Revenue attribution is one of the most important KPIs a board member can review. If your CMO is not currently reporting on revenue attribution, it’s imperative that they start immediately. Download our SBI Magazine Special Issue: Revenue Attribution.
As marketers, we spend countless hours on understanding our buyers and their journey toward making a purchase. Along their way, we meticulously identify the actions they take, the questions they ask, and the content they read.
At every step we anticipate buyer needs, serving up the best content we can produce in the format they prefer and through the channel they want. After multiple revisions and a long series of A/B testing, we finally get it. A targeted buyer enters our funnel, consumes our content, opens our emails, enters a sales cycle, and converts to a customer. All that hard work has paid off.
But wait: I just ran multiple campaigns, produced countless pieces of content, introduced the buyer to a business development rep, invited them to two webinars, and passed them to a sales rep for a demo. Who gets credit? That determination is one of the biggest challenges for today’s marketing leaders: creating the best revenue attribution model for their company.
Mapping the Path to Purchase
In reality, the path to purchase is not linear. In many cases it happens over a series of trigger events that can take months to understand and sometimes years to get in front of. “Our buyers enter and exit at least three campaigns and consume over 15 pieces of content before we consider them sales-ready,” says the CMO at a Fortune 500 supply-chain software company based in the San Francisco Bay Area. “We are always working to map out the buyer’s journey. However, with so many touchpoints, we still struggle to determine exactly what prompted the buyer to engage and agree to meet with our sales team.”
Over the years I have seen many marketing leaders default to a single-touch attribution model, essentially awarding 100 percent of the revenue credit to a single marketing touchpoint. In most cases it is the first or last touch. While single-touch attribution is very straightforward, this method doesn’t account for all the content and interactions that take place in between.
Buyers consume multiple pieces of content, attend events, respond to emails, view targeted advertisements, and more. Can we really be so bold as to say that just one of those touchpoints was responsible? If so, should we have spent budget and resources on all the other tactics? The answer is clearly no.
Multi-touch attribution tracks a number of different touchpoints throughout the buyer’s journey and marketing funnel, and assigns a weighted revenue credit to each. This method enables us to realize credit for all the interactions, not just one.
Best-in-class marketers implement multi-touch revenue attribution in different ways. Read on to determine whether some of these emerging best practices can be put to good use at your organization.
Determining the Right Revenue Attribution Model
Like most marketing solutions, a one-size-fits-all revenue attribution model does not exist. The determining factor is the length and complexity of the buying process. Short, uncomplicated sales cycles call for a simplified model; long, complex sales cycles need a more advanced approach.
- Short Sales Cycle:
- Medium Sales Cycle:
- Long Sales Cycle:
Short Sales Cycle: Linear Attribution
“Why muddy the waters?” says the vice president of marketing at one leading software-as-a-service (SaaS) solution provider based in San Jose, California. “We know that our solution is a must-have in most B2B companies. We have excellent brand awareness and a cost-effective solution that can be sold in less than 60 days.” As a result, the linear attribution model is the best fit.
Equal credit. The linear attribution model gives equal credit to each individual touchpoint within the buyer’s journey. For example, if your buyer experiences four touchpoints, each one would be given 25 percent of the revenue credit. “We are reaching many different buyers who enter the funnel in multiple ways,” says the SaaS marketing VP. “However, once we capture a lead we know the story to tell. That typically takes four interactions with our content.”
For this reason, the company assigns the same value to each interaction, knowing they are all important to convert their leads to customers. The cadence of the touchpoints likely changes from buyer to buyer, but the percentage of revenue attached to each is very similar. The key here is to determine which touchpoints will assist the buyer and then plot them accordingly. With a short, simple sales cycle, you can be agile in your approach to distributing the touchpoints and assigning credit to each.
