Local Commerce Monitor, Wave 16 - Franchisees of National Companies

LCM Wave 16 Spotlight:Franchisees of National

Companies

April 2013

2BIA/Kelsey Local Commerce Monitor™ (LCM), Wave 16, Q3 2012Proprietary and Confidential. Copyright © 2013 BIA/Kelsey. All Rights Reserved.

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Executive Overview

Franchisees have aggressive plans for media spending, including for digital/online media over the next 12 months.

They’re sophisticated media users. They see the highest ROI from mobile, social and video advertising.

Franchisees spend about 2.5 times as much on average for their online presence as SMBs in the full LCM sample. They have a diversified and robust online footprint.

About two-thirds of franchisees have a presence on Facebook. They value customer reviews and opinions more than other SMBs. They typically monitor this activity through digital product bundles rather than stand-alone solutions.

Franchisees are heavily engaged with their customers, with 87% reporting they frequently track sources of leads and 75% using some sort of CRM system. They give the highest quality ratings to in-person and website-form leads. More than 70% offer a customer loyalty program.

Franchisees use agencies/digital agencies at almost twice the level as the full LCM sample (37% vs. 20%), underscoring the importance of channel sell-through efforts.


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Selling to Franchisees

They Like Personal Contact and Education

Franchisees like face-to-face contact with their sales representatives – 45% rate an in-person visit as “extremely important”. In a self-service environment, they value tutorials, performance guarantees and discounts (on media purchases).

They Are Media Savvy

Franchisees are strong in digital advertising, while continuing to use traditional media. They see mobile and social media as providing high ROIs. They know what works – nearly all track lead sources and three-quarters use some type of CRM.

They Already Have a Strong Digital Presence

Given their robust online footprint and high level of spending for online presence, franchisees are good customers for a variety of online services. Given their general inclination towards data and analysis, there are opportunities to include tracking, analytics and online management services in the mix.

They Want Help in Engaging Customers

Franchisees are trying to engage their customers in many ways (using social and mobile media, tracking customer comments, offering loyalty programs, etc.). Franchisees are likely to be receptive to solutions that improve customer engagement, possibly by connecting various programs and platforms.


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Franchisees Spend More on Media in General and on Digital/Online

Franchisees are more aggressive advertisers than average SMBs, with Net Increasers on media spending at 51.6%. Given these intentions, they’re good candidates to increase their media spend and make multi-product buys.

Their ad spend is higher than for average SMBs. And they appear to understand the value of advertising – with the great majority tracking lead sources and using some type of CRM system.

Franchisees’ faster than average adoption of digital products makes them good prospects for a wide array of digital/online media.

A larger percentage of their ad budget (32% vs. 25% for the full LCM sample) goes to digital/online media. Their use of mobile and social media is particularly high.

Franchisees also use significant amounts of traditional media. About one-third use radio, magazines, TV, outdoor and direct mail. Nearly one-half use newspapers.

Nearly a third of those that currently use print Yellow Pages (31%) expect to “significantly” increase their spending next year.


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Franchisees Have Aggressive Spending Intentions

Increase Decrease Maintain Not sure0%

10%

20%

30%

40%

50%

60%54.9%

3.3%

38.5%

3.3%

Q104 Ad Spend Intentions in the Next 12 Months by Franchisee/LicenseeSample Size = 91

Over half of franchisees plan to increase spending on advertising and promotion in the next 12 months. This compares to net increasers of 39.0% for the full LCM sample.

Net Increasers:51.6%

Source: BIA/Kelsey's LCM Wave 16, Q3/2012 (and prior waves, if relevant). Methodology: Online panels.Full LCM sample is 600. Individual findings may not be statistically significant.


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Franchisees Spend More for Digital/Online

Last 12 Months Next 12 Months0%

10%

20%

30%

40%

32.4%34.3%

Q301 Percentage of Ad Budget for Digital/Online MediaSample Size = 75

Franchisees spend roughly one-third of their total media budget for digital/online media, higher than the roughly 25% of budget for digital/online spent by the full LCM sample.


7BIA/Kelsey Local Commerce Monitor™ (LCM), Wave 17, Q3 2013

Proprietary and Confidential. Copyright © 2013 BIA/Kelsey. All Rights Reserved.

