Understanding and improving your business’ sales can be impossible if you didn’t know how you were making them in the first place. The origin of your customers is incredibly important, though it can often be tricky to figure out exactly what pushed them to spend their hard-earned money with you.
This is where attribution modelling comes in. Giving you the chance to figure out what channel is responsible for your sales. This method of analysis has proven extremely successful for businesses of all sizes. Let’s take a look at how you can use attribution modelling to benefit your business.
What is Attribution Modelling?
Attribution modelling is used to determine which touchpoints should be credited for each of your conversions. This can be used to determine the value of each of your touchpoints, ultimately making it easier to figure out if you’re getting a positive ROI on your marketing spend. Not only will this enable you to save money on areas that aren’t making enough money, but it will also give you the chance to improve those that are successful.
For example, if you had a sales funnel that consisted of an online advert, a website with mailing list sign-ups, and a regular newsletter going out to users, but most of your sales are generated directly through your website, you could be wasting money somewhere. Your mailing list may not be getting enough sign-ups or your newsletters could be missing the mark. Using attribution modelling correctly will help you to build an understanding of what needs to be done to improve your marketing efforts.
Different Types of Attribution Model
There are several different types of attribution model out there, and they all offer a different perspective when you’re using them to assess your marketing work. There isn’t a best or worst model; they all offer something different, and it can be worth using as many as you can to ensure that you’re making the most of this. You can find some of the most common attribution models listed below.
First Interaction Attribution
First interaction attribution gives all of the credit for a conversion to the first touchpoint a user interacted with. This provides a simple and straightforward way to approach your modelling, though it ignores potentially important steps in the sales process, and this can make the data you get from it a little thin.
For example, if a user found your business through Facebook before making a purchase, the credit for this conversion would go solely to Facebook. The customer could have visited Facebook, seen an advert for your business, and deliberately searched for you by the time they actually make a purchase, though, and this shows that first interactions aren’t everything.
Last Interaction Attribution
Last interaction attribution is very similar to the last option, though you will be looking at the final touchpoint before a sale was made, rather than the first. This is the simplest model to use, and you may not need any special software to figure out the last interactions people had with your business before a conversion.
Last Non-Direct Click
The last non-direct click model is another similar option, only this one doesn’t include direct clicks or links that were made to your website. This can cut out confusing data that comes about when users are using bookmarks or visiting your website directly using the URL, but will still lack enough depth to give you an insight into your entire funnel.
Linear attribution models give each of the touchpoints in your funnel the same amount of credit for a successful conversion. This means that if a user found you on Facebook, clicked an advert, and then directly visited your site, you would have three touchpoints, and each of them would be given 33% of the credit for the sale.
Time Decay Attribution
Much like linear attribution, time decay attribution models include each of the touchpoints that lead to a successful conversion. Rather than giving them the same value, though, each touchpoint will be valued based on how close it sits to the conversion. In the example we used for linear attribution, this would make the direct visit to your website more valuable than the advert or social media visit.
Position-based attribution models are some of the most complicated out there. The first and last touchpoints will be the most valued, typically being given 40% of the credit. The remaining 20% will go to all of the touchpoints that sit between the first and last. This is a smart way to handle attribution modelling when you have a lot of touchpoints to deal with, as it recognises that the first and last points are always the most crucial.
Alongside these standard models, you can also look at designing your own. Splitting credit between your touchpoints based on their cost or the success they’ve had in the past can be smart, and this is something that you should consider updating as you learn more about the methods that tend to be the most valuable to you.
Using Google Analytics To Help With Attribution Modelling
Google Analytics is an incredibly powerful tool that can be used to monitor, track, and assess a huge range of data surrounding your business. By simply going to your Google Analytics account, you can head to the “Conversions” section and click on “Attribution”. You will have the option to use all of the different models we’ve covered in this post, and you can compare them with one another to figure out which makes the most sense for your business.
Of course, though, this will probably all sound quite complicated. A lot of people end up getting stressed when they approach this sort of work, finding it hard to know what they need to do at each step. Here at Hesk Digital, we can help you through this process, helping you to get to grips with Google Analytics and attribution modelling so that you can use it to improve your business.