As banks and credit unions face increasing pressure to compete with fintech innovations, peer-to-peer lenders and digital payment channels, it becomes more crucial than ever to optimize marketing spend and understand which channels provide the greatest ROI.
In our last post, we discussed several types of attribution models and determined that a fractional attribution model is a critical tool for optimizing the performance of marketing dollars. Here we will discuss the challenges of implementing a fractional attribution model, and the steps to get started.
Why Aren’t More Companies Using Fractional Attribution?
There is plenty of discussion happening within financial marketing organizations about the importance of marketing attribution. Unfortunately, several challenges are preventing these discussions from gaining any real traction. Common challenges preventing banks from implementing a successful, robust attribution strategy include:
- The “where do I start?” roadblock. As we saw in the last post, there are many options when it comes to marketing attribution. When faced with an overwhelming number of options, marketers have difficulty selecting the best approach to invest in, let alone deciding where to begin. These folks end up stuck in the same rut.
- A lack of executive-level sponsorship. The decision to make significant changes in overall organizational structure, talent and technology needs to be driven from the top, but making this leap is often hindered by competing priorities.
- Politicized corporate culture. The underlying issue here is often organizational structures that reward the performance of individual channels. When multiple departments compete to take full credit for revenue generation, those department leads are focused on their team’s profits, not the overall health of the company.
- Inconsistent logic. Offline and online channel marketers still attribute consumer behaviors separately with inconsistent attribution logic. The flawed justification that comes from this practice makes a combined attribution approach seem impossible to achieve (and compounds some of the other challenges listed above).
- Mobile-added complexity. The ability to track behaviors across various online-enabled devices is a data scientist’s dream, but the complexity of the data can be overwhelming for marketing organizations—and is sometimes perceived as more of a nightmare.
- Lack of the right skill sets and corresponding technology. Because the demand for data scientists is greater than the supply, it’s time to invest in top data scientists with a broad set of math and statistics skills and a deep understanding of the data landscape.
Fractional Attribution: How to Get Started
Executive-level sponsorship is key to making the transition to a new attribution model. When it comes to gaining executive-level sponsorship, you should stress the point that you can get a clearer picture of what the entire marketing budget is doing by spending just a small fraction of that budget. And by investing a small part of the marketing budget into a fractional attribution model, you can find 15–25 percent of ineffective spend within a few months of implementation. You’re not just getting an accurate map of where your marketing dollars are going, you’re reallocating those dollars in a much more effective manner. When put that way, the transition to a fractional attribution model becomes much more palatable.
You also need to make the shift to a more customer-centric focus and show how this will result in more profitable customer relationships. Here it will be helpful to perform an audit to assess current skill sets and technology infrastructure. Put together a detailed plan that shows how to get to a more robust attribution model with a phased approach—with clear success measures along the way to justify the next step.
Next Step: The Scenario Planning Tool
Implementing a fractional attribution model is only half of the solution; a scenario planning tool is needed to optimize marketing channel performance. With this tool, analysts and marketers can quickly run “what-if ” tests to gauge the impact of reallocating marketing spend. For example, what will happen if you move dollars from digital marketing and instead invest them in direct mail?
The end result is a more informed decision and higher returns from the marketing budget. Furthermore, this process can be used to calibrate and refine the attribution engine going forward.
To create the scenario planning tool, analysts outline a roadmap that identifies key performance indicators (KPIs) and details the overall attribution approach. The most robust attribution solutions require user-level data across multiple online and offline channels that need to be integrated and blended.
Spend Wisely with Better Attribution
The best decisions are data-driven, and in a multichannel world where the customer journey can span across several channels, robust attribution solutions will play a central role in informing marketing-spend decisions. It’s time to leverage analytics to start deriving insight from those large pools of data. A fractional attribution model and a scenario planning tool can optimize media and channel performance, helping you break down the silos at your institution—and showing you exactly where to allocate your marketing dollars.
Want to learn more about identifying and implementing the right marketing attribution model? Check out The Financial Brand Forum 2017 where Korey Thurber, Chief Analytics Office at Harte Hanks, will be presenting a breakout session. Learn about the different attribution models used today, which ones work, which ones don’t, and how to get your attribution solution off the ground.