How Top CMOs Quantify Marketing Investment with Revenue Attribution

Top-flight CMOs prove that each new marketing dollar they invest drives organic revenue growth.

The buyer’s journey does not follow a linear course. Without revenue attribution, you are exposed—unable to allocate time, money, and resources to the marketing efforts that produce top-line results. If you can’t quantify the collective impact of marketing touch-points, you are left guessing. And that eventually gets you fired, when you guess wrong.

Revenue attribution is a tough issue to scope out. But it’s well worth the effort. Forrester Research analyst Tina Moffett states, “B2B companies are seeing an average of 15 to 18 percent lift in revenue as a result of implementing a closed-loop attribution system and then optimizing marketing programs based on the more sophisticated analysis.” The size of the prize, a 15 to 18 percent lift, makes revenue attribution worth pursuing. That’s a game-changer. 

Access the most comprehensive resource to get your arms around B2B revenue attribution available in the market today.

And it’s none too soon. CEOs and boards have put chief marketing officers under the gun to prove the ROI for marketing expenses. Unfortunately, as CMOs share more data to become more accountable, this has had the opposite effect. All too often, members of the C-suite find unexplainable discrepancies and gaps in marketing data. 

Worse yet is when marketing explains discrepancies in a way that shows the C-suite that marketing data is not as reliable as data from the other functions. One CMO candidly shared, “Every time I have what I think is bulletproof evidence of marketing ROI, I find myself exposed when someone on the executive team pulls on a thread that I can’t explain. Each time this happens, it’s more difficult to come back to a skeptical audience.” 

CEOs, COOs, CFOs, and boards rarely understand marketing and commonly view it as a drain on EBITDA. While executive teams accept marketing as a necessary function, they have little patience for the marketing budget discipline because they don’t see a clear connection to revenue. 

Adopting revenue attribution enables marketing leaders to change the conversation, using language the C-suite understands. By tracking marketing contribution and revenue attribution in a way that proves marketing’s impact on topline growth, CMOs take a crucial step toward building confidence and trust.

Understanding Revenue Attribution  

Let’s begin by establishing a common definition to bring clarity to the discussion. Revenue attribution is the methodology for assigning revenue dollars to marketing touch-points that occur during the buyer’s journey. It involves connecting marketing and sales data to measure the impact of marketing efforts on revenue from closed/won deals. This practice allocates credit to all marketing touch-points, across all channels, that ultimately produce the desired customer action. 

The foundation of the new terminology points to accountability. But thought leaders and vendors have inundated marketers with a barrage of attribution-like terms. To make matters more confusing, analyst firms are seeking to brand specific expressions rather than help establish a shared lexicon.

Before we start fleshing out revenue attribution, let’s go through some common misconceptions. 

What’s the difference between marketing contribution and revenue attribution? 

Marketing contribution is the methodology for tracking marketing-sourced and marketing-influenced leads through the funnel. The key to this measurement is that contribution is tracked as leads are delivered from marketing to sales, and never from closed wins back to marketing. 

The best practice for determining your marketing contribution is to capture the primary source of each marketing-sourced or marketing-influenced lead. Then track qualified leads in the CRM all the way through the funnel as they convert to pipeline opportunities and closed/won revenue. Do this, and you have a believable marketing contribution KPI. 

Marketers lose credibility when they take the list of closed/won deals and then gold-dig their way back to past email and trade show interactions, for example. That is sheer happenstance, not cause and effect. The CEO and sales leader are experts at sniffing out this shell game. 

Pipeline and closed/won revenue numbers are the bookends to a robust marketing ROI. Marketing contribution to the pipeline and revenue should be the top KPIs of a B2B marketing team. 

How does marketing contribution interlock with revenue attribution? 

Marketing contribution and revenue attribution are two different types of measurements, and you need both. The value of the contribution KPI is that it quantifies the impact of marketing. The value of revenue attribution is that it tells you the “why” behind marketing contribution: what’s working, what’s not working, and where to allocate budget. 

Without revenue attribution, marketing contribution metrics can become unwieldy at the pace of growth expected by management. As the marketing function shifts from activity metrics to hard-hitting revenue and pipeline contribution metrics, marketers struggle to scale their efforts in proportion to incremental budget investments. 

First, when some marketing channels are proven to work, they cannot be scaled at the same rate of acquisition cost. The reason is inventory limitations and increased costs per activity as you go deeper. Examples include search keywords, social ads, and vertical industry email blasts. 

Second, marketers can’t legitimately pinpoint with precision what marketing actions caused the result. This causes marketers to overstate the impact of integrated campaigns since the orchestration of touch-points had an impact overall—and if you can’t isolate the exact elements, you must give the whole campaign credit. 

What’s the difference between BI visualization tools and revenue attribution? 

Business intelligence (BI) visualization tools such as Domo, Tableau, and GoodData help you see and understand your data better. These tools can be used to bring disparate data sources together and then displayed to tell a story. BI visualization tools help enable the assembly and display of revenue attribution data. But they require a guiding strategy. 

How do BI visualization tools relate to revenue attribution? 

