2017 AFDR Highlights: Measuring Cost Per Lead & Cost Per Sale

This is the sixth in a series of highlights from the 2017 Annual Franchise Development Report (AFDR). The 2017 AFDR, unveiled in late September at the Franchise Leadership & Development Conference, is based on responses from 167 franchisors representing 60,989 units (51,789 franchised and 9,200 company-owned).

Participants in the survey consisted of franchisors that completed an extensive online questionnaire. Responses were aggregated and analyzed to produce a detailed look into the recruitment and development practices, budgets, and strategies of a wide cross-section of franchisors. The data and accompanying commentary and analysis provide the basis of the 2017 AFDR. (Ordering information is below.)

This week: Measuring cost per lead and cost per sale

Six in 10 respondents said they tracked cost per lead (61 percent, compared with 60 percent last year) and cost per sale (57 percent, compared with 58 percent last year). This means that about four in 10 respondents still do not track cost per lead and cost per sale – a number that continues to perplex franchise recruitment experts, who continue to shake their heads in bafflement over how any professional sales team can set a budget, spend the money, and not measure the effectiveness of that effort.

On a more positive note, the number of brands tracking cost per lead and cost per sale has improved from several years ago (52 percent in 2014, about the same in 2013, and 65 percent in 2012). Why 100 percent of brands don’t track these critical metrics remains a mystery.

As for costs, the average cost per lead reported in this year’s survey was $109, up from $97 last year, while the average cost per sale of $7,558 also was up, from $6,300 last year.

Measuring Costs

Next week: Sales closing ratios, 2011–2016.

Ordering Information
The complete 2017 AFDR, with analysis and benchmarks, is available for $350. For ordering information, call Sharon Wilkinson at 800-289-4232 x202, email sales@franchiseupdatemedia.com, or click here.