Lead Attribution: What is It and Why it Should Be a Priority for Your Business
Did you know that lead attribution can result in efficiency gains of up to 30%? Attribution helps you understand your customers, and this leads to an increase in your ROI and improved customer experiences.
To benefit from the many uses of lead attribution, you should learn about the different models and choose the right tool. So, keep reading if you want to use attribution to generate more leads and spend fewer resources.
What is lead attribution?
Lead attribution is the process of assigning credit to marketing channels so that you can determine which channel is the most effective at bringing in new customers. Since one of the main uses of lead attribution is marketing optimization, the phrase is often used synonymously with marketing attribution.
That said, there’s a slight difference between the two forms of attribution: marketing attribution is a more general process, and it shows how marketing campaigns/channels impacted a goal, which could be lead generation and sales. Lead attribution, however, only looks at marketing channels’ impact on lead generation, not other goals such as purchases or sales.
Let’s illustrate this with an example so that you can better understand how lead attribution is used:
Say a user typed in “SEO tools” into Google and clicked on the first article that popped up, which happened to be yours. After reading the article, he decided to sign up for your SEO tool’s demo. So, you could say that your content marketing strategy brought you a lead. This would be an example of first-click attribution since you attributed the credit to the first touchpoint of your lead.
There are several other attribution models, ranging from first-click to time decay. But why should you use lead attribution in the first place? This is the question I’ll be addressing in this article.
Why is lead attribution important?
Users rarely have only one or two touchpoints before they become leads. The complexity of this journey makes lead attribution crucial.
Here are some of the reasons why lead attribution is vital for your SaaS business:
1. Helps you understand your ICP
80% of your company’s revenue comes from 20% of its customers. This twenty percent’s profile can be defined as your company’s ideal customer profile (ICP). Understanding this profile’s needs and demands helps you attract customers with high lifetime values.
When using lead attribution models, you understand the channels that attract customers from your ICP. For instance, when you see that customers with high retention rates came from Twitter, you understand that the Twitter users in your customer base tend to be high-quality leads. This shows you the platforms and types of content that your ICP consumes, so you should focus on creating more such content.
2. Improves ROI
An average SaaS company spends 15 to 25% of its revenue on marketing. That’s roughly a quarter of your budget allocated to ads, content and campaigns alone. When so many resources are dedicated to attracting leads, you should be sure that your strategies are effective.
Lead attribution shows you the channels and campaigns that had the intended effect on your customers. So, if you pour thousands into your PPC ads and see that leads are coming from your blog posts instead of paid advertisements, you should change how you prioritize your marketing channels for your ROI.
This prioritization is also beneficial for your marketing team. When your team knows the channels that deserve special attention, they can work more efficiently.
3. Improves Customers’ Experiences
Lead attribution can also be done on an individual basis. When you know the article, ad or campaign that led your customer to your sales funnel, you also get an idea about what they’re looking for in your product. For instance, if a user converted after reading your article about customer segmentation, there’s a high chance they’ll be looking for a feature that helps them with segmentation.
This information is handy for your product team. Customers don’t always state their demands explicitly, and your team should add the features users are looking for before customers start asking. By showing you the interests of your customer base and helping you add needed features, lead attribution helps you increase product and feature adoption.
In order to reap all these benefits of lead attribution, you should choose the type that best fits your marketing and sales strategies.
What are the 5 types of lead attribution?
Lead attribution models assign credit to single or multiple touchpoints.
By using these models, marketing and sales teams can understand the critical points in customer journeys, the touchpoints that had the most effect on conversions, the role of each marketing channel on lead generation, and so on. Unfortunately, 77% of people that use lead attribution models don’t think they’re using a suitable model or don’t know whether their model is the right one.
To make the right choice, you first must decide whether you’ll use a single-touch or multi-touch model. Single-touch models are more appropriate for direct response marketing strategies. So, if your goal is to generate leads without leading them to other touchpoints, you can use a single-touch model such as first or last interaction.
This model is also more suitable for businesses with short customer journeys.
On the other hand, multi-touch models are better for optimizing long customer journeys. This makes multi-touch models more popular amongst SaaS companies, which use long-term marketing strategies such as content marketing. Multi-touch models include the linear, time-decay and position-based models.
While learning about the uses and details of each model, it’s best to use an example.
Let’s say that a customer, John, came across your content on Google search thanks to your inbound marketing strategy (SEO). A few days later, he liked one of your Facebook posts (Social Media). He became intrigued about your product but wanted to see how it compares to the other tools on the market, so he read a comparison post on your blog (Content). Feeling convinced, John signed up for a demo of your product. Let’s say that John is considered a lead once he has signed up for this demo. Now, let’s see how this case would be analyzed with different lead attribution models.
1. First Interaction
The first interaction model assigns credit to leads’ first touchpoints. In the case of John, the first interaction model would attribute credit to your SEO strategy, which would mean that your search engine optimization efforts attracted John’s attention and are responsible for the lead.
If you think brand awareness is the most crucial factor for lead generation, then you should use the First Interaction model. After all, if John hadn’t come across your brand’s name on Google, he wouldn’t have followed you on Facebook or become interested in your products.
The first interaction directs your attention toward your leads’ first touchpoints. So, by using this model, you’ll be increasing brand awareness and using your company’s increased visibility to attract more leads.
44% of marketers say that this single-touch model is effective in measuring and optimizing digital campaigns, and that it works better for companies with few interactions and short customer journeys. So if this sounds like your SaaS company, you can use the first interaction model.