Think of revenue attribution as the brain and BI tools as the arms that the brain controls. Vendors for BI tools will talk about revenue attribution because the attribution revenue reported by the BI tool has value to the buyer. 

When buying a BI visualization tool, you may see a promise of revenue attribution. Make sure you read this complete issue to uncover all the groundwork you must do to perform the necessary inputs before the BI visualization tool can spit out a revenue attribution report. 

Planning Your Implementation 

Revenue attribution is an advanced form of tracking that must be built upon a solid foundation of basic tracking fundamentals and accurate CRM data. Technology vendors serving this space oversimplify the implementation. Conference presenters minimize the day-to-day trench warfare necessary to do revenue attribution right. This is a task that requires a lot of effort and discipline. But it’s worth it. 

I interviewed B2B marketing leaders who have successfully implemented revenue attribution, asking them to rate their confidence in the data on a scale of 1 to 5, with 5 being “highly accurate.” Surprisingly, even these capable marketing leaders rated the accuracy of their attribution models at only an average 3.6. 

Leo Tucker, senior vice president of global marketing at PGi, focused his team on revenue attribution and implemented it successfully. When asked about the top challenges, he stated, “The attribution data is only as valuable as the data in the CRM system that can be appended. A close second was getting tracking in place around the globe with my international marketing teams. I didn’t want this to be a North American view. It was important to have a global view of revenue attribution.” Tucker uses revenue attribution reports to allocate budget with confidence, knowing the precise marketing touchpoints that are moving customers through the buying process. 

When I spoke with each CMO, I also dove deeper with the member of the team who was involved in the implementation. When vendors say they integrate seamlessly with your CRM, realize that’s only half the battle. Integration with your CRM and marketing automation is the price of entry for the technology provider. 

Companies fall into the trap of adopting an attractive technology and then letting the technology dictate the solution. The best practice for implementing revenue attribution takes careful planning to determine your requirements for the technology. 

How do I provide visibility into touch-points? 

You may be ready to go, but chances are your initial steps will involve getting your house in order. After the marketing leader establishes the project charter, have marketing operations map all the marketing touch-points, both digital and physical. Indicate a status for each one: 

• We currently track consistently world-wide
• We currently track consistently in some regions, but not world-wide
• We do not track, but can with the right tagging or reporting (physical sources)
• We do not track, and do not have the capability to track with existing systems

In a working session with marketing operations, map each planned marketing touch-point to the corresponding status. You’ll identify many gaps such as content syndication, field marketing, international campaigns, and so on. Closing these gaps requires training, process, and discipline. 

The result of this exercise is readiness for implementation. If you’re thinking this is too hard, remember—if you don’t close the gaps, you’ll have reduced visibility into the series of touch-points that drives leads through the funnel. 

How do I establish a marketing-to-sales handshake? 

It’s gut check time. Is there a solid service-level agreement between sales and marketing on how to manage marketing-sourced leads? Has it been adopted? Every sales force has a few lone wolves. But as a whole, do sales and marketing cooperate enough to make this work? If the foundation is weak, stop any effort to pursue revenue attribution right now. Your peer in sales must require his or her sales team to work from the marketing-sourced contact records in the CRM. 

For example, marketing-sourced qualified leads should be provided to sales. Then that lead record should be converted to an opportunity record, and later a closed/won deal. Through the duration of the prospect’s life cycle, sales and marketing should work in concert from the same CRM record. All bets are off when sales closes a lead, and opens a net-new opportunity. 

The same principle is true for sales opportunities that marketing affects. Marketing’s influence should be attributed to the sales opportunity record. Matching up sales wins after the fact is a recipe for corrupted cause and effect. 

The opportunity and sales history data in CRM systems doesn’t lend itself to revenue attribution without some level of manual effort. Companies that do this really well have some level of manual validation. World-class companies have a regular cadence of meetings between sales operations and marketing operations to review opportunities and wins and validate proper revenue attribution. 

Without a firm sales and marketing handshake, the attribution model is sunk. For revenue attribution to be believable, it must be developed on the foundation of a common CRM record between marketing and sales. Break this cardinal rule and you’ll be left with a sales team that doesn’t believe the attribution numbers. Yes, it’s unfair, but it’s reality. World-class marketing leaders embrace it. 

How do I select the right revenue attribution model? 

There are five main attribution models for assigning revenue dollars to marketing touch-points that occur during the buyer’s journey. 

Revenue Attribution Models: One Size Does Not Fit All 

Different revenue attribution models suit different business needs, depending on the length and complexity of the buyer’s journey. 

All revenue credit for the conversion goes to the first touch-point when a lead or contact interacts with your marketing message.

All revenue credit for the conversion goes to the last touch-point when a lead or contact interacts with your marketing message.

Equal revenue credit is distributed across all marketing touch-points with a lead or contact.

A sliding scale assigns the most revenue credit to the last marketing touch-point closest to the conversion; the remaining touch-points get less credit the earlier they were in the path. This sliding scale can also be reversed. 

Customized algorithms analyze the relative value of each marketing touch-point, and constantly refine themselves to optimize revenue credit allocation.