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Faceb

ook

Page

Video

Web

site

Email

Mkt

g.

Faceb

ook

Ad

Online

Dea

ls

Mob

ile A

pps

Text M

sg.

IYP

Spec

Online

Dir.

Video

You T

ube

Twitter

Online

Cou

pons

Pay p

er C

lick

Online

Ban

ner/D

isplay

Mob

ile B

anne

r

Mob

ile S

earc

h

Mob

ile D

eals

0%

20%

40%

60%

80%

65%

43%39%

32%30% 30%

28% 26% 26%22% 22%

20% 19% 18% 18% 17% 15%

S11- Advertising Media Used for Advertising/Promotion Sample Size = 91

Franchisees Use a Wide Variety of Digital/Online Media

Use of digital/online products, is high overall, underscoring a robust online footprint. The use of numerous mobile and social media is particularly notable.

*In this metric, use is irrespective of spending level.Source: BIA/Kelsey's LCM Wave 16, Q3/2012 (and prior waves, if relevant). Methodology: Online panels.Full LCM sample is 600. Individual findings may not be statistically significant.

Percent of Franchisee Respondents Using Given Media*



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Newsp

aper

sRad

io

Mag

azine

s TV

Incu

mb.

YP

Outdo

or

Direct

Mail

Inde

p. Y

P

Cable

Print C

oupo

ns/B

ooks

Dir. A

ssist

0%

20%

40%

60%

46%

33% 32% 32% 31% 31% 30%26% 26%

24%

12%

S11- Advertising Media Used for Advertising/Promotion Sample Size = 91

Franchisees Continue to Use Traditional Media

Traditional media remains a key element of the franchisee’s advertising mix.

*In this metric, use is irrespective of spending level.Source: BIA/Kelsey's LCM Wave 16, Q3/2012 (and prior waves, if relevant). Methodology: Online panels.Full LCM sample is 600. Individual findings may not be statistically significant.

Percent of Franchisee Respondents Using Given Media*



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Franchisees Rate ROIs Highest for Mobile, Video and Social Media

Mobile Deals

Mobile Banner

Mobile Apps

Facebook Ad

Video You Tube

Other Social

Spec Online Dir.

Pay per Click

Email0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

28.6%

43.8% 44.4%

31.0%25.0% 28.6%

20.8%11.8% 11.4%

50.0%

31.2% 29.6%

41.4%45.0% 35.7%

37.5%

41.2%31.4%

Excellent 10-19x Spend Extraordinary Over 20x Spend

Q107

Franchisees give the highest ROIs to specific media in mobile, video, and social media clusters (“top two box” ratings).


78.6%

42.8%

75.0%74.0% 72.4%

70.0%64.3%

58.3%

53.0%


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Franchisees Spend Heavily for Online Presence

Franchisees Full LCM Sample$0

$10,000

$20,000

$30,000

$40,000

$50,000

$41,376

$15,523

Q307Sample Size = 75


Franchisees spend about 2.5 times as much on average for their online presence as the full LCM sample. (Online presence includes: website; landing pages; social media presence; local pages on portals like Google, Yahoo, etc.)



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Franchisee Online Presence Continues to Grow

Their online presence is also more localized than average. Other attributes include: Higher use of paid search and listings. Preference for DIFM over DIY when it comes to the upkeep and management of

their digital presence: More than 80% pay outsiders to update their properties. Franchisees that use videos (including YouTube) hire a professional and prefer

custom overusing stock video. Use of product content to build awareness and SEO is aggressive: more than just

on page optimization. SEO is done through a mix of sources: Listings, blogs, like buttons, reviews and

tweets are ranked as the top activities.

Current online properties:

53% Google Plus Page*48% Landing Page47% Yahoo Local39% Mobile Website**

Online properties likely to add in next 12 months:31% Landing Page 31% Other Social Sites30% Facebook Page30% LinkedIn

*Also included Google Places Pages**Defined as “version of website designed specifically to be displayed on a smartphone or other mobile device.



