The First Word On Tracking Last Touch Attribution

By Guy Powell, Principal & Senior Consultant, DemandROMI

Have marketers been measuring effectiveness all wrong? Has measuring lead source been all wrong all this time? Should we stop asking our leads where they heard about our offer? Uh oh.

There is a new marketing concept entering marketers’ vernacular called last touch attribution which is supposed to help get a handle on improving the measurement of marketing effectiveness. The fun part of this term is that it is both right and wrong at the same time. It can help marketers make the right decisions or, if applied incorrectly, the wrong decisions. Let’s see how.

Marketers must allocate funds between media channels, choosing the right investments to select one media over another. Those that have the best return should receive more investment; those with lower returns should receive less investment.

The problem that marketers have is how to measure the true effect of each media given complex, dynamic marketing environments. Many marketers often use last touch attribution to apply the entire weight of a specific customer response to one media. However, this approach ignores all prior touches and all concurrent touches by other media. It is also often improperly measured by asking prospects where they heard about the promotion or the brand.
Let’s dig deeper
Last touch attribution refers to how to measure customer response to a specific marketing activity. Here are a few examples illustrating some of the flaws of last touch attribution:

1. If, for example, we send out 1,000,000 direct mail pieces and 1.25% of the recipients respond, then the direct attribution from that direct mail piece, ignoring all other touches, is 12,500. But what if this was the third and last in a series of three direct mail pieces that were sent out where the redemption rates were 1.1%, 1.7%, 1.25%, respectively. Did the earlier two drops have any impact on the response rate of the 3rd drop?



2. Was there any value in building the brand for those customers that didn’t respond? There were 959,500 prospects that received the direct mail piece but didn’t respond. Will they be more likely to respond in the future when they receive the next ‘touch’?



3. In a similar vein, let’s assume there is a monthly newsletter going out to existing customers. Every month based on the newsletter, 1,000 customers purchase something promoted in the newsletter. How do we count the value of all prior touches that the newsletter had on that one, eventual purchase?



4. As part of a measurement study, respondents were asked where they heard about a promotion. Was it TV, the magazine ad or an ad they saw on the Internet? Can respondents accurately remember where they saw an ad or will they mi-attribute it to one media over another?

Referring back to cases 1 and 2 above for direct mail managers, their goal is to maximize the response across the campaign. In this case the average response rate was 1.35%. Through better creative concepts (but not more costly offers) if they could raise the response rate to 1.40%, then they would be seen to have increased their marketing effectiveness. (Hopefully this would lead to higher bonuses, as well.)

But what if during the second drop where the response rate was 1.7% there was a TV branding campaign running supporting some of this higher response? Who should get the credit for the increased response? Should the incremental response be attributed solely to TV and the actual response to direct mail be reduced to something less than 1.35%? Or, should the direct mail manager be given all of the credit, because in the end, those prospects responded to his/her direct mail piece?

I contend that both answers are correct. It depends on the business question. If the business question is to increase response to direct mail, then the direct mail manager took advantage of the TV campaign timing to increase overall response. When it comes to the direct mail manager managing the direct mail media, they made the right decision. On the other hand if the business question concerns the optimization of the allocation of media expenditures then the net effects of TV and direct mail must be considered. This will allow the marketing team to properly allocate investment between the two media types. As marketers we need to understand how we can use last touch attribution to make some decisions but not others. Last touch attribution allows marketing media managers to measure and improve the direct results of their marketing. It is not the right method to make allocation decisions across the marketing mix where many other factors may apply.

The Social Media Math
Now let’s take a practical example. This example has to do with a technical blog that is written by a software company’s VP of Engineering and domain expert. When he publishes a post on his blog, downloads of critical whitepapers relating to the blog can be directly attributable to the blog. The referring pages are tracked and downloads are determined and over the next week following the post, the company generates on average 1,000 downloads directly attributable to the blog. The actual number of downloads with the blog as the referring domain varies from 500 to 2,500 per post. Because of the complexity of the channel and the long sales cycle, measuring downloads is a good interim variable to measure success for many marketing activities. All well and good.

But the blog is also picked up by many other blogs, forums and newsletters. Over the following 3 weeks, downloads that are not directly attributable to the original blog are generated and represent, on average, another 2,500 downloads - an amplification factor of about 2.5. Now, many web marketers, using last touch attribution, would assume that each blog post from their VP of Engineering can drive on average 1,000 new downloads. However, the real number of downloads generated by the blog post is 3,500.

Which number is right? Both of them provide good information to help marketers improve their effectiveness. The direct response model is simple to measure and can provide a direct measurement of the effectiveness of the blog. On the one hand, the marketing manager must deliver as many responses as possible from their media activities, including the blog. These indirect effects must also be taken into account in order to improve marketing allocations. Should the marketer invest more in driving direct response from the blog or work with third party sites to drive indirect response and amplification?

With information on the amplification effect and where the increased responses are coming from the marketer can start to target specific third party sites to drive increased response. With the proper measurements and interpretations of those measurements, marketers can now determine whether to invest their time and effort in driving direct or indirect response.
Other Implications of Last Touch Attribution:

• Last touch attribution can help marketing media managers (coupons, direct mail, web marketers and others) determine the direct results from their marketing efforts, ignoring all other concurrent, prior and brand touches. With this information, they can make better decisions to improve results from their direct marketing activities.


