Tag: marketing attribution

FY Demand Gen Planning: Rapid Fire Q&A

Challenge: How do we set targets for next FY?

As we cross into a new fiscal year, many thoughts lie in planning for the coming year. Evaluating demand gen programs require some form of an attribution model and process which can cause significant confusion and concern over accuracy. This post will address a number of common questions in the process and some various solutions with their tradeoffs. Which one(s) should you use? Of course, the answer is ‘it depends.’ Please note that this post builds upon a past blog note here that spoke to relative maturity levels of attribution. 

My assumption here is that your company has a reasonably mature attribution infrastructure where engagement/response is tracked using both channels and campaigns. What I mean here is that the systems track both ‘what’ the prospect or customer did (e.g. registered for a webinar, attended a field event, stopped by the tradeshow booth, downloaded content, requested a demo) and ‘how’ they came to that action (digital ad, organic search, sales email, marketing social post, partner promotion). So the company can report both on ‘campaigns’ as well as ‘channel’ sources).  Let’s get onto the questions. 

One thing you will not see here is any mention of MQL. While MQLs can be very helpful to understand the larger funnel operation, the purpose here is to understand either opportunity creation or closed-won deals. So MQLs can be a nice ‘early detection’ for future opportunities to be created (assume you have a consistent conversion rate) but are not really an objective themselves and therefore not part of FY planning. They certainly will be a derivative of the decisions made for FY planning that should be pretty straightforward. 

Side note on data quality. If your GTM team is not adding all contacts involved in a deal to the opportunity, then the data you are using is correlation and not necessarily causation. What I mean is that if you are looking at contacts associated with an account that interacted with your programs before the opp was created but not associated with the opportunity, then you are assuming that there was some interaction (correlation). If you are associating all contacts with an opportunity and using only the engagements with those contacts, you can be more certain that the campaign participation was related to the opportunity creation (causation). BTW – there are some great tools that help automate the process of adding contacts to opportunities – saving your GTM team lots of time and making the process less dependent upon updates to your CRM. 

What timeframe should I use for program evaluation?

First, let’s say that this depends if you want to look at opportunity creation or opportunity closed-won. For this article and for many marketing organizations performing planning, I will look only at opportunity creation. Running a review on the average time from first prospect engagement to opportunity creation is an important input here. Let’s say it averages 45 days from first engagement to opportunity creation. I might suggest doubling this to be 90 days. However this will bias your results to look at only those engagements that happened close to opportunity creation. There will be many times when prospects engage with your content a year or longer before they become an opportunity and those campaigns/sources will get no attribution. So why not go longer to include more touchpoints? Well the issue is really one of relevancy. An interaction that occurred a year ago may have introduced your brand to that prospect but was not directly relevant to the creation of the opportunity. Our search here is to understand what were the most seminal causes for the creation of this opportunity. 

This just reinforces that marketing will have to make investments now that are not expected to pay off in the near term. Think about the impact of user conferences, press coverage, analyst coverage and more. These all impact general brand awareness and affinity – but will likely not impact short term pipeline creation. So marketing pros need to take this understanding into account so they do spend on longer term value programs that will pay off in future quarters. 

Which model should I use for program evaluation?

Without considering every option, there are two main options: First Touch or Multi Touch. First touch attribution is great for understanding how you met the prospects who influenced your opportunity. There are a few good things going on here. First, it fully attributes the success of the contact with the opportunity to ONE source and campaign. This is super clear and it aligns with the important decisions on which programs we should run to create new prospects that will help us meet our quarterly and yearly goals. Here you will typically see a few sources dominate: organic/direct, paid search/social, and third party events. However, what this effectively ignores are field events, internal webinars, and tech demos that typically get prospect participation through offers to your internal database.  

Here is where multi touch attribution provides great strength. This gives each campaign/source interaction some weight (equal or not proportionally allocated) so those campaigns that typically occur as a second or later touch point get their fair share of attribution. Since this treats all campaigns more equally, why not only use multi touch? Well, let’s say you need to allocate how all of your programs will contribute toward a targeted number of opportunities to be created in a given quarter, first touch does a better job of not ‘double counting’. To counteract this, multi touch models can ‘divide’ the relative value of each touchpoint to an opportunity. So if there were four touchpoints, each one would receive .25 ‘points’ or credit. If your model accommodates this, then this can greatly simplify your budget planning process.

Which model should I use for FY planning?

Having the review of FT and MT above, it becomes clearer that we need a model that does not double count opportunities. We need a solution that will tell us for a given spend, how many opps can we expect. FT is a simple way to get there but it completely ignores the value of secondary touchpoints required to create an opportunity. So the better option is a MT attribution model that breaks down the relative impact of the touchpoint. So if we know that a webinar attendee will generally drive .25 of an opportunity, we can then associate the expected opps for that webinar spend. 

