The average prospect engages with a brand several times across several channels or touchpoints before converting.
So, how do you know which channel or touchpoint should get credit for each conversion?
The short answer is attribution models. Here, we’re going to discuss the power of attribution models, explain how they can improve your sales and marketing success, and look at some practical examples.
Let’s get started.
An attribution model is a system that determines how your business credits—or attributes—sales or conversions to various touchpoints, channels, or conversion paths.
Attribution modelling is a framework designed to shed light on which touchpoints or channels should receive credit for a particular conversion. Every attribution model will vary depending on your business model or goals and, as such, will distribute value across channels differently.
The six most common sales and marketing attribution models utilised today are:
By drilling down into each of these valuable attribution models, you will gain a clear understanding of which channels or touchpoints offer your business the best return on investment.
Attribution is an incredibly powerful tool that will empower you to take charge of your sales and marketing activities. Taking a data-driven approach to attribution modelling will allow you to bring your sales and marketing teams together by removing any ambiguity concerning the source of your conversions.
By removing any uncertainty, you will be able to optimise your sales strategy, placing your time, talent, and resources into the channels or touchpoints that yield the best results.
Now that you’re up to speed with attribution modelling, we’re going to explore the six concepts we discussed earlier.
Also known as last click or last touch, the last interaction attribution model gives full credit to the final engagement or interaction a prospect had with you before converting.
For instance, if a prospect visits your online store through an organic search and browses a few product pages before bouncing elsewhere, but a week later, they click through to your business website and complete a form (conversion) through a sponsored social media post, the social ad will receive the attribution credit.
The first interaction attribution model mirrors the concept of last interaction—but in reverse.
By offering complete credit to the first click or interaction a prospect has with your business, this model will shed light on the original source of a potential sale or conversion.
In this case, based on the previous example, organic search will receive 100% attribution for the conversion or sale.
Drilling a little deeper than the last interaction attribution model, the last non-direct rule dictates that full credit goes to a single channel rather than “direct engagements.”
For example, if a prospect opens an email from your company, scrolls through it, clicks on a CTA (Call To Action) button, and then makes a purchase, then email or email marketing will receive 100% of the credit.
Rather than focusing on direct clicks, this method offers a broader insight into how a customer engages with your business before converting.
Position-based—or U-shaped—attribution shares credit between interactions. Typically, 40% credit is assigned to the first and last interactions, and the remaining 20% credit is shared evenly between the engagements or interactions that occur in the middle of the prospect’s journey.
Let’s say a prospect makes initial contact with your brand through an organic Google search, then attend one of your webinars, and later subscribes for email updates. The first and last engagements would earn 40% of the credit each (organic and email), and the webinar registration would get the remaining 20%.
This model is useful if you work with multiple customer channels and touchpoints. The balanced approach emphasises the first and last interaction while offering useful insight into the engagements that take place during a prospect’s pathway to conversion.
With the linear attribution model, conversion or sales credit is split evenly among every engagement, channel, or touchpoint.
Suppose a prospect finds you via an organic search, interacts with your webpages, visits your LinkedIn account, and finally clicks on a specific email promotion to make a purchase. Each of these four interactions will earn 25% of the credit.
This model is simple and will offer you a balanced insight into your overall sales or marketing strategies. However, because it gives equal credit to every interaction, you should work with additional models to gain deeper insights into the efficacy of your processes.
The time decay attribution model works similarly to the linear concept in the sense that it spreads credit across all interactions and touchpoints. However, with time decay, the emphasis is placed on which touchpoints occur closest to the conversion.
The interaction or engagements that happen closer to the point of conversion will earn the lion’s share of the credit. Based on our linear mode example, credit may be distributed as follows:
Organic search (15%); webpage (20%); LinkedIn (25%); email (40%).
The time decay model is effective if you’re tracking a longer sales cycle or looking to understand which of your channels encourage the best relationships or earn the most engagement.
Attribution models will give you a wealth of insight into your sales and marketing activities. By leveraging a combination of CRM and Marketing Automation tools, you can track every interaction with ease and refine your attribution model overtime.
You can improve opportunity creation by using a solid lead management and scoring system to enhance the quality of your leads while utilising a mix of attribution models to optimise every stage of your sales and marketing activities.
If you want more information about what KPIs you should be tracking as a marketing leader, why not listen to the webinar our CMO ran recently.
And for further insight into the business-boosting capabilities of customer relationship management platforms, read about what to look for when choosing a CRM for your business.