• Last touch attribution provides misleading information for the indirect impact of marketing activities. Marketers must be very careful not to use the direct results in complex marketing environments. They may overweight some responses and underweight others leading to misallocations of marketing funds.


• Last touch attribution ignores any brand value generated by touches not responded to. Only with a holistic approach taking into account both the short and long term, direct and indirect value of their marketing activities can marketers make the right decisions as it relates to the measurement of their success with their marketing activities.


• Marketers must properly measure their response in order to make certain that the measured responses actually reflect the media causing the response.

About the author:
Guy Powell has over 20 years experience in senior level sales & marketing in the US and worldwide, both on the client and consulting sides. Through his DemandROMI consulting and training practice he has trained thousands of senior marketers throughout the world representing Trillions of dollars in revenue. Many of the participants also become consulting clients implement and improve their entire marketing culture. Guy has an upcoming book that will help marketers implement a new culture of marketing effectiveness in their organizations. You can sign up for more information at www.Marketing-Calculator.com.

7 Tips For Increasing Conversions On Free Trials To Customers

By Howard J. Sewell, President of Connect Direct

The recent explosion of SaaS (hosted) solutions has brought about a resurgence in software vendors utilizing free trials as a primary means of acquiring new customers. Fortunately for them, these companies can now take full advantage of today’s sophisticated marketing automation technology that enables automatic, personalized, rules-based, follow-up e-mails to all trial registrants. However, even the best technology on the planet can’t convert prospects to customers if the underlying lead nurturing strategy is suspect.

Here are 7 tips for designing a lead nurturing strategy to maximize your conversion rate from a free trial program:

1. Know why people don’t convert.

There are plenty of potential reasons why free trials don’t convert. Maybe users just found the product too complicated. Or too expensive. Or they weren’t given enough time to fully evaluate the software. The most effective trial conversion strategy is one that addresses these objections head-on.

Step #1: identify what these issues are. Send an e-mail survey to every free trial prospect from the last 6 months who didn’t convert, and ask him or her to respond to a simple survey (2-3 questions at most.) Offer a free gift or prize drawing to drive response. (This is valuable data; don’t be stingy.) Then use the results to craft your follow-up strategy. If price is the primary objection, include a message about ROI. If complexity is the issue, send an e-mail with step-by-step instructions on how to complete a key task. And so on.

2. Keep your trial period to 2 weeks.

Perhaps the #1 mistake software vendors make in setting up free trial programs is that they allow the user too much time. Granted, some products are more complex than others, but for most, a trial period of 30 days is way too long. If you limit your trial period to two weeks, it creates urgency. When users feel they have plenty of time to evaluate your product, they’ll put off the evaluation. Pretty soon, a week has gone by and you’ve lost them.

When someone registers for a free trial, it’s an indication of immediate, perceived need. One of the keys to a successful trial strategy is to maintain that interest and ensure that the user acts upon it. Lose the momentum and you’ll lose the customer.

3. Make sure they use the product.

Your survey should bear this out, but one of the primary reasons trials don’t convert is because the user never got around to using the product. For that reason, it’s a good idea to focus at least one or two messages early in the trial period simply on how to use the software. Save the “why you should buy this” for later.

Evaluating even a relatively easy to use product can seem daunting. Outline a simple task that can be completed easily. It doesn’t have to be a task that encapsulates your entire value proposition; first and foremost, the purpose of the e-mail is to get the user to engage with your product. Once you’ve broken down that initial barrier, the chances are much greater that the person will evaluate the product more fully.

4. Be aggressive with frequency.

It’s natural to be wary about overwhelming a new user with a barrage of e-mails. I suggest, however, that free trials represent a scenario in which you can reasonably afford to be somewhat aggressive. We typically recommend one e-mail every 3-4 days at minimum. If you see a resulting spike in opt-out rates, or conversely, a drop-off in open rates, you can always dial back the schedule.

Keep in mind that trial users are getting something for free and so they’re likely to be more tolerant of your e-mails as part of the price they pay for that free service. This is another reason, however, to set the tone early on in your communication using e-mails that are useful and informative rather than overly “salesy.” If you hit each individual user with a hard sales message every 3 days, no amount of perceived value is going to prevent you wearing out your welcome quickly.

5. Ask for the sale every time.

This might seem contradictory with the advice above to maintain a service-like tone, but you can do little harm by at minimum giving the user the opportunity to order at every step in the follow-up process. For some companies, all it takes is one simple use of the software to make users fully appreciative of the value that software delivers. If you wait two weeks to ask for the sale, that initial enthusiasm may have waned, or the user may have moved on to other priorities.

Asking for the sale doesn’t have to be heavy handed. It could be as simple as a line of copy: “Ready to convert your trial account to a full subscription? Act now and we’ll make sure you receive credit for the remainder of your trial period.”

