Understanding marketing may sometimes feel like trying to get the exact mix of ingredients for a complex recipe. But just as we have mastered our signature cookies, we're here to offer clarity on our marketing matrix. Let's explore deeper into the cogs of this machine.
1. Dissecting the 2% Marketing Fund
Let’s talk about that 2% contribution. It’s foundational, but there's much more beneath the surface. It's imperative to remember that this is the basic marketing bedrock, primarily targeted at keeping the attention of your existing customer base. But growth? That's a different game.
The 2% Reality: Imagine planting a sapling. This 2% is like the initial water and sunlight it needs. But as it grows, so does its need for more nutrients. Similarly, for explosive growth and reach, there's a need for more than just this foundational fund.
2. Deciphering the Growth Algorithm
Relying solely on the 2% means you’re looking at a slow and steady incline on your growth graph, but only if the rest of your business is managed properly. It's about playing the long game. Importantly, a balance is essential: if your returning customer rate dips below 50%, growth becomes an uphill battle.
Why 50% Returning Customers? Our business thrives on the 'come-back-for-more' principle. With our dynamic weekly menu rotations, every visit offers something fresh. The higher the return rate, the healthier the franchise's pulse.
3. Return Customers: The Real MVPs
First impressions count, but it’s the subsequent experiences that seal the deal. A positive first experience has a 20-30% chance of ensuring a repeat visit. Score three consecutive positive experiences? You’re looking at turning a visitor into a lifelong Crave ambassador. The LTV (Lifetime Value) of such a loyalist stands impressively at $250 once they've hit their third memorable visit.
Breaking Down the LTV: Every time a customer walks through your door, there's potential. Not just for a single sale, but for a series of sales that, over time, contribute significantly to your revenue.
4. The 2% In Action: Marketing Platforms
While TikTok, Facebook, and Instagram might be places of leisure for many, for us, they're our virtual billboards. Add to that the power of Google search ads, and we’re creating a net, ensuring we capture the right kind of attention. Additionally, they serve as a platform for us to engage directly in conversation with our customers where traditional marketing mediums don't.
Geo-targeting Explained: Think of this as a GPS for potential customers. Depending on where your store is, we can 'target' individuals in that vicinity with our adverts, making sure we're always on their radar. Typically this is done as a 5-10 mile radius around your physical store location depending on your territory size.
5. Branding vs. Advertising: The Touchpoint Tango
Branding is more than just a logo or a catchy slogan; it's an ongoing waltz that weaves Crave into the fabric of our customers' lives. It's not about immediate gratification; it's about staying top of mind for that moment when the craving hits.
Why the Dance?: On average, it takes 5-6 subtle nudges before a customer truly connects with a brand. It could be a shared post from a friend, a captivating ad, a memory from their last visit, or even the aroma wafting from one of our stores. Each interaction is a step in the dance, leading them closer to their next Crave indulgence.
The Role of Repetition: It's not about overwhelming; it's about gently reminding. Repetition engrains our brand into their psyche, so when they're ready for that sweet treat, Crave is the name that instinctively comes to mind.
6. CPM: The Marketing Vital Sign
Digital marketing costs are calculated based on what's referred to as a CPM, or cost to show an ad to 1,000 people. With the current landscape, the CPM lies between $10-$15. To put it simply, for every $40 from your 2% contribution (assuming an average $2,000 sales day), our weekly ads are shown to 4,000 prospective eyes.
Delving into CPM: It's like a mini-auction. We bid to showcase our brand to our audience. The more competitive the landscape, the higher the price to ensure our ads are delivered to the right audience.
7. Attribution: Understanding the Customer's Path to Crave
Knowing how our customers find us is essential for refining our marketing efforts. When it comes to in-store sales, tying our marketing efforts to sales at a 1:1 ratio is seemingly impossible without extra effort at the store level. The 'source' button on our Point of Sale (POS) system is a straightforward tool designed for this very purpose.
How the 'Source' Button Works: When processing an order, the 'source' button should be used to indicate how that customer heard about us or what influenced their decision to come in. Though it adds a $0 item to the transaction, its real value is in the data it provides.
Importance of Consistent Use: Every order, without exception, should use the 'source' button. It offers a clear picture of the channels driving traffic to our stores. Without its regular use, it becomes challenging to understand the impact of our branding and advertising efforts.
The Goal: With the data from the 'source' button, we can make better decisions about where to focus our marketing. Whether customers are coming in because of a social media post, word of mouth, or another avenue, knowing this helps us optimize our strategies.
