What does revenue attribution mean?

Finding out how much of a company’s total income can be traced back to a specific source is called revenue attribution. Using sales and marketing automation to track customers’ behavior across all channels can help businesses link their marketing and sales efforts to new sales.

At its core, revenue tracking looks at the whole customer journey, from when they first hear about a brand to when they buy something, to find the sources that bring in the most money. Businesses can make the best use of their resources if they know how different marketing strategies and platforms affect growth in sales.

The revenue attribution process is essential for businesses because it helps them determine where their sales are coming from and which methods make them the most money. Since a sale may come from multiple places, properly tracking revenue is essential for making smart marketing choices.

Like words

• Marketing attribution of income
• Model for allocating revenue
• Pros of Attributing Revenue

The Report

Sales reports help businesses figure out how well their marketing is working. When they use revenue attribution, they can see how much money different marketing platforms and campaigns bring in. This gives them more detailed information for their lead generation and marketing strategies.

Let’s say a business has two marketing efforts: one that focuses on email marketing and the other on social media marketing. Revenue attribution lets them see how many sales each promotion brought in, while conversion tracking tells them how many leads each one brought in.

What if the email effort had a high conversion rate, but the average deal size was much smaller?

They could see this with revenue tracking.

Optimization and scaling of resources

Businesses can decide if their efforts are worth investing in by determining which revenue sources go with each.

If it costs a lot to get new customers through one marketing avenue, it must bring in more money to be worth it.

Businesses can determine which revenue sources are giving them the best return on investment and make changes to their marketing budgets based on this information.

Revenue tracking is even more critical as a business grows its marketing efforts. Spending tens of thousands of dollars monthly on the wrong channel could be wasted.

Lead-setting priorities

Spotio data shows that poor quality and a lack of leads are the biggest problems for almost half of B2B sales workers. Inadequate lead screening is the cause of about two-thirds of lost sales.

Reps spend only 28% of their time selling, and only 25% of marketing leads are good enough to move to sales. This shows two significant problems in the sales process:

The people on the sales team don’t have much time to work with their leads, whether they are qualified or not.

Leads that go through the filter aren’t getting anywhere.

The average salesperson only spends minimal time talking to good sales leads.

One of the best ways to score leads is to look at revenue attribution. This tells sales reps which leads are most likely to convert and how much money they could make, which helps them better plan their time.

Find out which channels are working.

An omnichannel method is used by almost all businesses to talk to potential customers. There are many ways to get leads, such as email marketing, social media, content marketing, paid social media, and organic search.

By tracking how much each customer interaction during the buying process adds to the overall revenue, revenue attribution helps businesses figure out what works best.

So, they can change their marketing mix by putting more effort into channels that bring in more sales and return on investment (ROI) and less into channels that don’t seem to make a difference.

Alignment of Sales and Marketing

A study from ZoomInfo found that up to 90% of salespeople and marketers think their tactics and cultures don’t match up. For B2B businesses, this costs them at least 10% of their annual sales.

Revenue attribution bridges the gap between the marketing and sales teams by linking specific actions to approved leads and sales. Teams from both departments work together to make more sales. For example, marketing runs better programs that bring in actual marketing-qualified leads (MQLs) for sales.

Learn how your customers act.

Revenue attribution is the most accurate way for marketers to determine where potential customers use business content, goods, and services. This makes it easier to divide customers into groups so that marketing campaigns can be more targeted with material and messages.

Best Practices for Attributing Revenue

Revenue attribution is a much better way to measure how well marketing is doing than its cousin, lead conversion rate. But because there is so much data and research, it is more complicated. That is why best practices are so important.

Pick KPIs for attribution to keep an eye on

Revenue attribution KPIs are essential measurements showing how well a business’s marketing works. These are the most important KPIs:

Value over a customer’s whole life

Cost of getting a new customer (CAC)

LTV-to-CAC ratio

How many leads were made?

• The most common deal size
• Engagement rate and how quickly customers can be helped
• Length of the sales cycle
• Money made from each tip
• Rate of MQL-to-SQL exchange

Rate of turn from lead to sale

Remember that for revenue attribution to work, marketing teams need to look at each metric on a campaign-by-campaign level. The company’s general numbers will only give you a broad picture of performance, not the detailed information you need to make the connections.