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Online Properties Comprise a Large Online Footprint

Web

site

Faceb

ook

Page

Goo

gle P

laces

3rd

Party

Con

tent

Video

on W

ebsit

e

Land

ing P

age

Yahoo

Loc

al

Custo

mer

Rat

ing/R

eview

s

Video

on O

ther

Site

Linke

dIn

Mob

ile E

nhan

ced

Listin

g

Oth

er S

ocial

Net

work

Mob

ile W

ebsit

e0%

20%

40%

60%

80%

100%

4.4% 3.3% 5.5% 4.4% 4.4% 3.3% 7.7% 5.5% 2.2%7.7% 7.7% 4.4% 8.8%

16.5%13.2%

19.8%15.4% 19.8% 17.6%

18.7% 24.2% 27.5%22.0% 26.4%

26.4%27.5%

22.0% 29.7%22.0%

27.5%25.3% 30.8%

26.4% 24.2% 25.3% 29.7% 25.3% 30.8%25.3%

57.1% 53.8% 52.7% 52.7% 50.5% 48.4% 47.3% 46.2% 45.1% 40.7% 40.7% 38.5% 38.5%

Not sure Don't have, and not likely add next 12 months Don't have, likely to add next 12 months Currently have

Q303A

Sample Size = 91




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Ask Customers

Clicks or Email

Promotions or Direct Mail

Call Tracking

Other Tracking

0% 10% 20% 30% 40% 50% 60%

57.8%

44.6%

38.6%

33.7%

2.4%


Franchisees Are More Focused on Customer Tracking

Percentages total over 100% because multiple responses were permitted. Source: BIA/Kelsey's LCM Wave 16, Q3/2012 (and prior waves, if relevant). Methodology: Online panels.Full LCM sample is 600. Individual findings may not be statistically significant.

Franchisees are more rigorous than non-franchisees about tracking sources of customer leads. This finding is fully consistent with other findings about franchisees use of data and analytics.

Compared to16.0% for

full LCM

Compared to 32.0% for full

LCM

Compared to 25.0% for full

LCM



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Tweets

Blogs

Pay per Call

Claim Listing on Manta or Merchant Circle

Tries to Change Unfavorable Comments

Replies to Unfavorable Comments

Email Marketing

Like Button (or Similar)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

18.7%

28.6%

26.4%

24.2%

31.9%

14.3%

25.3%

23.1%

45.1%

37.4%

40.7%

48.4%

40.7%

60.4%

53.8%

58.2%

Don't Do But Likely To Do In Next 12 MonthsCurrently Do

Q303BSample Size = 91

Franchisees Use Diverse Online Marketing Activities

Franchisees report using many online marketing activities. For example, 60.4% report they already respond to unfavorable online comments, with another 14.3% planning to do so within the next 12 months.


81.3%

63.8%

66.0%

67.1%

72.6%

72.6%

74.7%

79.1%



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Franchisees Have a High Level of Customer Engagement via Social Media

More than 65% have a Facebook page and 32% use Facebook ads.

Three-quarters use their Facebook page as an acquisition tool (vs. just 42% of the full LCM sample).

Customer reviews and opinions are of high importance, 78% monitor the comments online and 60% respond. They also post reviews on multiple properties.

Of those that monitor customer comments, about one-half use a monitoring service that’s part of a bundle of paid online services (reporting dashboard).

Facebook, Google and other social sites rank highest in importance on monitoring reviews (of online sites).

<$24

$25-$49

$50-$99

$100-$199

>$200

Not Sure

0% 5% 10% 15% 20% 25%

11.3%

19.7%

23.9%

21.1%

16.9%

7.0%

Spend on Monitoring Services ($/Mo.)

Vendors Used For Reviews


N=71



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Google Facebook Other Social

Other Sites Yelp Twitter Blog Citysearch0%

20%

40%

60%

80%

100%

7.7% 3.3% 7.7% 8.8% 9.9% 11.0% 9.9% 9.9%

7.7%9.9%

12.1% 8.8% 9.9% 8.8% 11.0% 9.9%

17.6% 19.8%

19.8%15.4% 13.2%

19.8% 17.6% 22.0%

23.1% 27.5%22.0%

28.6% 29.7%23.1% 25.3%

26.4%

44.0% 39.6% 38.5% 38.5% 37.4% 37.4% 36.3% 31.9%

Not at all important Not too important Somewhat important Very important Extremely important

Q312 Sample Size = 91

Franchisees Give High Importance to Websites with Customer Comments

They take customer comments seriously, with about two-thirds saying customer opinions on Google, Facebook and Yelp are “Extremely” or “Very” important.




