Channel Attribution: Which Half of Your Budget are You Wasting? (An Interview with Full Circle CRM CEO Bonnie Crater)
Remember John Wanamaker? At the turn of the 20th century, he famously said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
This is still one of the toughest challenges for marketers today: figuring out which campaigns are the most effective at driving revenue. So, we decided to sit down and talk to a company trying to solve that problem by developing better tools and more accurate reporting.
Full Circle CRM was founded in 2010, by former Salesforce executives, product managers, and experts. Here’s what Bonnie Crater, their CEO, has to say about the state of channel attribution, data models, revenue prediction, and Salesforce.com tools in general.
glassCanopy: What sorts of marketing challenges do you see CMOs and VPs of Marketing struggling to address?
Bonnie Crater: Marketing is rapidly evolving as a discipline. Many marketing organizations are experimenting with new program types, and are tasked to effectively implement all sorts of new marketing technologies — like marketing automation, social listening tools, and content generation tools — and then integrate those tools with their CRM systems.
It’s rare to see any organization that is completely satisfied with the use of all of their marketing tools and those tools’ integration with their CRM systems. It’s also rare to find one that has the perfect data model setup. This is in part because not only is the technology rapidly changing — but many marketing processes are as well. With the ability to track so much marketing data, many marketing executives are often now being asked by the CEO or other executives to provide insights into exactly how marketing contributes to revenue or other KPIs that used to be almost exclusively tracked by sales. Because there is so much more data being tracked and measured, or pushed to and from multiple software solutions — marketing teams are challenged to parse through all the information to identify gaps in the data, or to gain critical insights.
gC: We’ve heard you talk about “tough questions” that marketers face. Can you give us some examples, and how marketers are dealing with them?
BC: Some examples of tough questions that marketers face are:
- How have your programs contributed to won revenue or netted new leads?
- Why should you be given a higher budget for program X?
- Why hasn’t this trade show provided our company with any return on investment?
The only way for marketers to deal with questions like these is by having the data to prove the results of their campaigns. Our customers are leveraging Salesforce to show exactly how marketing contributes to revenue by many different criteria (e.g. influenced revenue, net new leads generated, etc.). Leveraging Salesforce (or whatever CRM system a company is using) to track marketing metrics works best, because the sales and executive teams are already using the CRM system as the system of record to make decisions.
Sales management doesn’t check the marketing automation tool to see what happened to a specific campaign — they want to know how it affects their operations in Salesforce regarding new prospects to follow up with.
gC: When it comes to multi-channel attribution for campaigns, what is the biggest misconception you hear when you talk to clients about it?
BC: One of the toughest challenges for marketers is figuring out which campaigns or campaign types (such as email campaigns vs. trade show campaigns) are the most effective at driving revenue. CRM or marketing automation tools attribute revenue in one of three ways:
- Assign one campaign to a closed deal (often the first touch and sometimes last touch);
- Associate the total deal value to every campaign associated with the deal, so that you get double and triple counting; or
- Associate equal value to every campaign that touched that opportunity
More specifically on point #3, many marketing automation systems can track every campaign or touch that was associated to a deal; but does a sales email that someone opened and immediately deleted deserve as much credit as a webinar that same individual attended? Most of the time it does not. Which is why we strongly believe in leveraging weighted campaign influence models to understand which campaigns actually play a role in closing deals and driving revenue. The common misconception is that it is enough just to see all the touches, when in fact you really need to understand the value of each touch — not just that it happened.
gC: Typically, when you first start working with clients, do they have a good understanding of things like lifetime value of the consumer and channel attribution weights? When they do understand it, are they leveraging these concepts in a meaningful way? Do you see a big difference in the marketplace in terms of how sophisticated some subsets of customers are dealing with these issues versus others?
BC: Our clients are actually pretty sophisticated when it comes to tracking and measuring their marketing efforts. They are the marketing scientists who have been seeking a way to accurately measure and track their marketing impact. Our clients are also able to discuss their processes and the value they attach to their different channels. Using Full Circle CRM, they leverage the data to optimize their marketing spend.
In terms of customer sophistication in different market segments, again, pretty much all of our customers have a strong understanding of marketing technology and what is going on in today’s digital marketing world. There has to be a certain amount of measurement and processes already in place for organizations to be ready to implement a solution like ours that provides enhanced marketing metrics.
gC: Can you tell us about the different kinds of attribution models and how important it is (or isn’t) for marketers to understand them? Do you think most marketers can use a standard attribution model or should they be developing or tweaking a custom one to suit their own business issues? Should they use more than one? How often and how much should marketers be thinking about this?
