Lead source attribution is the ability to match every dollar of revenue earned to dollars and time spent on advertising.
At its most basic, it’s asking your customers, “How did you hear about us?” At its most sophisticated, it’s a detailed analytics system calculating your return on investment and cost per conversion at every stage of your revenue funnel, for every lead source and campaign.
Basic or sophisticated, the most important thing is to have some system in place before you spend time or money on traffic generation.
In my consulting practice, I’ve noticed that it’s pretty common for entrepreneurs to go to market without a lead source attribution system in place. It’s often on their roadmap, but easy to put off…so it never gets done.
A bit of focused effort at the beginning can save you a lot of time, money and headaches in the long run. Take the time to set up systems in your software and employee workflows to ensure that you’re doing everything you reasonably can to track lead sources.
Why tracking lead sources is important
I used to work in sales at a company whose primary advertising source was radio ads. At the end of each month, the owner would make us call every single customer without a lead source attributed, to ask them how they heard about us. Why did he care so much?
As I began to contribute more to the marketing side of the organization, I learned that the advertising budget was close to million dollars a year. With so much money on the line, the owner needed to know which advertising channels were producing and which were duds so he could quickly adjust.
Getting team buy-in
Following procedures in your employee workflow system to track lead sources can cause a lot of grumbles from your team.
For example: It’s a lot easier to quickly throw up some links on social media as opposed to taking five minutes to add tracking codes to the URLs.
Show your team that you care enough about it to take the extra time yourself. Spend extra time in training to make sure they get it right. Explain why it’s so important:
- Having more control of your advertising budget means a more stable company, more stable jobs and more chances for advancement.
- When it comes time to raise capital or report to investors, proving that you take good care of your money can go a long way.
- Having detailed lead source attribution data allows you to optimize your revenue funnel, which will make their jobs easier.
- It allows you to better evaluate job performance in the hard-to-quantify marketing department.
Starting early can help you avoid team buy-in issues because they won’t have a chance to develop the bad habit of advertising without lead source attribution.
Track every funnel stage
Ideally, you want to be able to track lead sources at every stage of your funnel, starting with traffic. Analytics software and a UTM Code system can give you source information for your website, apps, and landing pages.
If your first encounter with prospective customers is a phone call, get your reps in the habit of asking people how they first heard about you. If you’re running a free giveaway, ask people how they heard about you on the entry form.
Once you have source information for the traffic stage of your funnel, keep track through each additional stage that you might have in your funnel. For example:
Marketing Qualified Lead
Sales Qualified Lead
This allows you to know how your conversion ratios and how much you are spending to get someone to each stage in your funnel.
The best way to keep track of all of this information is to make sure it gets registered and communicated between the different software services you might use. For example, make sure your analytics software can read source information in your links and communicate that to your marketing automation and CRM software services.
(If you’d like a technical case study of how I do this with UTM Codes + Mixpanel + Infusiosoft/HubSpot/SalesForce, click here.)
Not an exact science
To the chagrin of sales professionals and executives everywhere, most things in marketing are not an exact science. Lead source attribution is simply an attempt to quantify the art as best we can. That being said, here are a few pitfalls you may run into:
There’s almost always more than one source
Humans are complex psychological individuals that need to warm up before they buy something. Depending on how long your typical sales cycle is, your customers might need five, seven, ten or more encounters with your brand before they buy.
For example, think about the last time you went to see a movie. How did you hear about it? Did you hear an interview with the star on the radio? Did you see a trailer before another movie? Did you see a commercial…or two…or more? Did your friend see it and recommend it to you?
All of this can drive a marketer mad; but fear not, this is how to make sense of it: If you don’t have the resources to track every single source, at least attempt to track the first and the last.
We can reasonably assume that the first source is the one that put you on their radar, and the last is the one that prompted them to buy. Both are very important.
Human input can skew your data
Whenever possible, make sure your lead sources are set automatically with software. That cuts down on human error.
Lock down your first touch attribution field in your CRM so that it doesn’t change once it’s set.
People have a hard time remembering how they heard about you
Only resort to asking people how they heard about you if it’s your only option. People seem to have a hard time remembering, especially if they were influenced by multiple sources.
For example, when running offline ads such as radio, television, or mailers, don’t send people to YourMainWebsite.com and ask how they heard about you. Instead, send them to a URL like RadioShowListenerSpecial.com, which simply redirects to YourMainWebsite.com with the appropriate lead source attributes appended to the URL.
Take the time now
Instead of spending your next marketing dollar or hour on advertising, invest some time and money to setting up a robust lead source attribution system. It will pay for itself many times over.
Brian Lee is Founder of Relevant Content Marketing which provides Marketing Education and Consulting to Entrepreneurs. Learn more at RelevantContent.Marketing.