Shopping patterns aren’t as simple as they use to be. With the advent of new digital channels and technology, shoppers have become more sophisticated and have shorter attention spans — adding a healthy dose of complexity into once linear customer journeys. On average, it takes 56 touchpoints for a customer to make a purchase, which is why the industry has made a shift towards more comprehensive forms of marketing measurement.
Multi-touch attribution models have become the new gold standard for determining appropriate credits for customer touchpoints. An important part of your overall e-commerce marketing strategies, multi-touch attribution enables marketers to gain a better understanding of how different channels and interactions contribute to the marketing process. Though multi-touch has generally been accepted in recent years as superior and more accurate than first-touch and last-touch methods of attribution, how each touchpoint is credited can vary depending on your organization and goals. Here are some key considerations for designing effective and customized multi-touch attribution models.
Determine Your Multi-Touch Attribution Models & KPIs
First, it’s important to determine which multi-touch attribution models work best for your company, and determine appropriate portional credit for each touchpoint. You can choose from several standard models or create your own from scratch. The option you select should be informed by variables such as the length of your sales cycle, the types of campaigns you are running, and your KPIs.
1. Linear attribution is the simplest form of multi-touch attribution. It assigns conversion credit evenly across each touchpoint in the customer journey.
2. Time decay gives more credit to the touchpoints closest in time to the conversion. For example, the last email before a purchase/conversion is given more credit than the first organic search.
3. Position-based / U-Shaped is a hybrid between first- and last-touch attribution. This method puts more weight on the first and last touchpoints, assigning 40% credit to each, and splitting the remaining 20% between the touchpoints in the middle.
4. W-Shaped credits the first touch, the point where a visitor becomes a lead, and the final touch each at 30%. It divides the remaining 10% among any additional touchpoints.
Some advanced multi-touch attribution models leverage machine learning to assign partial or incremental credit to predict the value that each touchpoint added. You can learn more about algorithmic multi-touch attribution models here.
If none of the out-of-the-box rule-based models make sense for your company, you can create a custom model. This approach allows you to set the weight and significance of each touchpoint based on considerations unique to your business. Custom models allow you to account for idiosyncrasies in your customer journey to optimize your ad budget allocation.
Choose Software that Fits for Your Needs
Consider software tools that manage and track complicated multi-touch attribution models. Useful tools will include an analytics dashboard that is easy to use and understand, as well as a reporting mechanism that offers both high-level and granular detail about the performance of each channel and touchpoint.
Even better, look for solutions that offer a dedicated attribution dashboard that helps you see how customers behave and interact with your brand, across multiple channels. Having a centralized dashboard provides the accurate insight needed for cross-channel analysis. Remember, data by itself is inherently useless — driving to actionable insights is the ultimate goal for any business.
Apply Customer Insights & Continue to Optimize
Test, analyze, and optimize your attribution model. Multi-touch attribution is not a set-it-and-forget-it activity. For it to be effective, it’s critical to adopt an ongoing learning process that informs your marketing efforts and helps you to refine your attribution model to ensure that you reach the right consumers at the right time.
As you gain insights from the model, apply the lessons learned to further customize your attribution model, and refine it for maximum success. According to McKinsey partner, Kelsey Robinson, as your company becomes more comfortable with multi-touch attribution models, you may want to run several at a time to see which campaigns generate the best results at the top, middle, and bottom of the funnel.
Robinson says, “The purpose of multi-touch attribution is to help marketers invest in those experiences that are proven to drive growth…the reality is that marketers tend to have an incomplete (even false) understanding of what motivates their consumers. Multi-touch attribution models can help them understand to a much greater degree of certainty what role certain marketing exposures have on broad and deep segments of consumers.”
With the help of multi-touch attribution models and a tailored approach to crediting each touchpoint — from first discovery until close — your company will be on its way to maximizing revenue growth and gaining a deeper understanding of the most critical interactions that your organization has with its audience.
As with any data model, it’s important to remember that the ultimate goal is to gain a better understanding of the intersection between the customer and your business. This level of insight gives savvy marketers a leg up when improving customer experiences, and ultimately, increasing customer lifetime value (CLV). With the constant influx of new learnings and findings, it’s an absolute must to keep close tabs on what is and isn’t resonating to ensure the bond between customers and your business strengthens over time. Customers crave positive brand experiences more than ever before, with 55% of US shoppers stating that they would stop buying from a brand after a single, bad customer experience.
As a result, there is no such thing as “set it and forget it.” Successful marketers are constantly deepening their insights into data and leveraging it to test their marketing. A testing framework built on a strong foundation of key learnings will do wonders for your marketing, customer relationships, and bottom line. This is why taking advantage of advancements in tooling, like adopting a multi-touch attribution model, are so important to building better and stronger brands.
Are you new to the world of marketing measurement and looking to broaden your knowledge of attribution? Check out our beginner’s guide to help you get started.