Revenue attribution delivers the metrics marketers need to build winning strategies and prove their impact on business goals. So why are so few of us using it?
"The interesting thing about an objective truth is that it's true no matter what."
- Neil DeGrasse Tyson
Marketers tend to be optimists. In some ways, it's a job requirement: if we didn't perpetually underestimate the effort needed to reach our goals, we might never have the courage to get started. But we need to add a healthy dose of reality into the mix if we're going to convincingly prove (to ourselves and the wider organization) that our marketing efforts are generating revenue and delivering ROI.
Most marketers can see the writing on the wall: we know we can't keep using wishful thinking and marketing metrics such as views, clicks, form-fills as a substitute for what we really want to measure: marketing's impact on revenue. The pressure to transition from clicks to revenue is mounting, and 2020 is shaping up to be the year where revenue attribution moves from the fringes to take center stage.
The Attribution Disconnect
The way success is measured and goals are defined for marketers is changing. We are increasingly being held accountable to revenue and rewarded based on revenue goals. The vast majority of marketers (90%) agree that measurement and reporting is a top priority for their organizations, and a 2019 report by Heinz Marketing found that more than two-thirds of B2B marketers (67%) are now accountable for revenue performance or contribution.
Those expectations are starting to impact marketers' paychecks, too. A growing number of organizations are also compensating marketers based on revenue and/or closed business: a 2017 survey by TrackMaven found that this was the case for nearly one in four marketing professionals (23%).
And yet, marketers who are able to measure impact on revenue are still the outliers, not the norm. According to one recent survey, one in three marketers (33%) admit to still having NO attribution model in place. In a 2017 survey by Kapost, more than 50% of marketers said that proving content ROI was a significant barrier, and 90% said they were still using vanity metrics in their attempt to do so.
So, what's holding the majority of marketers back?
Inertia, Silos, and Stacks
If you struggle to connect your marketing activities to revenue, you're not alone. Simply put, revenue attribution is hard. Very few marketers in 2020 can claim to have a reliable attribution model in place, and it's not because they don't see the value in it. It's because in order to create one, they need to overcome three big challenges:
It's always easier to keep doing what you're already doing than it is to change, and re-aligning your marketing processes around organizational goals (revenue) rather than traditional marketing goals (clicks, views, etc.) is a big change. And that change extends beyond the traditional marketing "domain" to encompass sales and finance, which makes it even harder. To generate the required momentum, marketing leaders need to make a deep commitment to leaving the status quo behind and become change champions within their organizations.
To create an effective attribution model, you have to break down silos that have existed in virtually every organization for... well, forever. Tracing the buyer journey and connecting all the dots requires organization-wide buy-in and coordination between marketing, sales, finance, and IT. If your efforts to build a system of attribution begin and end with marketing alone, they won't get off the ground. It's as important to bring PEOPLE together as it is to bring TECHNOLOGIES together, which is a topic we cover in-depth in our eBook, Change Agents: The Radical Role of Tomorrow's CMO.
Getting the different layers of the marketing stack to play nicely together can sometimes seem like a never-ending task, but revenue attribution requires stack coordination across departments. You'll need to build an underlying data architecture that enables the data to flow from your website (and other digital properties) to your marketing automation platform to your CRM in order to establish a sightline from one end of the customer journey to the other.
More Revenue, Insight, and Ownership
Revenue attribution may be hard, but it's worth it. Being able to attribute revenue to specific marketing activities has a transformative impact on marketing's ability to generate more revenue, gain more insight, and take greater ownership of the role they play in helping their organization grow:
Marketing is like quantum physics, where just observing a phenomenon is enough to fundamentally change it. When you're able to track the way revenue is earned through end-to-end attribution, the amount of revenue earned actually increases. Forrester research analyst Tina Moffett reported that implementing a closed-loop attribution system resulted in a 15-18% revenue lift because it enables marketers to optimize programs based on more sophisticated performance analysis.
Being able to identify the revenue earned by specific marketing activities delivers deeper insight into what works and what doesn't. A Forrester study found that revenue improved digital-media marketing efficiency between 15-30% by enabling marketers to identify and eliminate waste. When you know which channels and campaigns are responsible for the greatest revenue gains, you can reallocate funds to areas that generate not just views and clicks but actual dollars.
