Customers are the single most important part of your business. The customer satisfaction definition is how happy your customers are with your products or service. An increase in customer satisfaction leads to more revenue. But, before all of this, businesses need to actually acquire customers.
You could have the best product and the highest satisfaction rate, but if you only have one customer, then your business will suffer. Customer attribution is a crucial aspect of marketing that allows you to evaluate whether or not your marketing efforts are paying off.
In this article, we will be exploring what customer attribution is, why it’s important, and what the best practices are.
Customer attribution is also known as marketing attribution. Essentially, it is the process of attributing success to specific marketing channels and customer touchpoints. This involves analyzing your existing marketing touchpoints and finding out which ones are most effective at acquiring customers and increasing conversions.
For example, let’s say that you’re a business that provides companies with advice on “Digital Customer Service Channels: How to Improve Customer Experience”. Here, you would collect, observe, and analyze your marketing and sales data. The aim is to find out which one of your marketing channels, such as email, social media, traditional, etc., is garnering the most customers and conversions when sharing your advice.
This is crucial because it allows you to ensure that your marketing budget is being distributed correctly. So, if, for example, social media is your biggest pull, you can increase the number of campaigns that you annually run.
Customer attribution data is an invaluable source of information for marketers. Here are some of the main reasons why:
Having unexpected customer attribution metrics isn’t just a sign that your marketing needs to change, but it also indicates that you need a better grasp of your customer base.
Consider this scenario. You’re a company that creates customer service email templates for small businesses. Redirecting your funds from social media platforms like TikTok, which have a younger audience, to LinkedIn can increase customer acquisition. Keeping track of customer attribution can provide you with this insight.
Following on from the point above, the more you understand your customer, the more you can personalize their experience. This is vital as customers want to feel and be treated like a human being instead of a number on a database.
Obtaining these data points and metrics allows you to improve your knowledge of the customer journey. For example, this can provide information about the customer’s preferred method of interaction, such as email, phone calls, or social media direct messaging.
Customer acquisition is an expensive process. Everything from marketing campaigns, discounts, free trials, etc., can be very costly. Having customer attribution data allows you to optimize your practices and stretch out your budget to its full capacity. Crucially, it lets you know which techniques you can also discard.
Now that we understand why customer attribution is essential, let’s look at the most common models used to attribute credit for a customer’s purchase.
1. Single touchpoint customer attribution.
This is the process of attributing all the success to one touchpoint.
2. First touchpoint attribution – this is when marketers give all the credit to the first touchpoint. This can include using a cold call script to get appointment setting right or a cold email to advertise your new product.
3. Last touchpoint attribution – this is the opposite of the point above. It assigns success to the last touchpoint and disregards the efforts of any previous customer engagement or interaction with other marketing channels.
The multi touchpoint model takes into consideration all the touchpoints across a customer’s journey to conversion. This includes everything like traditional ads, social media, newsletters, seminars, webinars, and email.
1. Linear model – this method attributes equal success to all the touchpoints. For example, if monthly revenue was £10,000 and there were five touchpoints, then credit of £2000 or 20% would be assigned to each marketing channel.
2. U-shaped model – this process is a combination of the single and multi touchpoint methods. It still puts emphasis on the first and last touchpoints, which are both assigned 40% of the credit. The remaining 20% is distributed equally amongst the remaining touchpoints.
3. Time decay model – this type of attribution is skewed in favor of recency. This means that the marketing channels that were interacted or engaged with closest to the conversion time are attributed with the most credit.
Of course, with everything in business, there is no one-size-fits-all answer. Successful companies will analyze and carry out the practice that best suits their marketing strategies. You can use tools or even trial and error to reach a conclusion.
Marketing is your direct method of communication with your customers. This is why you must continue to optimize your strategies. Customer attribution data allows you to ensure that your marketing is as efficient and effective as it can be.