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Bundled Service

Free service/DIY

Paid Standalone Service

Not sure

0% 10% 20% 30% 40% 50% 60%

51.9%

28.4%

16.0%

3.7%

Q324AA

Half of Franchisees Use Reputation Monitoring That’s Part of a Bundle

About one-half of franchisees that monitor customer comments report they use a monitoring service that’s part of a larger bundle of paid online services.




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Franchisees are Mobile-Oriented

More than one half of franchisees are currently using some form of mobile advertising/marketing, which is over indexed compared to the full LCM sample.

Many more are using text messaging (22% vs. just 13% for the full LCM sample).

The same percentage are using Twitter (22% for both the franchisee respondents and the full LCM sample).

A full 62.6% report using mobile phones for payments, vs. 27.5% for the full LCM sample).

Haven't heard of it; 12.1%

Heard of it; Don't know

much; 16.3%

Learned about it; Don't use;

15.8%

Currently Us-ing; 54.7%

Tried and Stopped ; 1.1%

Do you use mobile advertising?


Q600



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Franchisees Like Loyalty Programs and Discount Deals

Nearly all franchisees report they track lead sources (either frequently or occasionally).

75% use a formal tracking system yet less than half use vendor data to analyze leads.

A third ran between four and nine discount deals (or “daily deals) in the last six months.

Nearly two thirds report they are “extremely likely” or “very likely” to run a discount deal in the next six months.

Currently have

Don't have, but likely to get

Don't have, and not likely

Not sure

0% 10% 20% 30% 40% 50% 60% 70% 80%

70.3%

16.5%

12.1%

1.1% Do you have a loyalty program?




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Franchisees Rate In-Person and Selected Online Leads as High Quality

0%

20%

40%

60%

80%

100%

34.1% 37.4% 40.7%34.1% 28.6% 30.8% 28.6% 30.8% 27.5% 31.9%

23.1% 22.0%

38.5% 35.2% 26.4%31.9%

36.3% 33.0% 35.2% 31.9%31.9% 25.3%

30.8% 30.8%

72.6%67.1% 66.0% 64.9% 63.8% 63.8% 62.7% 59.4% 57.2%

53.9% 52.8%

72.6%


“In Person” leads are usually ranked as the highest quality by SMBs. In comparing online lead sources to “in person” leads, franchisees rank leads from their websites (e.g. via a contact form) just as highly. Telephone calls and several online lead sources are also ranked highly (“top two box” ratings).




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Appendix: Methodology

LCM Wave 16 Survey

Overall Sample Size

Number of Franchisees/

Minimum Annual Spend*

Average Annual Spend*

Core 300 20 No Minimum ~$3,000

Plus Spenders 300 71 $25,000 ~$82,600

*Minimum annual spend on advertising/promotion media (i.e. not including spend on website or other permanent web assets). Outliers excluded in calculating averages. Outliers defined as:

Core: Spending more than $40,000 annually Plus Spenders: Spending over $500,000 annually

This document provides the results from our Local Commerce Monitor (LCM) Wave 16 Survey, conducted in Q3/2012. All the data presented is for respondents that replied “Yes” to the firmographic question below. This was a total of 91 respondents, or 15.2% of the full LCM sample of 600.

• “Is your specific business or company set up as a franchisee or licensee of a national company?”

The data in this document is drawn from a combination of the LCM Core and Plus Spenders samples. Sample characteristics:

Results based on 300 responses have a confidence interval of +/- 5.7% at the 95% confidence level. The confidence interval is larger for those questions that were asked of just a subset of the full sample.

Copyright © 2013 BIA/Kelsey. All Rights Reserved.

This published material is for internal client use only. It may not be duplicated or distributed in any manner not permitted by contract. Any unauthorized distribution could result in termination of the client relationship, fines and other civil or criminal penalties under federal law.

BIA/Kelsey disclaims all warranties regarding the accuracy of the information herein and similarly disclaims any liability for direct, indirect or consequential damages that may result from the use or interpretation of this information.

Questions and Comments:Stephen MarshallBIA/KelseyResearch [email protected]

Local Commerce Monitor, Wave 16 - Franchisees of National Companies

Marketing

Transcript of Local Commerce Monitor, Wave 16 - Franchisees of National Companies