After reviewing these models, your first thought must be, “What dunce wouldn’t pick multi-touch?” With a great foundation of tracking and data, that may be the case. However, the right model depends on the fit to your particular business needs. There are five variables to evaluate when selecting a model: buying process dynamics, market influences, capability, capacity, and data integrity. 

Buying process dynamics. The complexity, length, and number of decision-makers involved in your buying process influence whether you adopt a simple model or a more complex, multi-touch approach that provides visibility into the entire series of interactions. 

Companies with a single decision-maker and a fast-moving buying process may focus on simpler models, knowing that what’s most important is getting a first-time visitor right to sales. In contrast, a complex ERP software company, for example, will benefit from a more complex multi-touch attribution model that captures the entire series of touch-points. 

Market influences. The attribution model should be fit to match the largest challenges you face in filling the top of the funnel and converting eyeballs through the mid-stages of the funnel. If your company is in a fast-paced market and you have a known brand, then your challenges aren’t first touch at the top of the funnel. You are going to focus your attribution model on the difficult work of converting mid-funnel, or maybe even focus on the last touch. 

Capability. Match the model selection to your ability to execute. Do you have the foundational systems and the capabilities on your team for a more complex model? Don’t bite off more than you can chew by having the attribution model extract more value than it provides. Attribution modeling is an advanced capability that should not take precedence over foundational efforts to get the marketing team on track. 

Capacity. Even if the marketing team has the capability, it must have the bandwidth to execute. Running a lean team requires you to consider the value of the insights offered by each model in the context of the resources you can deploy. It’s a tough call. 

Data integrity. The condition of your data must be solid before you even think about overlaying a revenue attribution model on top. Your foundation of tracking, reporting, and contact record management must be at a sufficient level to consider complex models. If data integrity is weak or in question, then start with a simple approach. 

Fitting Business Needs 

Something worth noting: Two of the most advanced marketing leaders I interviewed for this article favored simplicity, even though they had the capability to implement a more sophisticated model. One chose first-touch revenue attribution and the other started with last touch. 

Nicholas Miller, head of marketing operations at Phillips 66, selected first-touch revenue attribution for his B2B marketing effort. “First touch is the more valued method for our organization,” says Miller. “In my experience, understanding when a prospect first raises their hand is critical as it allows us to truly optimize our spend around filling the funnel. While last touch does show the conversion point, it does not reflect what created that initial interest. 

“In a world that is flooded with marketing propaganda, a prospect’s journey is typically not decided by one source, but multiple. Once on the radar, we focus on moving the prospect through the funnel via solid nurturing campaigns,” says Miller. 

Mark Goloboy, vice president of demand generation at Brainshark, selected last-touch revenue attribution. “We chose last touch because it’s easier to tell the story from a business perspective—makes sense to everyone,” says Goloboy. “First touch doesn’t inspire confidence, and requires a leap of faith for the business to see the tie to revenue.” He also decided to start with a last-touch attribution model to minimize implementation risk. 

Brainshark recently implemented a multi-touch approach, and has started to transition its measurement from last-touch to multi-touch attribution, for the planning value those insights will bring marketing. See “Business Scenarios” on page 41 for an example of how different revenue attribution models map to various business requirements. 

Proving How Marketing Investments Generate Revenue 

The C-suite looks skeptically at the meaty marketing budget, and it’s largely a mystery to them. CEOs, COOs, CFOs, and boards know that marketing has a role to play; they just need a better tie-in to the revenue. They want to believe, but without revenue attribution it requires a leap of faith. 

Marketing leaders are met with skepticism when they present the executive team with a waterfall report of marketing-contributed pipeline and wins. This view doesn’t show what marketing and sales teams are doing along the buyer’s journey, and it does not account for the totality of effort. Worse yet, the contribution approach is undermined when someone identifies one win in the list of contributions that had nothing to do with marketing. 

Revenue attribution provides the executive team with a complete view of how marketing and sales work together. This results in a greater appreciation for the value of marketing’s total effort to generate revenue. 

Clint Poole, senior vice president of marketing at Lionbridge, used revenue attribution to make marketing tangible to the executive team. “Revenue attribution started a whole new conversation,” Poole says. “They [executive team and board] wanted a customer-centric understanding of the marketing and sales interaction. Non-sales and marketing execs started to have deep dialogue about the whole journey.” 

Revenue attribution gives you the ability to have a very different dialogue with the CEO and board. Take the time to review specific examples of buyers who came through the funnel. Break down all the marketing and sales touch-points along a timeline to illustrate the buyer’s journey. These examples show the totality of effort. Seeing real examples helps the executive team understand the whole buyer’s journey, and makes a skeptical audience believe. 

In the past, you may have cited buyer research indicating that over half the customer’s purchasing journey occurs before a prospect reaches sales. Revenue attribution enables you to prove that point and connect it to revenue. Now you can demonstrate how each marketing dollar spent generates revenue. This results in the board, and the CEO, giving you more marketing budget to invest. And with each new dollar invested, organic revenue growth accelerates.