Marketing Insights - The Art and Science of Creating Demand

Yesterday, in our series on Marketing ROI, we looked at Myth #1 – Cost per name is enough for measuring marketing effectiveness. The reality is a single metric does not tell us the whole story. Today, let’s explore different campaign revenue attribution methods so that you can better begin to look at the bigger picture.

Myth #2 – Long-term ROI analysis is better/worse than the short-term ROI analysis. Reality Check – Campaign revenue attribution methods will always be flawed no matter which method you adopt. The key is to pick your methods, be consistent, add complexity as you learn from your data analysis.

Even if you have the most automated system in the world, it still is never going to be 100% perfect. No campaign revenue attribution method can perfectly account for the role brand awareness, customer referrals, sales efficiencies, impact the likelihood that your buyer will purchase from you. And, what about that rogue sales rep who never associates a primary contact (and therefore campaign history) to all of her bluebird opportunities that keep coming in? The goal is to pick a method that you can actually adopt and make decisions from. In many cases a short-term analysis and a long-term analysis perspective is helpful for different reasons. And remember, we are looking for trends. Short-term trends help us make immediate tactical choices in optimizing campaign assets, etc. Long-term trends help us to strategically plan and demonstrate a broader sphere of influence.

First, start with the end in mind – where and how do you want to report on campaign performance? Next, pick a revenue attribution method that makes sense for your organization in terms of your analytics maturity, the technology and resources you have access to, and your sales and marketing processes. Now, stick with it. Be consistent for a period long enough to identify short-term trends, test, and optimize campaigns over baseline performance. If you currently do not know what your impact on revenue is today – you may be starting with a baseline of 0. Some methods to evaluate:

100% Most Recent Campaign – A simple model may look like 100% forecasted revenue attributed to the campaign that caused the buying cycle. In a CRM system like Salesforce.com – this would be called Opportunity Source and it would reflect the most recent campaign of the primary contact associated to the opportunity. If you want to leverage out-of-the-box ROI reporting and dashboards in a system like SFDC.com – this model may make most sense for you. 

%Split Across Original/Most Recent – Other CRM systems may support a simple splitting of revenue attribution across more than one campaign tied to the primary contact mapped to the opportunity. This may make more sense based on functionality supported by your CRM and the length of your sales cycle.

Equal Attribution Across All Campaigns – One way to gauge total influence on revenue is to equally weight revenue across all campaigns of contacts mapped to the opportunity. 

Complex Weighting By Campaign Type – After short-term trends are proven out and validated, you may choose to advance to a more complex weighting of revenue attribution based on Campaign Type to demonstrate total influence. For example, a Web Resource Center visit participation gets 5% of the credit, where an in-person tradeshow meeting gets 25%, etc.

Long-Term Marketing Influence – Long-term ROI metrics can be leveraged in conjunction with short-term ROI models to better understand less tangible aspects of marketing effectiveness and overall influence.

Which methods make sense for your organization? Are you doing something different? What process and technology changes will you need to account for to adopt new methods?

Tomorrow…Myth #3: The data will provide us with a “perfect path” of events required to convert a customer.

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