6. Test, test, test.

A trial program is a classic example of a repeatable process. It’s also an ideal platform, therefore, for a systematic, ongoing process of testing and optimization. When increasing conversion rates even by a percentage point or two could mean thousands of dollars in additional revenue to your company, the opportunity cost of not testing is enormous.

To be clear: it is not considered “testing” to simply evaluate the performance of each e-mail independently and make occasional adjustments, as in: “E-mail #5 isn’t performing well; let’s change the subject line.” Testing only works if you’re evaluating different strategies side-by-side on a randomized basis. Test subject line, frequency, interval, offer, everything (note: one variable at a time, please.)

7. Keep selling after the trial.

Don’t give up just because the trial period ended and you didn’t get the sale. Follow up with at least one or two e-mails after the expiration date – say, a week later and then two weeks after that. Maybe the prospect just hasn’t got around to placing the order, and your e-mail could be the reminder he needed. Consider sending a survey as the final communication asking why he/she didn’t buy. Depending on the response you get (particularly if the response is: “I just haven’t had the time”), you can trigger a follow-up call from inside sales.

Speaking of which, should you integrate telemarketing into your free trial nurturing strategy? The answer depends on whether you can prove telemarketing makes enough of a difference. Calling prospects will almost always increase conversion rates; the only question is whether the increased return outweighs the cost of that manpower. Take a month’s trials and call half of them. Measure the incremental conversions in terms of revenue to your company and compare that to the increased cost of sale.

Companies with marketing automation systems in place have the luxury of integrating telemarketing based on specific demographic or behavioral criteria. For example, you could choose to trigger follow up calls to only those trial users who haven’t purchased yet but who opened at least one of your follow-up e-mails, or indicated a company size of more than 100 employees, or work at a target account, or whatever other criteria you define that makes them worthy of additional effort. That way you’ll increase your conversion rate but also improve sales satisfaction by only sending your reps leads that truly merit follow-up.

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Howard J. Sewell is president of Connect Direct (www.connectdirect.com), a full service agency with offices in Silicon Valley and Seattle that specializes in turnkey, integrated demand generation strategies for high-tech companies. He writes Direct Connections (http://connectdirect.wordpress.com/), a popular blog on direct response best practices.

Empty Your Pipeline To Reveal The Real Sales Opportunities

By Nigel Edelshain, CEO of Sales 2.0

When I last held down a real job I worked in a small sales team of senior sales executives selling high-end, high-cost technology projects to Wall Street banks.

Like most sales teams we would have weekly sales meetings where the team and our sales manager met in a conference room and reviewed our sales pipeline and what needed to be done to move each opportunity forward.

I did not like these meetings much at all because I always seemed to have the smallest pipeline. Some of the other reps in the team had 30 or 40 opportunities in their pipeline report and I would sit there with 5 or 6. It made me feel inadequate. I was always thinking “how am I ever going to make my numbers with such a small number of opportunities?” Fast forward a year. I closed five large deals -- lifetime value $2-3 million dollars. The other reps from our team with the 30-40 opportunities in their pipeline still had 30-40 opportunities in their pipeline but zero to one deals worth a fraction of those I closed. What was wrong with this picture?

It turned out of course that the 30-40 deals in some reps pipelines were not well-qualified. These were not buyers who were really ready-and-able to buy. There was wishful thinking here on behalf of some of these reps. A buyer showed some interest so immediately the rep entered this opportunity into their pipeline report at "40% probability" (i.e. 40% likely to close). And that's where the opportunity typically stayed for weeks and months until it was blatantly obvious it never would close.

Meanwhile (without knowing it at the time) I was holding the opportunities in my pipeline to a higher standard. If I got interest from a prospect, I might enter an opportunity into my pipeline at 5% probability but then I would take that opportunity out again a week, or two, later if it did not progress. So my pipeline was small. I was constantly “culling” the dead opportunities and I was not overly optimistic about what I put in or at what percentage I put them in at.

My small pipeline allowed me to focus. Since I had so "few eggs in my basket" I focused my energy on these opportunities. I strategized how to move each deal forward. I "covered the bases" finding each person involved in the deal and worked with them to move the deal forward.

Meanwhile the reps with 30 or 40 opportunities in their pipeline felt overwhelmed with their bounty. They simply did not have time to strategize and set action plans for 30-40 deals. They took their "eye off the ball". They did not manage the sales process but rather they left it to chance whether prospects became deals. A majority of their prospects turned out not to be real, budgeted, ready to buy opportunities. Yet they invested their time equally between what turned out to be unqualified and qualified prospects. In short, they gambled.

Weed out the unqualified opportunities from your sales pipeline quickly (throw them back to the marketing/nurturing process). Then focus your full attention on the real opportunities that remain. In reality most sales people will never have enough real deals in their pipeline to gamble with them. Make sure those real opportunities you do “hatch.” Nigel

Edelshain is CEO of Sales 2.0 LLC, a company dedicated to taking the sales profession to another level. Sales 2.0 provides companies with a range of services and products to enable them to make their sales forces wildly more effective. To subscribe to Nigel’s Sales 2.0 Ideas newsletter, visit his site. http://www.sales2.com/home.shtml