Medium Sales Cycle: U-Shaped Attribution
With a more traditional sales cycle of 60–120 days, it is important to weight the touchpoints differently. For instance, it may be more difficult to bring prospects through the door and then convert them than it is to advance prospects through the funnel. If this resembles your situation, the U-shaped attribution model is right for you.
Front- and back-loaded credit. The U-shaped attribution model attributes high revenue percentages to the first and last touch, with a small amount of attribution percentages allocated to the touches in between. “We have a very difficult time getting prospects to engage with our sales reps. They are highly technical and don’t consume content or respond to campaigns like a traditional line-of-business customer,” says a director of demand generation at one software security business based in Chicago. “However, once we capture their attention, it is easy to get them to view a demo and read our long-form content.”
Many companies that lack brand awareness as a preferred solution within their space struggle with this type of situation. Equally difficult is getting a timid buyer to convert to a sales-ready lead. Both highly technical and timid buyers are often reluctant to disclose information about a specific project, budget, or time line. So when you are able to attract and then convert them, you need to emphasize the percentage of revenue attribution at the front and back end. For example, in the U-shaped attribution model, the first and last touch may each receive 40 percent of attributable revenue while the touchpoints in between would receive a nominal amount.
The U-shaped model allows you to prioritize your efforts on the touchpoints that matter the most: capture and convert. As a result, you should spend your resources developing and executing on the best way to get the customer’s attention, and then turning that attention to engagement with your sales force. You will need to research what matters most at the beginning and end of the lead life cycle, and distribute credit appropriately.
Long Sales Cycle: Time-Decay Attribution
This is often the most complex multi-touch attribution model to develop. Your buyers may be engaged for months before they show interest in advancing to the next buying stage. Marketing tactics in a long sales cycle often focus on satisfying the information needs of your content subscribers rather than developing leads off a single piece of content. An actively engaged subscriber may consume a large amount of content over the course of many months and then react with increased interest or fall out of the buyer’s journey altogether. For this reason, the time-decay attribution model is appropriate.
Sliding-scale credit. In the time- decay model, buyers advance through the journey very slowly, while incrementally increasing their purchase intent.
Early content consumption is attributable in this scenario, but the weighting is very low compared to attribution given to the touchpoint applied at the point of conversion. A social media post may be enough to get the buyer to subscribe to your content, but the client reference is reserved for buyers who are in the late stages of their purchase decision. For example, the social media post may receive 2 percent of the revenue attribution while the client reference may receive 30 percent, with the revenue attribution percentage for each touchpoint in between rising incrementally.
“It can take us three quarters to get a lead to convert from our touchpoints. In many cases we had forgotten the initial touchpoint,” says the vice president of marketing at one of the leading ERP vendors in the world. “We knew that first touchpoint was important. However, it was not nearly as important as the touchpoint that got the buyer to convert.”
The illustration groups typical touchpoints into three buckets, representing top-of-funnel awareness, middle-of-funnel engagement, and bottom-of-funnel conversion. In the time-decay model, multiple pieces of content and touchpoints reside in each bucket and can be used over the course of multiple campaigns directed at multiple buyers. For that reason, it is important to use a sliding scale to assign revenue attribution.
Allocating Resources That Make the Most Impact
Revenue attribution is crucial for making the right decisions about budget allocations, to focus your marketing team’s precious time and limited resources on the highest- impact touchpoints. Determining the right attribution model provides visibility into marketing’s impact along the buyer’s journey.
Before selecting a revenue attribution model, always be sure to take your buyer preferences into account along with the length and complexity of your sales cycle. Of course, more complex attribution models are more difficult to implement. However, the benefit gained from knowing what to produce and when to engage the buyer with each piece will pay off immensely.
Would you like a hand with revenue attribution to make marketing more scientific? Plan a workshop with the SBI team of marketing experts in Dallas at The Studio, SBI’s multimillion-dollar, one-of-a-kind, state-of-the art, executive briefing center. The immersive sessions accelerate your adoption of revenue attribution and put you on the right path with a solution and implementation plan.