Most marketers understand that revenue attribution is necessary for optimizing future marketing efforts, but fear the complexity of the process. The good news is that for most digital marketers, there are several easy options for incorporating revenue attribution into your reporting.
Since revenue attribution is an imperfect science, savvy marketers use multiple attribution models to gain a deeper understanding of marketing campaign performance. With that in mind, let’s examine four easy methods that marketers can use to evaluate the role of email (and any channel) in driving online purchases.
1) Open-Based Revenue Influence
An influence-based attribution approach takes the view that it’s difficult to give one marketing interaction or campaign more weight than another. In other words, if a customer opens three emails within 24 hours before making a purchase, how do you truly know that a particular email was more effective in generating the sale? Open-based revenue influence gives all mailings that were opened prior to purchase equal credit for driving the sale
How to implement: Identify any emails that a customer opened prior to making a purchase. For any open that occurred within a typical sales cycle (three days for many retailers), give that email a proportional amount of credit for driving that purchase. For example, let’s say Jane opens three emails in the three days before making a $100 purchase. Each email would receive about $33 in revenue attribution for driving the sale.
2) Last-Open Revenue Attribution
This method only gives revenue attribution to the last mailing opened before a customer made a purchase. The logic? Since this is the last email interaction with the customer before making a purchase, it’s responsible for driving the sale.
How to implement: Identify the last email a customer opened before making a purchase. In the previous example, the final email Jane opened before completing her purchase would receive $100 in revenue attribution. Remember: You’ll want to make sure the open occurred within that three-day sales window. You don’t want to attribute revenue to a mailing opened 90 days before a purchase.
3) Click-Based Revenue Influence
In this model, any email that was clicked prior to the purchase will receive an equal share of credit for generating the sale. The rationale for using a click-based influence model versus an open-based one is that many marketers consider an email click to be a stronger signal of customer interest and purchase intent than an open.
How to implement: Identify any mailing that was clicked on within your sales cycle (e.g. three days). In the example with Jane, if she clicked on three different mailings before making a purchase, each mailing would receive approximately $33 from a $100 purchase.
4) Last-Click Revenue Attribution
With a last-click model, the mailing that received the last click prior to a purchase would receive revenue credit. Marketers have readily adopted this model, as it treats the final click as the event that propelled the customer to purchase. Many marketers also feel it’s the cleanest and most simple attribution model to implement. However, critics argue that it ignores prior customer interactions that may have led to the purchase.
How to implement: Identify the last mailing that was clicked on prior to a purchase. Give that mailing full credit for the sale. In Jane’s case, the last mailing she clicked on would receive $100 in revenue attribution. Any other mailing she clicked on would receive $0 in revenue credit.
While revenue attribution is a complex science that should ideally include customer interactions from channels outside of email, these basic techniques provide an easy framework to get started. Once you are comfortable with one of these models, you can use a combination of these techniques, plus others, to create an even sharper picture of marketing’s impact on revenue.
Ready to dig even deeper? Download Silverpop’s comprehensive guide to revenue attribution.