8. Online Odyssey: Tracking Digital Footprints
When it comes to online orders, things are a bit easier. We are able to track conversions and attribution almost perfectly 1:1. When a click turns into a sale, we can pinpoint the cost of that conversion and its subsequent value. Our cost to acquire a new customer for an online order currently averages around $10.
Why This Matters: This isn't just number-crunching. It’s about understanding which online avenues yield the best results, ensuring our digital spend is always optimized.
9. Marketing's Endgame: Building Lifelong Customers
The goal isn't just a one-off sale. The real prize? Turning that one-time customer into a Crave regular. While the aim for the initial sale is a break-even, the subsequent visits (and purchases) are where the real profit lies.
The Long-Term Vision: It’s about fostering a relationship, ensuring that every new customer evolves into a brand ambassador over time.
10. Geo-targeting: Casting the Right Net
Our strategy isn't a blanket approach. It's precision-based. By drawing a 5-10 mile radius around your store, we’re not just targeting everyone; we're reaching out to those who mirror our existing customers.
Lookalike Audience Strategy: Based on the data from our existing customers, platforms like Facebook help us find new ones with similar preferences and behaviors.
11. Retargeting: The Gentle Nudge
This is our way of subtly reminding our past visitors about what they're missing. By matching our database with social media profiles, we ensure Crave is never far from their thoughts.
Why Retarget? It’s based on a simple premise. People are more likely to purchase from brands they recognize. Regular reminders keep us at the forefront of their minds.
12. Franchisee Responsibility: Your Store's Growth is in Your Hands
While our mission is to empower you with the tools, expertise, and strategies necessary for success, it's essential to understand the symbiotic nature of our relationship. As the franchisor, we pave the path and provide the roadmap, but the journey? That's yours to embark upon.
Franchisor vs. Franchisee Role: Think of us as the compass, offering direction and advice based on the broader Crave landscape. However, the actual trek, the daily grind, and growth lie squarely on your shoulders. We've built a robust foundation, but building upon it is your entrepreneurial challenge and opportunity.
Data-Driven Decisions: Each franchise territory is unique, with its distinct characteristics and customer profiles. This 'source' button helps us capture invaluable insights into what's resonating within your specific domain. Without this data, our marketing strategies become akin to shooting in the dark. It’s a collective effort; your meticulous use of this feature ensures that we are equipped to guide you better.
The Bottom Line: While we are always here, ready to assist and share our brand-level insights, the onus of growing your store and adapting to your local market nuances is on you. We've handed you the baton, but the race, the strategy, the wins, and the learning from any setbacks are your journey.
Grounding Your Marketing Expectations
Marketing, unlike the predictable science of baking, operates in a volatile and dynamic environment. Just as a perfectly crafted cookie requires the right ingredients and baking conditions, effective marketing demands both the right strategy and an environment conducive to growth.
The Reality of Returns: Consider traditional investment avenues. If you were to invest $10,000 into the stock market, a realistic expectation might be a 10-15% return in a favorable year. This percentage can vary based on countless factors, many of which are out of the investor's control. Similarly, even with a well-strategized marketing approach, there are variables we can't predict (menu rotating, market saturation, seasonality, economic conditions, etc)
Unpacking Expectations: A common misconception is that a significant investment in marketing should lead to an instant and substantial uptick in sales or engagement. While marketing is a critical tool in the arsenal, it's not a magic wand. Pumping $100 daily into advertising won't necessarily manifest $1,000 in sales overnight. Such unrealistic expectations can and will often lead to disappointment.
Marketing's Role: It's essential to understand marketing's place in the business ecosystem. Marketing serves to cast the net, drawing customers in with its allure. However, once these customers are in, their experience - the product quality, customer service, ambiance, and more - determines if they'll return or recommend. A fantastic marketing campaign coupled with a lackluster in-store experience can lead to diminishing returns.
The Journey Beyond Acquisition: Getting a customer through the door is just the beginning. Retention hinges on the entirety of their experience. Marketing can promise a symphony, but if the actual concert is off-key, the audience won't return for an encore.
Setting a Realistic Marketing Budget: If aggressive growth is the goal, then adjustments to the marketing budget are imperative. A good benchmark? Consider setting aside 10% of your projected first-year gross sales. This proactive approach helps in crafting a loyal customer base. As the years roll on, the focus can transition towards maintaining and nurturing this base rather than aggressive acquisition.
The Long-Term Vision: Marketing is a marathon, not a sprint. It's an ever-evolving field, with strategies and platforms continuously changing. Our commitment is to guide you through this landscape, ensuring clarity and direction. As Crave's footprint grows, so does our dedication to transparency and mutual success. Together, we'll ensure that while our marketing brings them in, our collective efforts will make them Crave loyalists.
On the source button, do you do anything with the quantity part?