In the end, we are trying to create a budget and plan that shows we can spend $X to drive Y opportunities for $Z program spend to meet the required pipeline creation. Looking back at past program performance, we can estimate future expectations. The best news of planning this way is that you are handing the people on your team a specific budget to run specific programs with an expectation of specific performance. This enables your team to figure out the best way to manage their programs to achieve this level or more.  Or, they can come back to you and discuss if these expectations are really realistic. Better to know this now – in advance of the quarter so you have time to make adjustments.  

How do I review or assign sales versus marketing sourced pipeline/deals?

Oftentimes, opportunity creation goals will be distributed across sales, partner and marketing teams. But how do we segment across these teams? If there are five touchpoints on an opportunity across sales, partner and marketing teams, who gets the credit for that opp?

Again, if we have a sophisticated MT infrastructure set up so that each touchpoint is credited to one of these three organizations, then this dramatically simplifies the process. We can use past tracking to estimate future results. If you don’t have this in place, using a FT model can help you get to an estimate but you need to then manually allocate more towards those programs which you know are secondary touchpoints and have evidence of their success. While this is not an ideal or perfect process, it can get you pretty close. And, after all, the planning process is designed to be directionally accurate with the real impact being on how effective your team is in executing the programs. 

In any event, you must track your plan to actual results in a retro analysis so your planning process can more closely predict future results. Understanding why your plan over or under estimated returns is critical to getting more accurate each quarter. In this way, you are building a reliable revenue generating machine. And this is what the public markets value most.

Lesson: Planning demand gen is not a perfect science but with accurate data, open communications and team reviews, your planning will get better quarter over quarter 

Revenue Attribution Maturity Assessment: The Journey to Reporting Nirvana

MarketingDashboardChallenge: Accurately Reporting Marketing Contribution Without Over-Investing Time and Budget

For many years marketing teams have aimed to identify their contributions to their companies’ success. Over the last five years, there have been significant advances in the tools available as well as the business processes by which data can be managed to support greater insights and gain competitive advantage. In fact, marketing groups today are frequently responsible for driving a specific percentage of company revenue so identifying revenue sourced by Sales or Marketing is critically important to measuring business performance.

But measuring marketing contribution is time, resource, and budget hungry. So how much should you invest? What tools will contribute to success given the maturity of your organization? In working with many different organizations, I have noticed common themes on the road to attribution maturity. Knowing where you are on this maturity timeline will help you plan for what may come next for your organization. While every company is unique, I believe there are common attribution lifecycle stages – and companies move through them as they need greater detail and insight.

So check out where you in attribution maturity so you can balance investment against the value of increasing visibility.

Stage 1 – Early Startup

  • Definition: Sales and Marketing have agreed upon revenue contribution percentages
  • Typical Revenue: $0-$500K ARR
  • Sales-Marketing Alignment: Handshake agreement on total new account revenue sourced by Marketing vs. Sales
  • CRM Deployment: Early deployment often still optimizing data and reporting process/structure
  • CRM Usage: Consistent campaign association is not yet defined for Leads, Contacts and Opportunities; Marketing automation may not be integrated with CRM
  • Attribution Process: Manual monthly or quarterly update of opportunities as Marketing vs. Sales sourced
  • Primary Challenges: Manual update of opportunities becomes overly time consuming

Stage 2 – Maturing Startup

  • Definition: CRM deployed with basic campaign attribution reporting
  • Revenue: $500K ARR – $5M ARR
  • Sales-Marketing Alignment: Attribution to Marketing or Sales identified and defined by first or last touch for new business; starting discussion on up-sell and cross-sell attribution
  • CRM Deployment: CRM standard utilization enforced, Sales forecast process optimization ongoing, Marketing automation integrated
  • CRM Usage: Both Sales and Marketing have created a data dictionary and have established standard processes for updates that have moderately successful usage
  • Attribution Process: CRM reporting using first or last touch for Marketing vs. Sales attribution
  • Primary Challenges: Both first and last touch neither accurately describe opportunity drivers nor comprehensively reflect Marketing and Sales program impacts

Stage 3 – Growth Startup

  • Definition: Specialized attribution software deployed in first version
  • Revenue: $5M ARR – $50M ARR
  • Sales-Marketing Alignment: Comprehensively defined Sales vs. Marketing source new business, upsell/cross-sell business and optimization of handoff processes
  • CRM Deployment: Utilize industry best practices for data integrity and reporting, generally solid compliance from Sales and Marketing teams, and relatively accurate sales forecasting; Initial deployment of third-party attribution tools
  • CRM Usage: Sales operations focusing on tight rep compliance with CRM, Marketing Operations focused on data quality and completeness
  • Attribution Process: Sales vs. Marketing sourced opportunities identified by campaign touches driving the MQL; utilizing both Sourced and Influenced models to optimize marketing performance
  • Primary Challenges: When sourced and influenced models do not accurately capture full account-based attribution impact or when weighted touch models are required to adjust campaign influence over customer journey