2. Last Interaction
Like the first interaction model, the last interaction lead attribution model assigns credit to a single touchpoint, the last one in leads’ journeys. In the case of John, this would mean assigning 100% of the credit to the content on your blog.
So, your content marketing strategy would be said to be the lead-generating step.
This model is suitable for SaaS companies with short cycles since the last step is where the lead starts considering a purchase. If, for instance, John had seen your name on Google, read your comparison post and then signed up for your demo, the last interaction model would’ve accurately captured his journey, and you would be sure that your content led him to consider a purchase.
If you’re just starting with lead attribution, this model may be a good starting point since most attribution tools offer the last-touch model in their free plans. Otherwise, you can use the multi-touch models below.
The simplest one of the multi-touch attribution models, linear attribution assigns equal credit to each touchpoint in a lead’s journey. This would mean 33% credit to SEO, Social Media, and Content in John’s journey. So, the linear model assumes that all channels had an equal effect on lead generation.
The linear model, and multi-touch models in general, is more complex than the single-touch models since it captures and analyzes all the touchpoints. While using a linear model, you’re focusing not only on the top or bottom of the funnel but all stages of the customer experience.
This approach treats each touchpoint as equally important. When you look at John’s journey, you know that the Facebook post reminded him of your brand’s name and the comparison post was the point where he felt confident enough to try your demo. You can focus on improving all of the touchpoints simultaneously with the linear model, but know that this process may require more time and resources.
The time-decay model tackles the linear model problem by assigning more credit to touchpoints closer to the point where the lead is generated. So, SEO might get 25% of the credit, social media 35% and content 40%.
The logic behind the time-decay model argues that stages closest to the point at which the lead is actually generated deserve the most time and attention; however, each touchpoint affects the conversion in some way or the other. This is a good approach because it helps you prioritize user touchpoints while optimizing your prospects’ interactions with your brand.
However, like every other model, the time-decay model isn’t perfect. It assigns the least credit to the initial step, and you can argue that brand awareness has a bigger role in lead generation than other touchpoints, which may only function as reminders to prospects.
Also called the U-shaped model, the position-based model assumes that the first and last touchpoints deserve the most credit. So, it assigns 40% of the credit to SEO and Content and the remaining 20% to social media in John’s journey. This is one of the best models for SaaS companies since awareness has an unignorable effect on lead generation.
For businesses with long cycles, either one of the linear, time-decay, and position-based models can prove to be useful.
Why should you use an attribution tool for lead attribution?
Today, prospects have countless touchpoints before becoming leads or customers. Without attribution tools, marketers cannot keep track of all these touchpoints, determine which of them deserve what amount of credit, and measure the performance of all their marketing channels. They either have to do all this laborious tracking or rely on their ad platforms’ attribution models. Unfortunately, these platforms don’t always have advanced tracking or analysis.
Using attribution tools saves marketers from arduous manual tracking or inaccurate modeling. These tools collect data on customer touchpoints, track prospects’ journeys and use this information to build either multi-touch or single-touch models. They offer integrations with your CRM, ad platforms, SEO tools, and email providers so that you don’t have to collect and integrate data from separate platforms and integrate them yourself. They can also cover the touchpoints across multiple devices such as desktop and mobile.
One of the biggest advantages of attribution tools is they show important touch points on dashboards with visual support. This way, you can see the performance of each channel, the metrics associated with the performance (such as the email open rate and conversion rate for your email marketing campaign) and improve customer experiences accordingly.
Things you need to look for in an attribution tool
When choosing an attribution tool for your business, there are various factors you should consider.
An attribution tool is not very helpful if it can’t collect data from the other tools and platforms you’re using. A good tool shouldn’t take long to integrate with your email provider or your CRM, and integrating your tools should be a no-code process. While researching attribution tools, see if they offer Stripe, Salesforce, Google Ads, Mailchimp, and similar popular software integrations.
Your attribution tool must also accommodate your business’s needs as it grows and evolves. So, you should choose a company that adds new integrations and updates its attribution tool to keep up with its customers’ needs.
Your attribution tool will access your users’ searches, clicks, and data. The attribution
tool you choose must be GDPR compliant and never share your users’ data with third parties. Cookieless tools like HockeyStack are safer and more secure as they don’t collect personal information.
Types of Devices Covered by the Tool
Some attribution tools specialize in mobile-only tracking, while others can track user touchpoints on multiple kinds of devices. As the tracking capabilities increase, the price also increases, so choose a tool depending on your business’s budget and customer profile.
There’s no perfect way to do lead attribution. The right attribution model will change from business to business. Most companies don’t have short cycles, so simplifying the user journey by looking at single touchpoints may be inaccurate for some. On the other hand, multi-touch attribution requires more resources and not all businesses have to use a complex model to reap the benefits of lead attribution.
So, trial-and-error is an inevitable part of the process.
However, an attribution tool can shorten this period as you can easily try out different attribution models, integrate different platforms, and use important marketing metrics to track progress. In the end, attribution is worth the effort as it improves your ROI, customers’ experiences, and the number of quality leads.
A lead attribution model assigns credit to prospects’ touchpoints based on their impact on lead generation. These models help marketers increase the ROI of their marketing efforts and optimize campaign performances.
Lead attribution is important because it helps SaaS companies generate more quality leads, increase ROI and improve customers’ experiences.