Marketing is responsible for a longer and longer stretch of the buyer journey: one Forrester estimate suggested that buyers are up to 90% of the way through their journey before reaching out to a salesperson. That means more marketing touches, more campaigns, more content production, and distribution. But without being able to track that activity and align it with a specific sales opportunity, marketing remains an unsung hero. Revenue attribution enables marketing to prove that without those intensive efforts to nurture and accelerate buyers through the largest part of their journey, sales wouldn't have those opportunities to close.
A Revenue Attribution Framework
What's the first step in the journey toward revenue attribution? It begins with a framework that collects marketing data throughout the customer journey, from initial engagement all the way through sales fulfillment.
The foundation of that framework depends on a data architecture that defines how data needs to be collected, stored, distributed, and consumed in order to reliably support business requirements. Once that foundational layer is in place, you need tools capable of turning high volumes of data into analysis that examines how that buyer interacts with your brand at every step. That analysis, in turn, generates insight that informs the decisions you make about what to keep doing, what to stop doing, and which new opportunities to explore.
Building that foundational layer of data architecture requires both technical proficiency and broad-ranging business expertise. You'll want to choose your core team wisely to ensure that both marketing and business requirements are being translated effectively into technical capabilities. If you don't have the right expertise on your team, this is an area where the right agency partner with specific experience in building a revenue attribution model can make all the difference.
Getting the data architecture right is the hardest part of the process, and the most important, because it creates a source of truth that the whole organization can believe in.
An effective revenue attribution model puts people at its center. That means that your data architecture is capable of collecting three critical data sets and associating those types of data with each person your company interacts with (and the definition of a "person" includes unknown and known leads as well as opportunities):
Source attribution: Source attribution enables you to determine where a person came from and what channel brought them to you. Examples might include a clickthrough from a search ad or syndicated article, a webinar sign-up, or attendance at a tradeshow. It's also important to track the channels that subsequently re-engage the person, such as email campaigns or retargeting ads.
Campaign attribution: Campaign attribution tells you what specific offer or content attracted the person to one of your digital properties. For example, you might promote a single white paper through multiple channels including a paid LinkedIn ad, an email campaign, and a series of tweets. Tracking the campaign as well as the source enables you to measure the relative effectiveness of different channels as well as different types of content.
Revenue attribution: This is where the rubber hits the road. The data set for revenue attribution tells you which people end up generating revenue for your organization, which means connecting multiple people from a single organization to a specific sales opportunity in your CRM. This is important because if marketing has engaged, nurtured, and qualified five different people from Company Q, all five are likely to have influenced the buying decision, even if only one of them converts into a sales opportunity. If all of that firmographically linked activity isn't tracked against revenue, marketing's true impact will be underrepresented. (And as a side note: if the process isn't seamlessly embedded in the sales workflow, it won't get tracked at all, and the initiative will be doomed to failure.)
An Objective Source of Truth for Marketers
Views and visits and clicks are important to marketers, and they will always be part of a marketer's toolkit. But clicks are not a form of currency that the rest of the organization understands or cares about: revenue is. And until we, as marketers, prioritize the work of building attribution frameworks that objectively prove our impact on revenue, we can't achieve our potential as vital contributors to overall business success.
We're all tired of chasing trends, especially at this time of year. But revenue attribution is not a trend. It's the new reality for marketers, and the longer we avoid it, the harder it will be to adapt.
A few parting thoughts to speed you on your journey toward revenue attribution:
Get the conversation started.
Building a revenue attribution model requires organizational buy-in. It's a "people process" as much as a technical process. Start engaging organizational leaders now to sow the seeds. Download the Change Agents eBook for tips, or download the full boxed set, which includes the eBook and a step-by-step playbook.
It's hard, but don't give up.
It's not just you: revenue attribution is hard for everyone. Chances are, you won't achieve it flawlessly the first time you try, but you'll learn a lot by the experience and get that much closer to your goal.
Start with the data.
New technology won't solve your attribution challenges, so don't get distracted by new toys. Virtually every marketer already has the basic elements of the "attribution stack": a website, a marketing automation platform, and a CRM. Focus on creating a data architecture capable of connecting the dots between these three elements.