It’s that time of year again — the time when marketers reflect on the past year and analyze the performance of all the initiatives put into place. Maybe you had a social media campaign that did better than expected, and an email marketing campaign that was a bit lackluster. Whatever your results, we all know the process of marketing attribution is important. But how can you do it in a way that gives you actionable insight into which campaigns provided the most return on investment (ROI)?
Lots of people take the approach of simply looking at what marketing spent and comparing it to what the company brought in for revenue and profit. That’s not a bad place to start, but there can and should be so much more to it than that. If you don’t take a deeper look at marketing’s attribution and ROI, you’re likely missing out on valuable information about marketing’s actual contribution to your company’s bottom line. After all, in order to best know where to allocate time and resources for the coming year, you need to know what provided the best ROI.
Marketing is one big party
Think of your business as one big party. We all know that it’s marketing’s job to get people to come to the party, but it’s also their job to make the party fun. If people aren’t having a good time at the party, they’ll leave. To know whether or not people are having a fun time, you need to think back on all the interactions people had with your party. Did someone take the guest's coat, or offer them a drink? Was there enough food available? How was the atmosphere and the conversation? Marketing has to be the host(ess) with the most(ess), and the more touch points you analyze, the better you’ll understand why people are or aren’t having a good time at your party.
So, how do you apply that to your business? Like we mentioned earlier, the best place to start is to look at revenue from the past year, and compare that to your cost of acquisition (CAQ). How much time or money did marketing spend on campaigns or initiatives? Make sure to include money or time spent on advertising or media, events, and your employees. Then look at which deals were directly impacted or sourced from those campaigns.
Every engagement counts...
To understand impact of each event, it’s important to uncover each touchpoint that a prospect had with your business from the very first interaction to the moment they became a customer. Which pages did they visit? Which posts did they read? Did they download any of your premium content offers? Once you know which touchpoints are the most effective, you can prioritize them in the coming year.
If you’re not sure how to go about analyzing touchpoints, there are a myriad of tools that can help you do just that. InsightSquared, Bizible, and Terminus/BrightFunnel are a few of the ones we’d recommend. They won’t measure engagement retroactively, but you can implement them to get lots of valuable data going forward.
But some engagements weigh more than others
To further attribute success to the appropriate touchpoint, it’s a good idea to have a model for ROI. An ROI model will help to give a larger percentage of the credit for a deal to the touchpoints that matter the most. There are lots of different models to choose from, but one thing to avoid here is to attribute all of the credit to one single touchpoint — that way you’re not putting all your eggs in one basket. The “W” model is a popular one, and for good reason. It distributes credit for a successful deal over all of the lifecycle stages, with the most credit being given for the first, middle and final touchpoints. Another useful tactic is to use a split calculator to determine the percentage of credit that should go to marketing touchpoints, or to sales. The more touchpoints a prospect had before becoming a customer, the more of that deal that should be attributed to marketing.
Calculating your marketing attribution and ROI is one of the most important things you can do for your business. It enables you to understand how and why people are interacting with your business, and allows you to accurately forecast for the upcoming year. While there are many tools and approaches to doing this, the best ones will always be the ones that give your company the most visibility into the customer journey.