BC: Every company is a little different; so, we have found that the best way to track revenue attribution is by leveraging custom models that best fit each company’s unique business practices. That’s why we believe that using multiple weighted campaign influence models is the best way to attribute revenue for most companies. Weighted campaign influence enables companies to build multiple models and provide unique weights to each campaign type, channel, account type, etc. Having the ability to see multiple models running at once, along with the output data, enables marketers to hone in on a model (or models) that work for them, and then re-optimize their marketing mix appropriately.
Once models like these have been running for a while and have been refined, it is still important to continue to revisit those models from time to time, because the surrounding business environment doesn’t stay static. So, it is important that you let your attribution models grow and change with your company and the corresponding business atmosphere.
gC: What is the most dramatic example you can give for a client switching away from a last touch attribution model to a custom attribution model, in terms of more accurate data, better decision making, and/or ultimately higher sales?
BC: Many of our smaller clients who are just leveraging Salesforce and do not have a marketing automation solution in place are only able to track revenue attribution on the last touch campaign. They realize this is not the best way to do it, but don’t really have any other options. In situations like this, they have no visibility into what is actually driving revenue from the marketing side; so, they are unable to accurately determine what programs help their business or have no effect. They understand this is an unsustainable model, which is why they want to switch to something more robust. Once they move towards a custom attribution model that is able to track multiple touch points and differentiate between the value of those touch points, they are able to see what truly impacts revenue and plan accordingly.
For example, one of our customers has a white paper that they thought had no impact on sales. In fact, there was even discussion to discontinue the use of that white paper as an asset. Once they implemented and ran a few weighted campaign influence models, they realized that this white paper actually plays a critical role in progressing deals through the funnel, and influences hundreds of thousands of dollars in revenue. Almost every single closed deal had this white paper attached to it as a critical campaign that progressed leads further down the pipe into opportunities. However, it was on the chopping block, because it was an asset that was usually viewed earlier on in the buying cycle — and because it was not the last touch campaign attributed to closed opportunities, it was believed that the white paper was worthless.
gC: You talk about the handoffs of leads between marketing and sales departments being a place where things often fall down. Can you expound on that briefly, and discuss how removing this friction point can increase return on marketing dollars and/or sales? How significant of a bump do you see?
BC: As we have discussed, marketing and sales generally operate in two different systems: marketing in marketing automation and sales in CRM. So, the marketing funnel is tracked separately from the sales funnel. Because there are two different systems, and the data is tracked differently in these two different systems — invariably, the data doesn’t match up between them. This creates general friction when sales and marketing teams are trying to work together.
The marketing-sales handoff is often a point of friction, because of the lack of visibility into a solid system of record. By measuring the entire demand generation funnel in one place (like Salesforce), marketing and sales teams are able to see the entire process and work out kinks like these. Providing clarity into marketing processes and sales follow-up processes (or SLAs – service level agreements) also enables both departments to gain a better understanding of each other. When you can see the whole funnel in one place, the sales and marketing teams can understand exactly where the bottlenecks are, and can take steps to fix them.
Imagine that the standard time between when marketing hands off a lead to sales, and sales follows up with that lead is 20 days. Taking that one step further, let’s say the average time to close a deal is 40 days; and say a company closes 100 deals a quarter (or roughly 90 days). If the marketing and sales teams are able to see this data and figure out how to cut those 20 days in half, the average time to close a deal drops by 25%. Hypothetically, sales can now close 125 deals per quarter, instead of 100.
It may take a little while to iron out your marketing and sales processes once you have access to this data, but every quarter you can find inefficiencies and fix them to close deals more quickly, or close larger deals, etc.
gC: Let’s talk specifically about Full Circle CRM. Typically what kinds of organizations need the Full Circle CRM solution the most?
BC: Our customers tend to be B2B focused organizations that are running campaigns in Salesforce, and track their marketing efforts. Often times, they are also running a marketing automation system. Our customers range from multi-billion dollar corporations to venture-funded startups, and companies in between. Our customers know the KPIs (key performance indicators) they want to track, but they don’t have the solution to enable them to track and measure what they want, how they want.
gC: What’s your favorite lifestyle/business “hack” you use to boost your own productivity?
BC: This may sound cliché, but our most important “hack” is maintaining work/life balance. At Full Circle CRM, we all work really hard, but we also try hard to work smart — to take time to be with our families, work on volunteer projects, or do other things we are passionate about. This lets us all recharge our batteries and remain focused while we are working, so that our output stays high.