When was the last time you tried to figure out how much revenue you are producing with each of your marketing programs? If you are like most of us, you are busy with the day-to-day activities required to keep your lead-gen engine running. This doesn’t leave you much time to think about marketing attribution models. This blog post defines some traditional marketing attribution models and proposes a new score-based approach that you can start using today.
Marketing Attribution – The method for determining what marketing programs are driving revenue.
Before a customer decides to buy your product, they interact with your marketing content. They might visit your webpage, attend a webinar, or download a white paper. A marketing attribution model is a way to measure how much each of those activities influenced a buyer’s purchasing decision. These models are helpful because they give you a good way to do a cost-benefit analysis on each of your marketing programs. More importantly, they set the foundation for you to determine the optimal mix of marketing programs to run in the future.
To get started you need to connect each of your marketing leads to won sales opportunities (revenue). Many people are doing this analysis by hand and tracking it in a spreadsheet. This can be a challenging process but has been made easier with technology. Fortunately, there are software solutions that integrate your marketing automation and customer relationship management platforms. These solutions are helpful in connecting a marketing lead to a won opportunity.
Once you make this connection, you need to spread the revenue dollars across the marketing programs that interacted with that lead. Here are some traditional approaches that people use today:
All the revenue credit is given to the marketing activity that first brought a lead into your marketing world. With marketing automation platforms you are able to capture this activity on anonymous leads that will later identify themselves. This is sometimes referred to as a lead’s original source.
All of the revenue credit is given to marketing activity that immediately preceded the handoff from marketing to sales. An example of this is when a lead fills out a form to download a gated whitepaper and that pushes their lead score above the threshold to be passed to sales. In this case, the revenue that results from this opportunity would all be attributed to the whitepaper.
Multi-Touch Attribution (Linear):
The revenue credit is spread evenly across all marketing programs that were run on that lead. This is an improvement over First-Touch and Last-Touch, but still does not accurately account for how much influence each marketing program had on a buyer’s purchasing decision.
The traditional approaches to marketing attribution modeling certainly have their drawbacks. If you try to use them to allocate your program budget for next year you might be led astray. We propose a different approach, which is based on your current lead scoring model in your marketing automation platform.
You and your team have already spent a significant amount of time identifying criteria for scoring a lead’s demographics and behavior. Specifically, you have made the decision to score some behaviors higher than others. This implies that some activities have more influence on a buyer’s purchasing decision than others. For example, you might score an email click-through 5 points, a whitepaper download 15 points, and attending a Webinar 30 points. You can use this to build a Score-Based Attribution model.
This is a multi-touch attribution model where the revenue is proportionally credited to each marketing program based on how much influence it had on the customer’s purchasing decision. Specifically, it uses the lead score increase that resulted from the lead’s interaction with each program.
Attribution = points awarded for interacting with program / total lead score * revenue generated from lead
Using the scoring example above, let’s assume a lead interacted with two programs. As part of Program A, the lead receives an email and clicked through (5 points) to download a whitepaper (15 points). Later, they attend a webinar (30 points) as part of Program B. Since the lead reached a score of 50, it is enough for the lead to be passed to sales. The lead goes on to become an opportunity and wins for $10,000. The Score-Based Attribution model would allocate $4,000 to Program A [((5 + 15) / 50) * $10,000] and $6,000 to Program B [(30 / 50) * $10,000].
The Score-Based Attribution model is based on a lead scoring system that you and your team have already validated. It is a great way to quantify how each of your marketing programs contributes to a buyer’s purchasing decision. If you would like to learn more about how ORM Technologies can help you with marketing attribution, or lead scoring, email us at email@example.com.