Because no single marketing effort will turn a lead into a paying customer immediately, B2B companies need to keep track of many different performance metrics. A sale usually takes longer than six months, and there could be as many as fifty sales and marketing touches that need to happen.

Link your sales and marketing channels.

Having all connections connect is the best way to get sales and marketing to work together.

It’s straightforward to keep a steady flow of customer data showing how one action leads to another. All you have to do is connect CRM, marketing automation, and sales tools.

Link your marketing efforts to your company’s objectives.

It’s not always clear that a marketing exchange means more money coming in. Marketers need to keep an eye on each campaign and follow each lead through the sales funnel to ensure they correctly link each new source of income to the right action.

Again, integrating systems can help with this. When data from marketing automation (like conversion rates) is combined with CRM updates (like sales flow changes), teams can better see how each action affects the whole.

Automate your revenue attribution.

Revenue intelligence software takes in customer data from all stages of the sales funnel and puts it together into detailed reports showing how customers interact with marketing materials.

It’s then easy for businesses to see which campaigns affected ROI and make intelligent choices about their marketing mix going forward.

Models for Attributing Revenue

There are many income attribution models that connect the cost of getting a lead to the money made from that lead. Which one works best for a business depends on how hard it is for customers to buy something.

Attribution for the First Touch

First-touch income attribution is a way of figuring out which touchpoint brought about the sale or conversion. This method is based on the idea that the first time you talk to a customer about your product or service is the most important because it makes them aware of it and gets them interested.

The first-touch model works best for businesses with easy-to-use buying methods and short sales cycles, like direct-to-consumer (DTC) e-commerce brands. It can help you figure out how well your top-of-funnel marketing is doing at getting leads and getting people to connect with you at the beginning. Still, it doesn’t look at any interactions that may have happened after that that might have changed the prospect’s mind about buying.

The Last Touch of Attribution

The last-touch income attribution method is the opposite of the first-touch method. It only credits the last sales or marketing touchpoint with the customer before they purchase for the sale or conversion. The last interaction is often the one that directly leads to the choice to buy, so this method stresses how important it is.

While it doesn’t give a complete picture of the sales cycle, this model can help businesses figure out how well their bottom-of-the-funnel marketing efforts, like retargeting ads, personalized email promotions, or sales outreach, are working.

It’s also simple to set up and keep track of, making it popular with companies new to revenue attribution or who don’t have the money to spend on more complex models.

Adding Multiple Touches

Multitouch revenue attribution is a more advanced model that gives credit for a sale or conversion to more than one marketing channel that the customer interacts with, from becoming aware of the brand to making a choice. The multitouch method considers how different touchpoints affect each other and gives a complete picture of how well each marketing channel works.

Multitouch attribution models work best for businesses with complicated sales processes or long sales cycles, where a prospect’s buying choice is affected by more than one interaction.

Differential U-Shaped Multitouch Attribution Based on Position

U-shaped multitouch attribution, called position-weighted attribution, gives 40% of the sale credit to the first and last touchpoints in the buying process. The other 20% is split equally among all the other touchpoints.

With position-weighted attribution, the touchpoints that make the customer aware of the brand for the first time and those that close the sale are given the most credit.

For companies that want to know how successful their top- and bottom-of-funnel marketing campaigns are while also understanding the role that lead nurturing plays in the conversion process, U-shaped attribution is a good choice.

Multitouch Attribution in the Shape of a W (Score-Weighted)

The W-shaped multitouch attribution model, which is also called score-weighted attribution, gives credit to three crucial points in the customer journey:

The very first touch

When they turn into lead

When they have a chance to make a sale,

Each critical milestone gets 30% of the credit, and the other 10% is split equally among the other touchpoints.

Score-weighted attribution raises the importance of the “most critical” steps in the sales process while recognizing that smaller events play a part in the result.

Businesses that want to know how well their marketing efforts are moving prospects through the whole sales funnel, from the awareness to the decision-making stage, should use W-shaped attribution.

The Linear Attribution

Linear attribution gives equal credit to all contacts in the buyer’s journey for a sale or conversion. It considers what each interaction adds to the whole without giving any stage of the buying choice process extra weight.