Stage 4 – IPO Readiness and Public Company

  • Definition: Specialized attribution software deployed in second iteration
  • Revenue: $50M ARR – $500M ARR+
  • Sales-Marketing Alignment: Business operations teams fully integrated across Sales and Marketing with BI dashboards/reporting; Monthly/Quarterly attribution reviews for program and process optimization; Early deployment of predictive revenue models
  • CRM Deployment: Sophisticated CRM deployment managed by business operations team with sophisticated reporting (BI tools) and data accuracy for regulatory compliance
  • CRM Usage: Well established guidelines and training; key processes are reinforced with end user compliance
  • Attribution Process: Multiple attribution models including weighted touch attribution and account-based models supported by analytics team to assist in utilization and interpretation of the data
  • Primary Challenges: Managing time, cost and complexity of attribution reporting as well as the ability of most marketing team members to absorb the complexity of these models

What has been your experience? Do these levels ring true? Was this helpful to your planning?

Lesson: As organizations grow, so do their needs for better attribution. It is important to make the right investments at the right time to keep attribution management time and costs in line with overall revenue goals.

 

 

Marketing Attribution – Worth the Effort?

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Challenge: Considering the Challenges of Marketing Attribution, How Deep Should You Go?

Marketing attribution is a hot topic. You need to know which programs are worth the effort and expense and marketing must demonstrate its contribution to revenue. In fact, both marketing and sales must both carefully plan and measure their unique contributions to more accurately predict revenue.

However, Sergio Maldonado’s recent guest post on Scott Brinker’s Chief Martec blog raised some very important questions about the veracity of marketing attribution. The article challenging various aspects of marketing attribution is timely and worth a careful read. It also caused me to re-evaluate my ongoing efforts to focus on attribution.

The journey starts with developing a standardized way to tag Leads, Contacts and Opportunities to marketing campaigns, followed by a methodology to differentiate sales from marketing contribution (as well as sourced versus influenced). Adding various program costs and labor investment to the formula provides a more complete picture. However, this tells just part of the story as it analyzes attribution from first ‘form conversion’ to closed deal, without consideration for pre-conversion activities.

Tracking and attributing the activity of all stakeholders before form conversion is more difficult. Furthermore, attribution-to-revenue calculations only provide results for Contacts associated with a closed-won Opportunity, whereas other Leads and Contacts not associated often influence the deal. Therefore, this methodology ignores Leads and Contacts that influence but are not associated with the opportunity as well as all awareness phase marketing touchpoints that positively affected the opportunity.

By focusing only on campaigns with direct attribution, marketing may erroneously optimize for those programs only – at the expense of awareness and early stage funnel activities where attribution is much more difficult. The resulting focus on ‘directly attributable campaigns’ that occur at or after the first form conversion can easily result in a decreased ‘share of voice’ and ignore important early stage touch points. Often, sales prospects are unaware they have a problem or they’re unfamiliar with solutions better suited to their challenge. Awareness programs focusing on the earliest stages of the sales cycle are key to growing sales in the long run.

So if strict adherence to attribution metrics will lead to sub-optimal marketing resource allocation, should marketing invest time and resources in it? Unequivocally yes. At the highest level, Lord Kelvin was right when he said, “When you can measure what you are speaking about, and express it in numbers, you know something about it.” The attribution process is not at fault here (though it can and will certainly improve), rather the issue is how this data is used to make marketing investment decisions. Even though early stage program investments are not measurable in the same way that later stage programs are, they remain an important part of the marketing mix. Therefore, it is incumbent upon the marketing team to explain and defend these ‘awareness’ investments for the long-term health of the organization. The marketing team should also look for important correlations to justify these programs (correlations of direct/organic traffic with various programs, for instance).

In my opinion, marketing must continue to pursue attribution while keeping in mind the limitations of the current systems. Marketing investments should be made recognizing that the team cannot measure all aspects of the marketing mix, and more importantly, additional attribution effort investments should be made with an eye on overall effectiveness. While imperfect, I am reminded of the saying, ‘Even one candle sheds a lot of light in a dark room.’ Without attribution, marketing has no guidance about future investments.  But at the same time, marketing programs with impacts that are difficult to measure must not be ignored.

[Important note: Management should also look at the costs and benefits of the attribution process itself to ensure it is worth the effort. Tracking every last ounce of attribution adds significantly in terms of labor and cost, and at some point, these programs reach diminishing marginal returns. How a marketing team should optimize its spend on marketing attribution is a discussion for another time.]

Lesson: Spending time and resources on marketing attribution is critical, but it is just as crucial to realize program and system limitations to make truly optimized investment decisions.