Put simply, a Google Analytics-style lead attribution strategy is based on leads, while revenue attribution is based on revenue. A traditional agency approach defines digital marketing conversions as form submissions or ad clicks. These conversion metrics are expressed in terms of cost per lead, cost per clicks, or various other vanity metrics. Traditional lead attribution can be misleading, because their definition of conversions do not reflect increased sales or revenue. Revenue attribution tracks digital marketing efforts past the point of obtaining a lead and takes a much deeper dive into the marketing efforts that result in an increase in sales and revenue.
Let’s use a story to take a closer look at the difference between the two attribution methods.
A company is having trouble with their digital marketing, specifically their Facebook ads. The ads are being pointed back to their website and they are getting lead submissions and a lot of traffic, but no sales conversions. There are no changes in sales or revenue, just a lot of new leads. Someone in the marketing department suggests trying Facebook Lead Forms because it removes a lot of barriers by creating the opportunity for single-click form submissions directly from Facebook. Their rationale is that the easier they make form submissions, the more leads they will get, and therefore the more their campaign will be deemed a success. The company implements Facebook Lead Forms and all of a sudden their incoming lead volume doubles and the cost per lead submission decreases significantly. Everyone celebrates because this is obviously a success right? Unfortunately not. Three months later, a marketing manager looks into the metrics and realises that the conversion rate has drastically dropped. The team is stumped.
What is happening?
There are a few key reasons for this result. Firstly, while it may seem like an obvious solution, sometimes removing the barrier to submitting a form is not always a positive. It can result in an increase in enquiries from people who don’t really understand what they are enquiring about. The form needs very little effort, so it’s easy to submit when you don’t understand what you’re submitting.
Secondly, when you submit via Facebook Lead Forms, you lose the opportunity to retarget those prospects on other channels. You can retarget on Facebook, but if a prospect hasn’t visited your website, then they can’t be targeted on Google.
Finally, and most importantly, the team in the above example is using the wrong measure. The main metric that should be focused on is the cost of acquisition. Instead of looking at cost per lead, they should measure all revenue from actual paying customers that have been sourced from Facebook, Google etc. to determine their actual cost of acquisition. This is the real measure of success for digital marketing.
If the cost of acquisition is more than the cost of your product, then the campaign is an obvious fail. If it is more than your marketing budget allows, then you should consider if it’s time to divest and move to Google Search marketing because of its ability to better target customers. Search advertising targets a prospect using their search intent rather than their interests or demographics. While it may seem more expensive in comparison to Facebook advertising, it is much more powerful and can actually be cheaper when you break it down by the cost of acquisition.
It’s important to note that a campaign that creates a huge amount of leads with limited conversions will result in an extra hidden cost of the sales team calling those leads. So using a cost per lead metric could actually be costing exponentially more than you think by the time the FTE headcount cost is included.
So where do you start?
Start with knowing that everything has to be measured. If it can’t be measured, it can’t be managed. The following elements are critical components of revenue attribution.
- CAPTURE Revenue attribution should be managed through UTM parameters, which come from Google Analytics. The key is to capture UTM parameters on a lead record from the very beginning, so that the UTM parameters can track a customer’s entire journey. Connecting your UTM parameters to each of your customers is a very important first step to successful revenue attribution.
- CONNECT Your UTM parameter attribution must be connected all of the way through the sales process to understand the lead sources for your marketing efforts. This shows where your sales are coming from, including source campaign, platform and search terms, and allows you to run reports that identify your gaps.
- MEASURE You should be constantly tracking and measuring the success of your campaigns, but we recommend a formal data analysis on a monthly basis. Any less than a month will not provide enough data and more than a month means your analysis is too slow. Monthly analytics enables you to understand where your revenue is coming from and then customise future digital advertising efforts based on your past success.
- PIVOT The data gained by undertaking the first three steps will uncover any conversion issues. Analysing disqualified leads identifies common denominators and patterns so you can address the issues. It could be a simple fix, such as your ad being shown at the wrong stage of the journey and therefore requiring a nurturing program. You may even be targeting the wrong audience for the type of customer you are trying to attract. If the data shows an ineffective digital marketing effort, you can consider moving your budget to spend more on valuable campaigns. Figure out the data patterns each month and then adjust your budget and campaigns based on what the revenue attribution data is telling you.
The right software can help with your tracking and analytics. Revenue attribution is an underlying Salesforce configuration that is integrated into your website to capture attribution and UTM parameters which can then be used to automate these parameters in your sales efforts.
Pardot provides significant insights by offering plug-ins and attribution tools that track organic searches which aren’t tracked by UTMs. Pardot uses automation rules and processes to automatically trigger attribution activities based on UTM parameters. This means you can automatically set lead sources and trigger detailed campaigns without relying on manual implementation from sales teams.
The end game
It is easy to get a solid lead volume, but it’s hard to make conversions. The details provided by proper revenue attribution will uncover surprising hidden truths about the campaigns and digital marketing efforts that are actually performing well, compared to the ones you think are successful because of a high volume of leads. If you don’t look past lead data, then you will never obtain the whole picture. It is critical to make decisions on all of the data and not just the data up to the point that a lead is generated.
While Google analytics is certainly not the enemy, it is also not the end point for data. Many companies miss out of valuable data because their data analysis relies on Google Analytics only. You need to look much deeper to truly uncover valuable data that maximises your digital marketing efforts, increases conversions and optimises your ROI.
If you’re looking to up your analytics game, we can help! Contact us to answer any questions or enhance your approach to analytics.