Order Attribution: Giving Credit Where Credit is Due
Attribution management, the science of calculating the contribution of a marketing touchpoint conversion, brings science and reason together to answer the age-old question: What caused a customer to make a purchase? The answer to that question plays a significant role in enhancing the quality and effectiveness of interactions that retailers have with customers and prospects, which translates into increased return on investment. Attribution is even more important these days, as corner offices are closely watching marketing teams, which are operating with tighter budgets, to see if spending is being accurately assigned.
However, despite its importance, many retail marketers simply don't understand attribution management. According to a recent Google Analytics and Econsultancy study, 72 percent of client-side marketers said that attribution leads to better ROI, but a lack of understanding on the topic is hindering widespread adoption. More than 40 percent of survey respondents say a barrier to attribution is being unsure of how to choose the appropriate model or weigh potential advantages.
To get more insight on the value of effective attribution management, Retail Online Integration hosted a "virtual roundtable" with three leaders in the industry: Bill Bass, the co-president and chief marketing officer of Orchard Brands; Kathy Doyle Thomas, executive vice president, Half Price Books; and Howard Wyner, CEO, Scentiments. (Thomas and Wyner are also member's of ROI's Editorial Advisory Board.) Here are highlights from our discussion:
Retail Online Integration: What's your current attribution model?
Howard Wyner: We use a linear model based on the interactions our customers have with different channels — email, SEO, PPC, retargeting, social media, shopping cart abandonment. You have to be where the eyeballs are … or where potentially they can be. We know that there might be some assistance from each process to get them to come back to make a purchase. They may have clicked on an ad, left, then saw a retagged ad, then came back to the site and abandonded their cart, then maybe saw an email the next day from our shopping cart abandonment program, and then eventually made a purchase. We want to give credit to each process rather than just giving it to the customer's last touchpoint. We give credit where credit is due.
Kathy Doyle Thomas: We worry about all aspects of our marketing program. It's really no different than it was in the old days when we were trying to figure out whether the TV or radio spot worked. We're constantly wondering what's actually driving customers to make a purchase, be it online or in our brick-and-mortar stores. We're constantly measuring this stuff, and we can do this because of all of the research and analytics available today. The challenge is trying to figure out how to digest it all and make it into a workable plan
Bill Bass: The key thing here is a feedback loop — trying to understand what are the things that drive customer behavior, then spending money around those things. The problem that you run into is that for any modern brand you have multiple touchpoints with customers, and every touchpoint is a marketing opportunity, whether it's an email, a customer coming into the store or interacting with a customer on the phone. There are a number of slices in the pie. The attribution models that have come up are relatively unsophisticated, so you end up attributing the sale to the last touchpoint. We spent a fair amount of time trying to be more sophisticated around this. We wondered whether what we had was adequate enough, and we actually came to the conclusion that it was. Simplicity is one of the great things in life.
ROI: Is thinking about the future part of the allocating equation for you or is it more present tense?
BB: We think at least one year out, but really we try to think three years out. The big question you try to ask yourself is given where we are now, are there likely to be major shifts in where we're going to spend our money? For example, the role of mobile. Should we allocate more money into mobile or do we feel that it won't grow from where it is now? There are a lot of companies asking themselves that question. The same goes with social. There are a few buzz topics that come along and you have to sit there and say if mobile gets big or if social gets big, where am I going to reallocate those dollars? You have to pay attention to what's coming down the pike.
KDT: We do have to pay attention, and yes we have to devote dollars to social and mobile, but we don't even know what's next. We all know there will be another Pinterest or Twitter, something that we'll have to do, and we'll have to be nimble and flexible enough to make that happen. We're constantly trying to figure out a plan and react to the marketplace.
HW: I agree you have to be nimble and quick. Past results don't always equate to future performance because you don't know what the trends are going to be. You have to keep your pulse on the marketplace and really be aware of what the trends are going to be. You have to be ready for anything.
BB: One thing I've noticed though is if you go back and look at where our marketing dollars have been spent over the last five years, there haven't been major shifts. It hasn't changed tremendously. It's always interesting because it's exciting to see the new categories, but as to where dollars get spent, it's still email, search, catalogs — all of your traditional elements.
KDT: I think where our dollars are being spent hasn't changed, but the amount of time, resources and human energy have been distributed differently over the years. We spend more energy on 3 percent of the budget. We spend more time on brainstorming, for example, than we do on the next radio spots. So even though the dollars haven't changed, the human resources and time have changed.
ROI: What are your biggest challenges around attribution?
HW: Making sure we stay consistent through all of the touchpoints. Throughout the process we want to make sure our messaging is clear and that we're not losing our message within whichever marketing channel we're in. We try to make sure, whether it be through social, retargeting or email, that our message stays within the realm.
KDT: It's a constant challenge to figure out the creative and make sure the message is consistent, clear and direct. It's the coordination of it. I have to ask myself, "is my brick-and-mortar customer really so different from my online customer?" And yes, they are that different. The online customer doesn't necessarily want the same experience as the brick-and-mortar customer does, so I have different messages. One might say "Come on in and browse for an hour," and another one might say "We can get your books in and checked out in a matter of seconds." So it's a balancing act — which can be tough.
BB: What's really hard is figuring out the interaction effects between touchpoints. If we try to reach a customer through email or catalog and they find us through search, we wonder if the whole is greater than the sum of the parts. It's a little bit like a soup. You have all of your different ingredients, but it's how they interact with each other that makes the soup taste good. If you take one of the ingredients out, all of the sudden the soup tastes bad.
ROI: What are your biggest successes around attribution management? For example, were you able to improve a marketing program that wasn't working as a result of attribution?
KDT: After analyzing a direct mail campaign we launched in March that tied in with our brick-and-mortar stores and email campaigns, sales increased 20 percent. We looked at when the direct mail campaign fell, tied it in more with our "Spring Break" campaigns, and moved the Wednesday and Thursday percentages around. We were very strategic about it and ended up having a very good March. I think you may want to go with your gut, but you need to look at the analytics. By tweaking and changing just a few things, you can have a really big impact.
HW: After doing some analysis, we recently started leveraging all of our customers in our loyalty program. We sent out a March Madness campaign, for example, and leveraged that sale by providing double bonus points or a free gift to our loyal customers. We started seeing lots more increments of revenue and higher average order values as a result. Basically, we've decided to be more aggressive on the points distribution, giving customers more opportunities to come in and buy.