HOW DO YOU ATTRIBUTE YOUR SALES?
HOW DO YOU ATTRIBUTE YOUR SALES?
By Chloë Thomas
One of the most complex areas of eCommerce is Attribution. Put simply attribution is the method of deciding which marketing channel was responsible for driving a sale – was it your email marketing? Your catalogue? Or your tweets?
It’s a complex area both because there’s not yet an obvious solution, and also because the debate itself is pretty hard to follow. So here’s my guide to eCommerce Sales Attribution.
History of web Attribution
Back in the day it was easy – we didn’t worry about it, we didn’t even know it existed! Sales did or did not come from our website – simple. Then as online marketing grew in importance the question of how to attribute the sales has become more and more challenging.
Many businesses still rely on either:
- First click model:
Allocates the sale to the first source that gets the customer to the website. So if a sale for £10 was referred by email and then twitter, email would be rewarded with £10. - Last click model:
Allocate the sale to the most recently tracked visit to the site. So if a sale for £10 was referred by email and then twitter, twitter would be rewarded with £10.
Both of these are inherently unfair if you have customers who spend time researching their purchases, and if you’re using lots of marketing channels to get them there. We’re now seeing more intelligent methods:
- Evenly Weighted Attribution:
The value of sales is divided equally between ALL the referring sources. So if a sale for £10 was referred by both email and twitter, both would be rewarded with £5. - Any Click (or Roulette!) Model:
The value of the sale is randomly attributed to one of the referring sources. So if a sale for £10 was referred by both email and twitter – one of them would be rewarded with £10.
These are better solutions, but again not great. Some companies are now developing custom attribution models that understands the relative impacts on sales of each channel – for example; email has a bigger impact than twitter. Those relative impacts are turned into ratios or percentages – so if email is 3 times as likely to drive a sale than twitter, our £10 sale would be allocated £7.50 to email, and £2.50 to twitter.
It’s safe to say there isn’t yet a consensus, or a particularly practical way through all this.
So why is Attribution Important?
Attribution basically solves the I-know-half-of-my-marketing-spend-is-wasted-but-I-don’t-know-which-half problem. So if you can get it right you’ll be able to fully optimise your marketing mix and greatly improve your return on investment (i.e. spend less on marketing, get more sales).
If you’re not looking at Attribution then you’re over-counting your sales, and spending on marketing that isn’t really working for you. And until you start using attribution then you can’t fix that.
It’s also critical to put in place the right attribution system, if you get it wrong then you’ll be making the wrong decisions and the business will suffer.
For one of indiumonline’s Mail Order clients we looked at the overlap between sales driven by their emails and sales driven by their catalogue mailings. The overlap was 80%, so 80% of the orders driven by email marketing could also be classed as catalogue orders – where should we attribute them? If we decided that the orders should all be attributed to the catalogue it would have been the end of the email marketing activity. If we decided that the orders should all be attributed to the emails, then the catalogue activity would have been greatly cut back – neither was the right decision. Its about a balance between the two.
What should you consider in setting up your Attribution System?
The first (and most important rule) is to keep common sense in mind – if the software you find to manage your attribution is going to cost £1,000 per month is it going to save or make you more than that? If not it’s not (yet) the right solution for you.
Just as there isn’t yet a one-size fits all model for attribution, there’s also not yet a one-size fits all software solution for it. You will find reasonably priced options for managing online attribution, but they won’t take into account phoned-in orders, or offline marketing so for smaller businesses it can be really hard to find a good solution.
I’d suggest starting off with what you’ve already got and work out how bad the problem is for you.
For a given period (say a month) you should know:
- Your total website sales
- Your total PPC sales (if you’ve got the conversion tracking feeding straight into adwords / adcenter)
- Your total Email sales (again, if you’ve got the conversion tracking feeding straight into your email reporting system)
- Your total SEO sales (in Google Analytics)
Once you have this information ask; do the marketing channels sales figures add up to a lot more than the website sales? If so you’ve got an attribution issue – if not then you can put in your diary to check again in a few months and forget about it for now.
Another useful place to look is on Google Analytics, the Assisted Conversions report (go to Conversions / Multi-Channel Funnels / Assisted Conversions). It shows you the common paths to conversion – so if lots of people click on a PPC ad, then an email before they buy. If you have lots of customers on long paths to conversion then you’ll need to be looking at Attribution and deciding how to allocate it effectively.
About the Author
Chloë Thomas is author of eCommerce MasterPlan, and runs online marketing agency indiumonline. You can get eCommerce MasterPlan at all good bookshops, on
Amazon.co.uk, and direct from www.eCommerceMasterPlan.com. Kindle and Apple electronic versions are also available.