Have you ever tried to explain why you need a larger marketing budget? If so, I am sure you confidently walked into the CFO’s office with a strategy to spend the additional money and clearly articulated the incremental return on sales. After all, marketing is a revenue generating function right? Of course it is, but sometimes we have trouble demonstrating it. The most important thing you can do to justify your marketing budget is connect your programs to the sale opportunities they help win – Revenue Attribution.
Revenue attribution is the process of determining which marketing programs drive revenue.
We connect marketing programs to won opportunities by recording how customers interact with our business prior to making a purchase. This process is enabled by marketing automation platforms such as Marketo, Hubspot, or Eloqua. These platforms represent each customer as a lead, or several, who interact with your marketing content. Marketing automation platforms record the interactions and you choose a revenue attribution model that appropriately distributes the won dollars. Revenue attribution models objectively look at how customers interacted with your content and tell you which programs had the highest impact. There are several ways you can to do this depending on your business goals.
Revenue Attribution Models
This single-touch revenue attribution model gives all the revenue credit to the first marketing activity. This is the activity that first brought a lead into your world. This is one of the most basic revenue attribution models marketers use. It assumes that your first interaction with a customer had the most influence on a customer’s decision to buy.
This single-touch revenue attribution model gives all the revenue credit to the last marketing activity prior to the handoff from marketing to sales. Marketers use this model most often, despite its simplicity. This model assumes that the content that finally converted the lead had the most influence on their decision to buy.
This is a multi-touch revenue attribution model that spreads revenue credit evenly across all marketing programs run on a 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. Not all touchpoints are equal and a revenue attribution model should not treat them as such.
This is a multi-touch revenue attribution model that spreads revenue credit based on how recent the marketing program interacted with a lead. This approach recognizes that not all touch points should be weighted the same. Instead, the most recent activities get the most weight. The idea is that each step in a customer’s journey is more important than the last.
This is a multi-touch revenue attribution model that can take a few different shapes. In this case, you should think of it as a U. The first touch and last touch get the most credit and everything in between shares the rest. This model acknowledges the importance of the first and last touch while still attributing revenue to all interactions. This is a fair approach, but the weight of the first and last touch have a large impact on the results.
This is a multi-touch revenue attribution model that proportionally credits revenue 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. This approach uses a scoring process that you’ve already vetted and weights the customer’s interactions accordingly. The drawback to this model is if you do not have lead scoring.
Questions Marketing Attribution Answers
- What is my marketing ROI by marketing program or channel?
- If I invest in a certain program type what do I expect the returns to be?
- Where do customers find us online?
- How do our customers engage with us prior to making a purchase?
- How long does it take our customers to make a purchase decision?
- Which content is most compelling to our customers?
Now that you know what revenue attribution means it is time to implement it for your business. You should pick an attribution model that aligns with your company’s goals. It should be based on how your customers interact with your marketing content prior to purchasing. At ORM we specialize is in helping our customers demonstrate their marketing team’s value. If you have any questions, or would like help implementing a revenue attribution model, let us know at email@example.com.