heads to storm into a difficult bastion and brainstorm. Where, why and how much to spend are some common but tough questions to deal with. We asked some education f
Promoting a concept, generating leads and converting them into business deals require many heads to storm into a difficult bastion and brainstorm. Where, why and how much to spend are some common but tough questions to deal with. We asked some education franchisors how they allocate their recruitment budget and justify the way they spend.
SO far, the year has seen a wave of optimism among education franchisors in terms of expansion plans, as most of them had an average plan of opening 70 to 100 franchise units. Going by the thumb rule, of the 100 leads generated, only 1 to 2 per cent leads to franchise success, which means that a franchisor looking at aggressive expansion plans would need to generate thousands of investor leads to achieve a target of 100 franchise stores. Now, there are only two ways of achieving this target, either the concept should be promoted aggressively through various sources of promotion (Internet, print media, tradeshows, publicity/PR, franchisee referrals, brokers, etc, as most of the franchisors do), or the conversion rate be improved by generating quality investor leads. It is very critical for media/franchise managers to optimise the source of promotions, keeping in mind the type of education concept.
A typical education franchise has a recruitment budget of Rs 50 to 70 lakh, which usually includes promotions in print media, participation in trade shows and receiving and shortlisting the prospects. Though the budget may depend on the overall turnover as well as the expansion plans of the company, it normally varies from Rs 30 lakh to Rs 1 crore. Print media, trade shows and Internet top the list of preferred modes of promoting the franchise opportunity. Franchise referrals are catching up really fast as a source of promotion and recruitment.
When it comes to spending on various sources of promotion, most of the franchisors don't spend more than 10 per cent of their budget on direct mails, brokers, franchise referrals and PR. Most of the big ticket expenditure, which is around 30 to 60 per cent, is on tradeshows and print media. Another interesting observation is that the Internet gets an insignificant share, which is less than 10 per cent of the budget. This is in contrast with the western counterparts, who spend prime share of the expenditure on the Internet.
While comparing the efficiency of various sources of promotion, Internet seems to be providing most of the leads (50 to 75 per cent). Conventional sources of promotion like trade shows, print media and direct mails contribute 35 to 50 per cent to the total leads generated. On comparing the three, trade shows seem to contribute maximum leads after the Internet.
When it comes to the real acid test, education franchisors, on an average, have the best conversion rate of 5 to 10 per cent. Leads generated from trade shows and Internet have the highest conversion rate .Direct mails and PR lead have zero conversion rate.
Internet, franchisee referrals and print media get the best rating as a mode of promotion for lead generation. It is evident from the poll that media planning for promotion of franchise concept needs some serious deliberation, as not so typical sources of promotion like franchisee referrals and Internet are far more efficient when it comes to lead generation and conversion. However, franchise managers are still spending most of the finances on conventional sources of promotion. Again talking about franchisee referrals, which bring a decent conversion rate of 1 to 5 per cent without any investment, speaks a lot about the overall franchisee satisfaction. The poll indicates that franchisors need to explore fresh avenues of concept marketing in order to get to the right investor.
(The poll was conducted among 30 education franchisors to calibrate the effectiveness of modes of promotion used for franchise lead generation. The respondents were key decision-makers, franchise managers and media managers for education concepts.)