How to Make the Best Out of Marketing Budget for Franchise Business in 2023?

Economic uncertainty driven by inflation has squeezed profits for many small business owners. With a possible global recession and a shrinking economy, it can be tricky for franchise businesses to ride the waves of coming uncertainties. As more consumers cut back on spending, business owners must brace for a possible decline in overall revenue and profitability.

One way businesses can hold steady through a downturn is to rethink, reimagine, and redefine the marketing plan so that every dollar spent drives maximum ROI. If you own a franchise business and wonder how to make the most of your marketing budget, this blog is for you.

Ways to optimize marketing dollars to drive maximum ROI

According to a report by the International Franchise Association (IFA), the franchise industry was expected to grow by 5.8% in 2023, with an estimated economic output of $477 billion. That means more competition and a crowded industry, so businesses need to get creative with their marketing to cut through the noise. Budgets are limited, and you need to plan smartly to make every dollar worthwhile.

One of the most effective ways to do this is through a well-planned marketing budget that helps franchise businesses reach their target audience, increase brand awareness, and generate more leads.

1. Set clear marketing goals

The first step to making the best of your marketing budget is to review the overall strategy of your business. Evaluate the goals you are trying to achieve, whether the primary goal is to increase brand awareness, generate more leads, or boost sales. Doing so helps you determine which marketing methods will work best for your franchise and lets you measure how effective your campaigns are. Goals should be SMART: specific, measurable, attainable, realistic, and timely.

For example, if you run a restaurant franchise, a good goal might be to boost sales by 20% over the next six months. This goal is specific, measurable, and includes a clear period, making it easier to determine the performance and success of your marketing efforts.

2. Invest in the right marketing strategies

Businesses that stop advertising for an extended stretch often see their brand awareness fade. In a world where most consumers spend more time online, promoting a business and building brand awareness no longer has to be hard. With digital marketing strategies such as paid advertising, content marketing, social media campaigns, and email marketing, you can reach your target audience quickly and convert them into paying customers.

In fact, according to a survey conducted by the Wall Street Journal, the average CMO allocates more than 75% of the marketing budget to digital marketing activities. Investing in digital strategies helps franchise businesses generate the highest revenue and get the most out of their marketing spend.

3. Measure and optimize your campaigns

Measuring the effectiveness of your campaigns is essential to understand how your efforts affect the bottom line. Tracking key performance metrics like email open rates, website traffic, and conversion rates helps you identify which campaigns are driving results and which ones need work. Using this data, you can refine your marketing plan over time, revisit strategies that need more spending, and make informed decisions to improve your return on investment and profitability.

4. Focus on after-sales marketing

Acquiring a new customer is generally far more expensive than retaining an existing one, and improving customer retention can meaningfully lift profits. As a franchise business owner, a primary focus should be nurturing relationships with customers who have already purchased from you. To do this, allocate part of your marketing budget to after-sales activities like email marketing, customer service, and newsletters.

Doing so helps you retain customers for longer and turns loyal customers into brand ambassadors who market your business to their community. This does not mean you stop investing in acquisition. Design a marketing strategy that focuses on both acquiring new customers and retaining old ones, and build a strong brand presence for your franchise in the market.

5. Follow the 70/20/10 rule

The 70/20/10 rule says that whether you own a small or big franchise business, you should split your budget across proven, growth, and experimental work.

• 70% of your budget should go to strategies that already work well for your business.
• 20% of your budget should go to marketing strategies that contribute to the growth of your business.
• The remaining 10% of your budget should go to activities and experiments to test whether they work for your business.

Using this rule, you can drive positive ROI for your business while still trying experiments that can lead to future growth.

To sum up

The year 2023 was expected to be full of uncertainties. As a franchise business owner, you can use effective marketing strategies to soften the impact of a potential economic downturn. Whether it is a recession or a pandemic, a strong business plan with a well-devised budget helps you work through the obstacles in front of you.

Define your business goals, use the right marketing strategies to achieve them, build strong relationships with your customers to retain them, track what is working and what is not, and make informed decisions. That should be the goal of every franchise business: make the most of its marketing budget so the business can thrive in a competitive marketplace.