Tracking the Cost of Sales and Marketing: Fresh Thinking
Time is money, so they (still) say, and we all want to spend our time on the activities and channels that we trust to deliver results. If this is something you’re thinking about right now, Ruth P. Stevens’ recent post on attribution is worth a read. I’ll summarize it here, and you can read the rest of it on Target Marketing for a deeper dive.
The overarching big questions are:
- How do my prospects buy, and how can I make their journey easier, faster, and more likely to result in a sale for my company?
- What’s the ROI on the sale, meaning how much sales and marketing investment do I need to close the piece of business?
In online digital marketing, marketing attribution analysis is useful, and it’s possible in a way that’s harder in the offline world. The four main techniques used are:
- First touch, last touch: Credit for a sale or conversion goes to the media channel that acquired the prospect (the first touch) OR the channel immediately before the outcome (the last touch). B2C may look more to last touch; B2B to first touch, as that information supports where to spend prospecting dollars.
- Weighting: All recorded touches are weighted equally, or according to some factor that has influence (such as where they occur in the funnel). In complex B2B cycles, which involve serial touches to multiple contacts through multiple channels (some perhaps offline and hard to capture), this can get murky.
- Modeling: Statistical analysis of purchase patterns against touch sequences can show high-level trends, but doesn’t help much with on-the-ground decisions about how best to construct a series of touches. Few B2B marketers are doing this.
- Test and control: The most reliable method of sorting out the impact of an isolated single variable. But the real world is a messy, difficult place to do research.
Ruth goes on to conclude that because the B2B marketer operates in such a complex environment, “a zillion touches are going to go into the selling process.” She recommends not trying to track credit for every single touch, but applying attribution analysis to two more important concerns:
- Gain insight into the buyer’s journey: Not for assigning credit to any particular touch, but for understanding how better to identify prospects, engage with them, build a relationship, fend off competitors and get the sale, faster. Note that “buyer” means an account, not an individual contact.
- Evaluating and improving the cost of selling: Track marketing and sales expense by account, and then analyzing the data by product type, by industry and other variables.
Ruth ends by underlining that these last two practices—understanding your buyer’s journey and understanding the expense of gaining an account by sectors you can invest in are where attribution analysis can really add value in B2B.
What’s your experience? Do you have tracking or attribution methods that work particularly well for you? Let us know, in the comment section below.