FRANCHISE DEVELOPMENT DURING COVID-19, PART 2: Lead Generation Numbers that Matter

Written By JUSTIN MINK

In part 1 of this three-part series examining the state of franchise development in the face of Covid-19, we took a look at the big-picture market conditions. Happily enough, we found that 1) candidates are bullish about the ownership opportunity, 2) there is now (for unfortunate reasons) a larger pool of qualified candidates than ever, and 3) this audience is actively seeking out new career opportunities online.

Today, we take our exploration several layers deeper and dig into the real-life performance data. Scorpion’s franchise development team explored more than 50 active client franchise development websites and digital lead generation campaigns over the first half of March, then stacked those results against marketing performance from the back half of the month. Monday, March 16, arguably marks the first business day that the pandemic was indisputably spreading across the United States, so the month offers a clean symmetry for a “before/after” comparison. Let’s put the data under the microscope.

Starting on or around March 15, many brands scaled back or completely shut off all paid advertising campaigns. (Your brand may have been one of them!) As such, we have two major variables to study: 1) the impact of Covid-19 on target audience behavior, and 2) the relative impact of maintaining, reducing, or completely turning off all paid budgets.

ORGANIC TRAFFIC SPENDING

During this time frame (and as always), we continued to manage the franchise development websites for these brands, and tracked both paid and organic traffic and lead generation. Amid a mountain of data points, let’s shine a spotlight on numbers that really matter. Comparing March 1–15 against March 16–31, we first examined organic traffic. (If you’re wondering what organic (or “free”) traffic has to do with paid advertising, bear with me for a minute.)

• Brands spending normally on paid advertising at pre-Covid levels saw a 6.52% decrease in organic website traffic.

• Brands spending at reduced levels on paid advertising saw a 16.56% decrease in organic website traffic.

• Brands that stopped spending on paid advertising saw a 37.06% decrease in organic website traffic.

Key takeaway: With overall Internet usage up, time spent online is primarily being spent on things like messaging, Zoom meetings (along with getting Zoombombed!), and social media. However, brands that are investing in paid advertising are holding steady organically. Why? While paid advertising does not directly affect organic results, third-party studies (and years of accrued proprietary data) clearly demonstrate that the awareness created by paid advertising correlates with increased organic traffic. People who see ads on Facebook and Google while web browsing, watching YouTube, sending emails, etc., organically enter the website later when they are in the right frame of mind for researching franchise opportunities.

PAID AD IMPRESSIONS

Now let’s look at the impact of Covid-19 on paid ad impressions (the number of times ads appear on Google, Facebook, websites, etc.).

• Brands that have continued their ad budgets at the same rate have experienced a 28.29% increase in ad impressions. (Of course brands that reduced or stopped spending saw reductions, so those data sets are not relevant.)

Key takeaway: Ad inventory is up, with more people spending their time online than ever before. Competition for ad inventory is down, with brands scaling back ad campaigns. Thus, inventory is more available and less expensive, helping budgets stretch further.

PAID ADS AND LEAD GENERATION

Last, we look at the bottom line: Covid’s impact on paid advertising lead generation.

• For brands still spending on paid advertising at pre-Covid levels, overall leads are down about 15% thanks to the drop in organic results, but paid leads are up 3.69%.

Key takeaway #1: Across the board, organic leads and entrances are taking a material hit (again, Scorpion clients have seen between a 6.5% to 37% reduction in organic traffic depending on continued or adjusted paid spend levels). Paid advertising is driving more visibility now and helping to counteract a reduction of organic leads. Continued paid advertising at pre-Covid levels is proving to keep overall lead volume steady for those brands that haven’t shied away.

Key takeaway #2: For brands still spending, why are paid impressions up more than 28%, but paid lead volume up only 3.7%? The Franchise Insights buyer sentiment study suggests that while interest remains high, some buyers may be holding off on active discussions with franchisors. Consistent lead volume plus increased awareness and engagement now (even if you aren’t aware this engagement is occurring) can potentially give franchise brands that remain in the fight a massive competitive advantage for new partner acquisition when economic activity resumes.

CONCLUSION

This is a time full of uncertainty and angst, naturally causing us to pull back and default to safe positions. But, armed with the demonstrable data, hard-won lessons learned from past recessions, and a fantastic value proposition, bold franchise brands can seize this moment and position their brands to win in the post-Covid world.

• P.S. – Two related articles that might be of interest:

• When a Recession Comes, Don't Stop Advertising (Forbes)

• The Best Marketers Will Be Upping, Not Cutting, Their Budgets (MarketingWeek)

Justin Mink is Senior Vice President of Sales at Scorpion. Contact him at 214-459-0274 or justin.mink@scorpion.co.