It's easy to get confusing measurements mixed up. Take ROI and attribution—they both measure marketing performance, but one looks at a bird's eye view of your business while the other focuses on granular details of conversions. To make smart decisions, it's important to understand how they differ and when to use each effectively in your business.
At their basis, ROI (return on investment) is a measurement that evaluates the efficiency of investment, while attribution assigns value to what led to customer conversions on a deeper level. But many elements are involved in measuring true impact that needs color-coded support before you can even start looking at either ROI or attribution.
Real-time data gives extraordinary insight into the accuracy of your allocations and provides strong evidence if you want more money from finance in future budgets! Without this foundational layer, all decisions and end results based on these measurements are weak links ready to break under pressure.
Let's talk about common mistakes marketers make when trying out ROI or attribution, as well as best practices for using them properly so you can get full value out of them as part of your toolbox for making successful decisions about your business strategy.
Don't fall into the trap of searching for the perfect ROI number or measurement. Gone are the days of expecting a magical calculation to tell you exactly where, when, and how much money to spend. It's about partnering with finance and looking at bigger issues surrounding your investment data.
Also, don't forget that measuring the cost of all resources is essential because it clarifies how (or if) a campaign impacts overall business goals. Here are some of the common mistakes to avoid when using ROI measurements:
Don't jump into an attribution model without properly understanding its limitations—they aren't one-size-fits-all solutions! Single-touch attribution erroneously reduces customer journeys down to just one touchpoint, while multi-touch attribution can allocate too much value too early in marketing pipelines before leads completely convert.
Both are important pieces, but only if they come after you have real-time data that accurately reflects your current state and performance management measures in place. Avoid these common attribution mistakes:
To get the most out of these measurements, use them together in tandem. Recognize that you can't make an accurate business decision without first understanding customer journeys and how they fit into your larger sales strategy. Here are a few best practices for getting the most out of ROI and Attribution:
What if you had a system that ran automated reports and allowed you to track ROI/attribution in real time easily? That's the power of automation.
Automating your tracking across all channels is essential for obtaining reliable data. With it, you can identify areas where the budget should be allocated and which channels to avoid. Don't be afraid to experiment and measure the effectiveness of each test.
Organizations that understand how they're performing are the most successful. According to Keboola, insight-driven businesses see an average growth of 30% each year. Monitor current performance, benchmark it against targets, adjust the strategy accordingly and then watch the effort materialize over time.
When you know where the customer journey is taking place, such as which avenues need more optimization or testing, you're better able to allocate capital to areas that will bring the best ROI and attribution.
Avoid any analysis paralysis! Don't rest until all the pieces of a campaign or strategy fit together nicely but don't forget to reassess at certain milestones too. Strategically plan for moments where you can re-evaluate the progress and adjust if needed.
This process is much easier to execute with real-time data because you know your numbers are true and accurate.
Integrate ROI and attribution into your business process and develop a system that allows flexibility in analysis and decisions while still affording some level of control. Constantly monitoring the customer journey will drive new insights into your products, optimize those products, create the best profit opportunities and ensure you're delivering more relevant campaigns.
According to PWC, 65% of customers would become loyal customers with a personalized experience.
Using ROI and attribution correctly can provide good insight into which campaigns or initiatives are successful or unsuccessful so you can take the right steps to optimize your business strategy. You may even find that some investments are not worth pursuing further, so you can shift focus to those that bring better ROI and attribution.
Just remember, don't make the mistake of thinking ROI and Attribution are interchangeable—they tell different stories that need different analyses to bridge the gap between strategy creation and optimization.
The bottom line? Both have their place if you do them correctly, so play around with them until you find the combination that works best for your business so you can hit your goals as efficiently as possible.