How to use data to optimise your marketing spend
When budgets are tight, many companies react quickly by reducing their marketing spend across the board, or by cutting different elements of it. However, before you dive in, it’s important to use data to analyse which are the worst performing areas to cut, and which to keep.
Attribution will help you determine which marketing activity is delivering the most commercial value. It’s a way of working out how a sale has been achieved by looking at the whole customer journey, and will include sales that have been achieved offline as well as online.
In this blog, I'll outline the different ways that you can look at sales attribution, so you can find the model that works for you:
Last click: It’s easy to track converted sales through last clicks, but this won’t show the moment that a customer became aware of your company and its products or services.
First click: This shows awareness at the beginning of a customer journey, but, like ‘last click’, it doesn’t show the full picture when deciding how to cut marketing spend.
Linear: This is where you account for every step in a customer journey to making a purchase. The downside is that you might use number of customer interactions as a measure of value, instead of looking at what was the most significant step in achieving a sale.
Positional: If you’re not already using customised or algorithmic models, or haven’t got time to set them up, the positional model will be best for your business. It blends the above three models, giving first and last click most weight but still takes into account other touch points on the customer journey. It’s great for broader, more varied campaigns and is good to use when you are trimming budgets but don’t want to disrupt sales.
Customised: This model is unique to each campaign so can be time consuming to set up. If your focus is on saving budget then look at other models.
Algorithmic: This is the best attribution model and is guided by real time data. It is fully rounded, accounting for all customer touch points. If you’re not already using it, bear in mind it takes time and effort to set up.
Time decay: This assumes that the channels nearer to the time of purchase are most important. However, if you’re using it to inform budget decisions, beware of getting rid of too many activities at the top of the funnel or you could kill your sales pipeline.
A common mistake many companies make when trying to decide what sales and marketing initiatives or channels are working best for them, is to assume that online sales are everything. However, the average conversion rate from online clicks is just 2.35%,* whereas phone calls have a far higher conversion rate of 30-50%, but they are massively underestimated by businesses.
Moneypenny handles calls for more than 20,000 clients around the world, across multiple industry sectors, from small companies like plumbers and hairdressers to large financial corporations, law firms and property clients just to name a few , and knows first-hand that companies love online sales because they can be measured. In contrast, phone calls are harder to measure and optimise than SEO, adverts or emails, but are often the highest converting response channel for most businesses. After all, if a prospect has taken the time to call, they are definitely demonstrating ‘high intent’.
"Phone calls are growing in importance and this is set to continue, in fact, it is estimated that $1 trillion worth of spending is influenced by phone calls. New levels of customer caution lead to additional questions and protracted purchase journeys. Also, in certain sectors like luxury travel, 70% of booking are made over the phone, so it’s important to get this right and have the right call handling team in place, outsourcing if you don’t have adequate resources in house."
With the volume and value of calls set to grow, companies can’t afford to leave this source of data untapped, so Moneypenny advises that using tracking that links online activity to phone conversations via dynamic call tracking will paint a clearer picture of your customers’ journeys – revealing which marketing tactics need to be preserved and which can be trimmed.