This plan works well for businesses that think each touchpoint is as essential as the last when getting people to buy. It can help companies find patterns in their marketing and get a general idea of how well their campaigns are doing overall.

However, linear attribution doesn’t show how critical key moments or interactions have many effects on the buying process. A multitouch attribution approach with more details might work better for businesses with more products or more complicated sales.

Attribution of Time Decay

Time decay attribution is a way to determine which ming touchpoints contributed to a sale or conversion, with the most recent contacts gaining more weight. Using the time decay method is based on the idea that each touchpoint has a more significant impact on the end decision as the prospect approaches making a purchase.

Verticals with longer sales cycles, like B2B manufacturing, gain the most from time decay attribution. This is because prospects usually interact with many marketing channels and touchpoints over a long period. However, businesses that want to measure efforts that bring in leads or customers will have to do thiHowever, differently.

How to Choose the Right Revenue Attribution Model

The best revenue attribution model for your business will depend on how complicated your sales process is, how long your sales cycle is, and which marketing channels you choose.

To make an informed choice, consider your business’s specific wants and goals and the tools you can use to track and analyze your marketing efforts.

Choose first-touch attribution to see how your top-of-funnel marketing efforts help generate leads and get people to connect with you.

Last-touch attribution: If you want to find out how well your bottom-of-the-funnel marketing is working at closing deals, choose the last-touch way.

Linear attribution: Choose this method if you think every touchpoint has an equal impact on a prospect’s buying choice.

This type of multitouch attribution is U-shaped and is used to determine how well both top-of-funnel and bottom-of-funnel marketing efforts are working while considering the role of nurture activities.

W-shaped (score-weighted) multitouch attribution: This is the best way to see how well your marketing campaigns are moving prospects through the entire sales funnel, from becoming aware of your business to making a decision.

Time decay attribution: This method is best if your sales cycle is longer and you want to see how marketing efforts in the later stages of the sales cycle affect conversions.

Needs for Revenue Attribution Technology

Companies must meet specific requirements before effectively setting up and using income-attribution technology. These rules ensure companies can correctly monitor and study their marketing efforts and get helpful information from their attribution models.

Strategy for All Channels

An omnichannel strategy for revenue attribution is essential because it lets businesses keep track of how customers interact with them across all platforms and touchpoints.

Revenue tracking technology won’t help small businesses that don’t have a lot of data sources because they can easily track it themselves for less money.

Clear paths for sales and marketing

Companies with clear sales and marketing paths tend to do better with revenue attribution as they grow.

These companies can easily find and keep track of the different touchpoints during the buying cycle. This makes attribution research more accurate and useful.

You can still use revenue attribution for lean businesses, like startups and ones with only a few employees, as long as your customer groups are different enough that you can divide them into different attribution models.

A clear picture of the customer journey

Companies that don’t fully understand the buying process won’t know what success indicators to look for.

Customer journey mapping is the first thing that makes sense for businesses that want to use technology to track sales and link them to suitable marketing activities.

CRM or a tool for keeping track of customers

For all the information about customer interactions, sales, and marketing efforts to be kept in one place, you need a customer relationship management (CRM) or customer data tool.

So, it’s easy to get to all the essential data that can be used for a total revenue attribution study.

Tool for Analytics

Suppose you have an analytics tool to track a customer’s journey across different platforms, like website visits, form submissions, and email engagement. In that case, you can see how each marketing touchpoint affects conversions and revenue.

Companies don’t need to buy extra analytics software because most marketing automation tools already have some analysis built in.

However, some companies might find it helpful to buy more advanced intelligence tools made just for income attribution.

Platforms for sales and marketing that can work together

The software a business picks for income attribution must work with the rest of the workflow. If not, the data won’t be correct, and the study won’t show anything useful. It could be wholly siloed in the worst case.

How to Measure KPIs

Knowing which metrics are the most important to measure before you start using income attribution is essential. This makes things more transparent, which helps companies focus on the most critical metrics and ensure their attribution work fits their general marketing goals.

Whole-Company Adoption

Getting the whole company to use revenue attribution is essential for changing the general data culture and getting the whole company to adopt it. When everyone involved in a business knows how vital and valuable income attribution is, they can make marketing and decision-making more data-driven.